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Most Restaurants Are Relying on Unemployment Insurance to Protect Staff

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Amid mass closures, smaller restaurant groups say their best option is to lay off staff until they can reopen — but some say the state’s resources are currently dysfunctional

A view of the Manhattan skyline
The Manhattan skyline
Jean Schwarzwalder/Eater

Gov. Andrew Cuomo on Monday shut down the state’s bar and restaurant community for everything but takeout and delivery, and the policy, designed to mitigate the spread of the novel coronavirus, has also put some 321,000 food and beverage jobs in New York City alone at risk. Most of these workers will lose their primary source of income for the foreseeable future, and possibly their employer-sponsored health care as well.

Though some bigger restaurant groups, such as Union Square Hospitality Group, have delineated specific contingency plans for newly unemployed staffers, the majority of the city’s restaurants took the only tack they felt was available to them: terminating staff — sometimes by mass email, as was the case at Tom Colicchio’s empire — and encouraging those workers to apply for state unemployment insurance as a stopgap until they can be rehired.

“We had to just close and get rid of everyone,” said Alex Raij, who runs one of the city’s most prominent collections of Spanish restaurants with her husband, Eder Montero. “I don’t want to compensate people a little bit and then have them be ineligible for benefits,” like unemployment, she said.

Delivery and takeout didn’t seem to be in the cards for their restaurants, which include neighborhood spots like the Basque Txikito and La Vara in Cobble Hill, she added. Across the four venues, she laid off around 65 employees total, whom she’s hoping to rehire when the shutdown ends.

Even those who have pivoted to delivery and takeout needed to slim down staff. Major Food Group added delivery at Carbone, but in a statement, said it had to layoff and furlough many employees. The Queensboro in Jackson Heights, which also has a delivery program, told Eater it would see 90 percent of its remaining shifts disappear in the coming weeks.

Pitmaster Bill Durney is test driving delivery for the first time at Hometown Bar-B-Que and Red Hook Tavern, an initiative that should allow him to keep paying a “skeleton crew” of five or six employees at each venue, drawn from both salaried and hourly staffers. He’s still laying off around 24 employees and will continue paying health care costs for anyone with that benefit.

Some businesses already primed for delivery have had better luck with keeping on employees, though. Ashwin Deshmukh, a partner at both Williamsburg Pizza chain and cocktail bar Short Stories, hasn’t laid anybody off yet. The pizza delivery business isn’t suffering, and though he hopes he can keep on bartenders at Short Stories in light of a new booze delivery allowance, he can also transition them to Williamsburg Pizza. “We haven’t given notice,” Deshmukh said. “We’re telling people to hold tight,” he added.

Still, if he must shift bartenders to the pizza chain, the jobs wouldn’t pay as well. And ultimately, no amount of promises from business owners will be enough to cushion blows to thousands of workers.

Besides the restaurant industry, workers in commercial gyms, events, theaters, and other industries have been laid off as the mandate forces closures across the state. The labor department waived the seven day waiting period to apply for benefits, but since the start of the COVID-19 spread, there have been confirmed reports of slowdowns on the agency’s website, likely due to the number of people filing claims. New York Times critic Pete Wells cited on Twitter the case of a bartender who said the site crashed on him six times as he tried to file.”

And even when the site does work, it’s quite possible that unemployment insurance won’t be enough for many. That benefit is capped at $504 per week in New York, or just over $2,000 per month. Many in the hospitality industry will collect much less.

According to the state Department of Labor’s benefit calculator, an individual earning $39,710 every year — the average for a city waiter — would earn $381 per week while on unemployment, or about half their regular wage. A cook with an average annual wage of $32,990 would earn just $317 per week on unemployment, which works out to under $1,270 per month. For comparison: The median rent for a Manhattan studio last summer, according to one report, was $2,700/month.

Undocumented residents, who make up a vital portion of the hospitality industry, are not eligible for unemployment insurance. Mayor Bill de Blasio said in a press conference this afternoon that a lot of undocumented New Yorkers have already lost work and that “a lot more will.”

“Some of us can work things out with capital partners...but our people need to eat,” Deshmukh said, arguing that workers need to take priority in government support. Officials need to “pump money into the balance sheets of those with less than $300 in savings, the people who need it the most,” Deshmukh adds. “If they were able to do it for banks, they should be able to do it for tipped workers.”

De Blasio and Cuomo have said that they’re unable to help more without the assistance of the federal government. The Trump administration has expressed support toward sending cash directly to Americans as part of a $1 trillion stimulus package, though it’s not finalized yet. “Americans need cash now,” Treasury Secretary Steve Mnuchin said during a White House news conference this afternoon.

Still, such efforts are only a Band-Aid for a larger structural problem. “If you’re a hospitality worker in the city, it’s going to be really tough for you for the next 12 months,” said Deshmukh.

Williamsburg Pizza

1617 2nd Avenue, Manhattan, NY 10028 (212) 457-3114 Visit Website

Hometown Bar-B-Que

454 Van Brunt Street, Brooklyn, NY 11231 (347) 294-4644 Visit Website

Txikito

240 9th Ave, New York, NY 10001 (212) 242-4730 Visit Website

Short Stories

355 Bowery, Manhattan, NY 10003 Visit Website

La Vara

268 Clinton Street, Brooklyn, NY 11201 (718) 422-0065 Visit Website

The Queensboro

80-02 Northern Boulevard, Queens, NY 11372 (929) 296-0038 Visit Website

Carbone

49 Collins Avenue, , FL 33139 Visit Website

Red Hook Tavern

329 Van Brunt Street, Brooklyn, NY 11231 (917) 966-6094 Visit Website

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