U.S. government efforts to support people who have lost their jobs has had the unintended consequence of keeping some restaurant workers away. Under March’s federal stimulus act, people eligible to get state unemployment assistance get an extra $600 a week funded by the federal government through the end of July.

The median pay for food preparation workers was $11.92 an hour in 2019, according to the U.S. Bureau of Labor Statistics, or $476.80 for a 40-hour week.

Steve Joyce, chief executive officer of Applebee’s-owner Dine Brands Global Inc., said the extra federal assistance “creates in a lot of markets a relatively high reimbursement rate for a limited amount of time.”

This is why some restaurants are resorting to financial incentives to get workers back. Shake Shack, for instance, is offering an extra 10% in pay as a “thank you” to new hires, according to job postings in Texas and Seattle. Some Dunkin’ franchisees are using bonuses and free meals to keep staff on the payroll, while the parent company weighs a new-hire ad campaign.

Not every company is having such a hard time finding workers. Papa John’s International Inc. has brought on thousands in the last six weeks amid a broad hiring effort, which CEO Rob Lynch said is intended to get locations “appropriately staffed” to handle higher demand.

“I think people want to work now even more so than they did even four to five weeks ago,” he said. “We’ve been hiring like crazy and we’re going to continue to do so.”

Extra Staff
In fact, companies may need to hire even more workers than they had before the pandemic, to deal with extra cleaning measures, said Peter Saleh, a restaurant analyst at BTIG. “They’re probably going to want to over-staff in this environment and be prepared.”

These type of “labor inefficiencies” have been flagged by restaurants planning their reopening strategies. And refilling the same position can introduce new costs, particularly if restaurants have to hire inexperienced workers.

“If you can’t bring back people you know, you have to go through training,” said Salsarita’s CEO Phil Friedman.

Salsarita’s has had to delay reopenings in certain locations, including South Carolina, because it can’t find enough people. Hourly staff particularly are reluctant to return because many have found new jobs or are nervous about working, and it could take weeks to fill out the ranks, Friedman said.