With minimum wages on the rise and new overtime legislation soon going into effect, restaurants are searching for ways to pay more—and still make a profit.
By Mary Avant
QSR Magazine, August 2016
... While minimum wage battles continue to rage at the state level, the federal government is also getting involved in the conversation over compensation, extending overtime pay to anyone making less than $47,476 annually (or $913 weekly). The law will go into effect December 1, and the Department of Labor says more than 4 million workers will be affected by the legislation within its first year of implementation. ...
Though it may seem doom and gloom, there are some in foodservice who plan to make wages and overtime pay work for the employees and their bottom line.
Burrito brand Boloco is one of those concepts dedicated to offering “livable wages” to its more than 300 employees in 16 locations across the U.S. The brand first raised its minimum wage to $8 in 2002, when the national minimum wage was between $5.25 and $6. CEO John Pepper says it was at the time the most profitable year for the brand.
The entry-level wage now sits at $11 an hour, with the average employee making $13.75 an hour. But, despite the fact that the brand’s core values necessitate above-average wages, Pepper acknowledges that higher pay often equates to lower profit—a sacrifice the brand is willing to make. ...
&pizza—a Washington, D.C.–based fast-casual pizza concept with 15 shops in Virginia and Maryland—not only offers a healthy living wage, but also encourages its “tribe members” to work more hours. This allows employees to take advantage of the many benefits &pizza offers, including health insurance, subsidized childcare, bridge loans for those in need, and—perhaps most uniquely—a subsidy for employees who want to get a tattoo of the brand’s logo. “We’re happy to give people the benefits they need and the benefits they deserve,” says cofounder, CEO, and president Michael Lastoria. “The more comfortable and safe our tribe members feel, the more committed and connected they become to the company.”
The entry wage for &pizza employees in D.C. is $11.75, and the brand is $2 above minimum wage in both Virginia and Maryland. ...
Whatever approaches they decide to experiment with, brands are quickly being forced to re-examine the ways in which they can protect profit margins with higher minimum wages and other labor legislation on the horizon.
“This is just one change, and it’s coming,” Lastoria says. “Whether it’s tomorrow or five years from now or 10 years from now, we all know there’s going to be a paradigm shift, so prepare yourself for it and innovate through it.”
Copyright 2016 Journalistic Inc.