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The restaurant you used to work for received a PPP loan and wants you back — now what?
As every city and state wrestles independently with its response to the COVID-19 pandemic and how to safely reopen society and the economy, restaurants and bars are at the bleeding edge of the conversation — as are the employees who must navigate whether or not they will return to work.
Millions of restaurant workers have been laid off, furloughed, or otherwise unemployed since the onset of COVID-19, and their return to work is complicated by the Paycheck Protection Program loans that have been disbursed over the past month. The PPP was enacted into law at the beginning of April and some, though not enough, restaurants and bars received funds equivalent to two-and-a-half times their monthly payroll. A key portion of the program, as it is currently written, is that the loans issued will be forgivable to employers if they rehire staff to pre-pandemic levels by the end of June. This has left restaurant owners scrambling to call their staff back to work, often despite stay-at-home orders that remain firmly in place.
As the owner of Hunt + Alpine in Portland, Maine, I’ve worked hard to communicate with our staff of 12 front- and back-of-house employees to keep them informed on how the pandemic impacts personal safety, the business’s finances, and, particularly, how it affects their lives. At Hunt + Alpine, we have always sought to put our staff’s well-being — physical, emotional, and financial — at the forefront of our business model, and in Maine we are lucky that so many other small businesses treat their staff with similar levels of respect and professionalism. Understanding the details, nuances, and shortcomings of the PPP has become a full-time job for me as we plan the future of our business and work to continually prepare our staff for what the future of the industry holds.
Because of the confusing and rushed nature of the way the PPP was written, the ever-changing public health situation, and the constant updates from Washington, DC, our state capital, and City Hall, I have been fielding questions from restaurant and bar employees around the country about how the PPP will affect them, their place of employment, and their positions. Every bar and restaurant is different. Each employer will take a different approach in responding to the havoc that COVID-19 has wreaked on our industry. Some will put their employees’ well-being first; others will not. Some are working right now on how to better structure their businesses to suit the new economic realities that we are facing; some are not.
Hospitality employees need to ask their employers direct questions. Employees are in a rare position of power when it comes to being re-hired; the PPP is structured as a loan and will only be fully forgiven if employers rehire their staff, or the equivalent positions, back. As a trained, and presumably valuable employee, you are worth more to your employer than a new hire who will need training.
Here are some — but certainly not all — of the questions employees should ask before deciding whether to come back to work. And employers, be prepared to answer these questions clearly and honestly.
How are you calculating my return pay?
To see their loans fully forgiven under the PPP, employers must rehire their staff, or the equivalent positions, with pay being equal or no less than a 25 percent pay cut from their pre-pandemic pay by the end of June. (Businesses must also use 75 percent of their loans on payroll to have the loan fully forgiven.) For many employees, figuring out pre-pandemic pay is straightforward, but for tipped employees this becomes more complicated. Exactly how that pay is calculated is, to some extent, up to the employer. Will you be paid your average hourly wage from January 2020 to early March 2020? Or will you be paid an average of what your team was making in April/May 2019? In a seasonal market like Maine, that difference can mean several hundred dollars per week. In other cities, where residents flee to Maine and elsewhere during the summer, that difference goes the other way.
How many hours per week will you be paid for and how does that compare to what you were working before closure or would be working right now? Were you being paid benefits before and will your benefits be matched during this period? To be clear, the PPP loan amount is based on not just take-home pay, but benefit contributions made by your employer between January 2020 and March 2020.
What are my responsibilities upon being rehired?
Many restaurants are currently operating at 50 percent capacity or less. If you are being rehired, what exactly, if anything, are you being asked to do? Under the PPP, your employer is supposed to replace the positions lost; if you’re asked to take on responsibilities that are wildly afield of what you were previously doing (for example cleaning your employer’s house when before you were a server), that is clearly unacceptable.
How will you keep me, the space, and our customers safe?
Employers hold economic power over their staff; asking them to sacrifice their safety and security for their financial wellbeing is both abusive and wrong. Safety should be the first priority for every restaurant, and should have been since well-before COVID-19, but this pandemic has created new realities and new challenges. Ask your employer how they are addressing those challenges and make sure you are comfortable with the answers. If you’re uncomfortable, push for change, address the issue with a healthcare provider, and/or work with your fellow employees to create a safer space.
What happens if I don’t accept the job you are offering me now?
The PPP is far from a perfect program and when paired with a temporary increase in unemployment insurance benefits through the Pandemic Unemployment Assistance, some people in low-paid positions may be making more through unemployment benefits than in their previous jobs. However, in some states, by not accepting the job offer you could risk losing UI. Employers know these wrinkles and should be prepared to answer that question in a way that makes their staff comfortable. There are lots of paths forward here which will work for the individual and the employer, but any potentially re-hired employee must understand their options and ask the question.
Will I have a job after the eight weeks of PPP money runs out?
The PPP provides employers eight weeks of pay for their staff. What happens to you as an individual after the eighth week is a very important question that needs to be asked now. There is going to be a level of uncertainty in every answer, but you should be comfortable with the answer that your employer gives you.
How has your business model changed because of the coronavirus?
How has the restaurant you worked at changed its operation? Has your employer adjusted their business model to be serving meals to the hungry or frontline workers? That’s awesome! Understand how you fit in to the new model and if you’re being paid from the PPP, money raised outside of the PPP, or both.
Most employers are not just looking at how to reopen, but how to restructure their businesses in a way that makes sense for the new realities of social distancing, reduced capacity, and uncertainty for the coming months and years. The changes they are implementing and planning now will affect your place of employment for years to come. Not only should your employer be making their new systems and standards safe for you and their customers, but they should be addressing how to make their business more durable to future crises. Will they be working to increase your team’s pay? Will they be expanding benefits offered?
Ask the questions now and make sure you are comfortable with the answers.
Andrew Volk is the owner of Hunt + Alpine in Portland, Maine.
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