No business owner or manager wants to cut employee hours. And certainly none of them want to cut headcount. But the reality in the food and beverage industry right now makes at least one of those unavoidable.
If you find yourself in the unenviable position of having to decrease hours and/or staff to make payroll or stay operational, there are some things you can do to mitigate the negative effects on your employees or ex-employees.
Those things fall roughly into two camps:
- Providing as many useful and relevant resources as possible to weather the loss of income
- Helping position laid off workers for a triumphant return to the industry once the dust has settled
Helping staff out in these areas may not seem like much, but it will lift a big emotional burden off their shoulders during a time when their mental bandwidth is in short supply. Anything you can do to make their lives easier, you should.
So let’s take a deeper look at how to make sure that if your business downsizes or restructures, you execute it as thoughtfully, empathetically, and considerately as possible.
Help Staff Handle Lost Income
The most immediately felt effect from the loss of earning power is the missing earnings. This will unsurprisingly be the biggest stressor for an employee with few hours or who has recently been laid off. Helping them understand their options for assistance and relief—and how they can apply for it all—will decrease some of the heavy cognitive load they’re dealing with as individuals with insufficient income during a global health crisis.
Those options include unemployment benefits, food stamps, payment deferral, health care continuation, and worker assistance relief funds.
Unemployment policy and benefits, while joint state-federal programs, are conceived of and executed at the state level. That means their eligibility requirements and payouts vary by state. But there are five important things they have in common worth mentioning here. And worth mentioning to your employee.
- Anyone claiming unemployment insurance benefits will need to be able to prove they had sufficient past earnings or time worked during an established base period and an immigration status that allows legal employment.
- If the work outage is temporary and the laid off employee plans to return to the same employer, the usual requirements for unemployment are not met. This applies to a lot of the bar and restaurant workers in the country right now. Which means, in some cases, it’s better to go on record as having laid off your employees permanently so they can collect unemployment. If, down the line, your paths cross again and you’re able to offer them a job, great. But before you make any decisions about the future of other human beings, please do the research and verify the eligibility requirements for your state.
- If you, as the employer, are on written record confirming you will not contest the unemployment and that the unemployment claim is reasonable and valid, that goes a long way toward helping the applicant receive assistance—and quickly.
- The sooner your ex-employee applies for unemployment, the better. This is true for every state, so stress that to them.
- At present, many state’s unemployment programs have a coronavirus-based expedition policy. If you can prove that the loss of income is due to the current pandemic, often some waiting periods are waived. These types of policies will only become more common as the pandemic progresses, so be sure to see if your state has one.
You can search through the unemployment benefits for each state here.
The Supplemental Nutrition Assistance Program (SNAP) is a federally-funded program that provides food assistance. While it’s administered by the states, it’s conceived of and executed as a federal program. That means there is only one set of eligibility requirements.
Depending on household size, an applicant’s gross monthly income must not exceed the national poverty level by 130% and their net monthly income must not exceed the national poverty level by 100%.
There are work requirements for SNAP, though. And they include registering for work, not voluntarily quitting a job or reducing hours, taking a job if offered, and participating in available employment or training programs assigned by the state.
If your recently laid off employee fits the bill and could benefit from SNAP’s food assistance, have them apply through their state’s SNAP website.
Tell your ex-employee that many of their bills can be deferred, including rent, utilities, and credit cards. It’s obviously not a guarantee, but it’s a relatively common occurrence and worth a try.
Tell them to check their lease to see what their eviction terms are. If they feel they’re not going to be able to make rent, tell them to contact one of the many free legal aid services for tenants in their city. It’s important they do this before telling their landlord they won’t be able to pay rent. The lawyers will review the lease with a trained eye and point out what steps and actions can be taken to avoid being evicted. While that may not be payment deferral by name, it could be something that’s effectively the same.
Utilities & Credit Cards
This applies to virtually any bill someone has, but we say utilities and credit cards because those are the most common. If they’re going to default on any payments, contact the utility companies or creditors right away and ask about sending hardship letters. Even if a hardship letter isn’t required, almost all lenders and utilities have some hardship concessions in place. That could mean making interest-only payments, putting them in touch with a credit union for loan help, or any other bespoke solution that involves lower rates, lower payments, or reduced penalties and fees for a given time.
The important part here is that your employee understands that, even though they owe money, they actually have some leverage with these companies, especially creditors. If a creditor can’t get them to pay a dime on their debt because of aggressive policies, the debt is worth nothing to them. It makes better business sense for them to give debtors a chance to pay back debts under favorable terms and recoup some of that money.
Sadly, this doesn’t apply to as many people as it should in the industry, but it’s worth bringing up. If your business offers employer-sponsored healthcare, see what you can do to extend it for 30, 60, or 90 days after termination. If you don’t offer health care or aren’t able or willing to extend it post-termination, then provide your recently-released employee with information about opting into the Affordable Care Act at HealthCare.gov.
Worker Assistance Relief Funds
City-, country-, and state-level organizations offer hardship loans and grants to individuals experiencing economic distress. Some of those are for hourly workers only. Some are for hospitality workers only. The key is to encourage your ex-employee to look into the options available.
We have a useful list of bar and restaurant relief funds here, though many of them are federal or based in larger cities. We can’t stress this enough: there are many, many local options out there. If your former staff member is made aware of the possibility to receive some aid, that may be enough to get them to apply.
Alternatively, many of the relief funds from the link above accept referrals. If you know of someone in need of assistance and you’d like to anonymously apply on their behalf, it can be done.
Position Your Former Staff for Future Employment
This economic downturn and the negative effects on the hospitality industry will not last forever. Not only will preparing for future employment help your ex-employees hit the ground running once business-as-usual resumes, but it’ll keep their sense of self-worth up as they navigate the emotional landscape of unemployment.
Help Them Network
As a bar or restaurant owner or manager, you’re likely plugged into a professional network of your peers. While they’re probably in the same boat as you when it comes to reduced hours and headcount, some may not be. Regardless, spreading the word about the employees you believe in will help them and help you. Be their advocate. If you can match-make other businesses with staff, both parties will owe you one.
Also, you may have employed some staff members that, while they were stellar employees and added a lot of value, would add a lot more value somewhere else. Imagine a bartender who went and got their Introductory Sommelier Certification. Both your friend who owns a wine bar and your ex-bartender-cum-sommelier will appreciate you putting them in touch with each other when bars and restaurants are hiring again.
References and Letters of Recommendation
In line with the networking point above, tell your ex-employee you’ll provide any and all reference and recommendation letters they ask for. They spent a lot of time building their professional skill set in the service of your business, and a letter of reference that confirms that is invaluable.
Continuing Education Opportunities
Your ex-staffer is likely going to have a lot of free time coming up, so engineer a career plan with them if you haven’t already. If they’re a barback that wants to become a bartender, put together a list of sites that cover how to become a bartender. If they’re a server that wants to become a sommelier, put together some resources for them to start learning online and understand what to expect on the somm exams.
Showing them that you believe in them—that there is a light at the end of the tunnel—can keep them from feeling helpless. They’ll start to feel that their future still exists even if the present is a little disrupted. And they’ll be ready to jump back into the workforce the second an opportunity comes calling. And, hopefully, with their ongoing education and your networking and referrals, it will be the perfect opportunity.
Do What You Can
Can’t do everything listed here? That’s fine. As a member of the hospitality industry, things are not all smiles for you, either. Just be upfront and genuine and do what you can for the people whose lives are being upended. Nobody can ask you for anything more than that.
Remember that many bar and restaurant staff live paycheck-to-paycheck. Losing their income isn’t just an inconvenience, it can seem like an existential threat. If you have to let someone go, give them all the resources and options they need to stay afloat and maintain hope. Try to guide them with a thoughtful hand toward what will undoubtedly be a bright future. Because it’s always darkest before the dawn.
If you or anyone you know is in need, please check out and share our list of the ways customers can support hospitality businesses during the crisis and these ideas to replace lost staff wages. Both of which can be found in our coronavirus resource and information hub for bars and restaurants.