Chris Nickels Shares Perspective in Nation’s Restaurant News Article About Legal Protections for Employees in Restaurant Industry
Quarles & Brady partner Chris Nickels, a Milwaukee-based member of the Labor & Employment Practice Group, gave his perspective about the various legal protections for employees in or around the restaurant industry in a Nation’s Restaurant News article.
With elections coming up, many states will be voting on worker protection proposals that could introduce drastic changes if passed. One of these proposals is Initiative 82 in Washington, D.C., which would ban the subminimum tipped wage for all tipped workers performing service work, including restaurant servers. A federal proposal has to do with re-interpreting the definition of who is considered a full-time employee, part-time employee, or contractor under the Fair Labor Standards Act. These proposals could have a ripple effect on the industry and cause increased labor cost to occur as a result.
“It’s going to drive up labor costs, because currently the federal minimum wage for a tipped employee is $2.13,” Nickels said. “[…] That’s going to increase the cost of doing business for the restaurant owners, though I don’t know if you’ll be able to break the public’s habit of tipping. We could see even higher costs being passed onto the consumers because the restaurant owners have to bear the brunt of these increased labor costs.”
So if eventually, gig workers are reclassified as employees under the Fair Labor Standards Act, how could that affect restaurants? Nickels said it would drive up costs for the delivery platforms, who would then pass the expenses onto the restaurants or the consumer. It is also quite possible that drivers would want to directly work for individual restaurants as delivery drivers, since the flexibility of contract work would be diminished.
“All of this could result in reduced sales for restaurants as delivery platforms would have to drive up their fees,” Nickels said.