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With the nationwide unemployment rate at 3.6 percent, 263,000 new jobs created in April 2019 and a sizzling economy, the labor market is likely to get even tighter.

Restaurant Quest 2019: The Search for the Elusive Employee

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From regulations to unemployment trends, it's not getting any easier.
By Steve Cupp and Jaklyn Wrigley May 2019 Expert Insights

“This is Joe over at Big Eats. I can’t find enough applicants to fill the openings I have at my stores. I even had to close down a store a day last week when I couldn’t find employees for the evening shift. Overtime is killing me; even when I offer overtime hours, employees don’t want to work it. Do you have any suggestions?”

Yes indeed, the labor market is tight. With the nationwide unemployment rate at 3.6 percent, 263,000 new jobs created in April 2019 and a sizzling economy, the labor market is likely to get even tighter. This is especially true for the restaurant and quick-service food industries, which have traditionally relied upon a steady stream of lower-skilled and younger applicants who are eager to enter into the job market. In fact, the National Restaurant Association predicts that jobs in the food service industry will top 15 million in 2019, and lists recruiting and retaining employees among the top challenges for operators. Yet, just 19 percent of 15- to 17-year-olds and 58 percent of 18- to 21-year-olds had jobs in 2018, according to a Pew Research Center study published in November 2018. This is significantly down from years past. The cause of this trend is difficult to identify. Whether parents are not pushing their kids to enter the workforce or there are too many other extracurricular activities, one thing is certain: younger workers are not as eager to pick up a part-time job, even at the local eatery that is begging for help.

Federal laws can also deter employers from hiring anyone under 18. Under the federal Fair Labor Standards Act, there are regulations that preclude employees who are 16-17 from performing certain job duties, such as operating power-driven machines like mixers and meat processors and delivering food via automobile. Another layer of federal regulations applies to 14- and 15-year-olds, which restricts significantly the number of hours that can be worked during a day and workweek, particularly during the school year. If you don’t believe us, check out “Fact Sheet #2A: Child Labor Rules for Employing Youth in Restaurants and Quick-Service Establishments Under the Fair Labor Standards Act” on the Department of Labor’s website.

State laws also serve as a deterrent to employing minors, and these laws can vary greatly from state to state. We work primarily in Louisiana and Mississippi. The Louisiana Workforce Commission implemented additional rules and regulations for employing minors over and above federal law, such as requiring that all minors (defined as under 18 years of age) have a 30-minute uninterrupted work break every five hours of employment. A failure to comply with this requirement will subject the employer to a significant fine. And that is just one example of the additional requirements under Louisiana law. If you cross the state line to work in Mississippi, employers generally only have to comply with the federal regulations.

So, what can Joe at Big Eats do to increase applicant flow and hire more employees at his stores? One idea is to increase his starting wage and increase benefits, which he did not want to hear. The fact is that many competitors for this segment of the workforce, like several of the big box retailers, have increased their starting wages well above minimum wage in order to attract applicants. A quick Google search offers other examples of how employers are creatively trying to solve this workforce problem. Utilizing mobile apps that allow employees to swap shifts at the last minute when conflicts arise, allowing employees to express their opinions on branding of the products being sold, handing out recruiting cards to customers who visit the establishment, offering bonuses to employees who recruit other employees to join the company, and teaming up with AARP to recruit and hire older workers are all innovative solutions to the labor shortage. It is clear that creative thinking gives employers a distinct advantage.

As another example, we look at the Louisiana Restaurant Association’s Educational Foundation (LRAEF), which is tackling the workforce issue head on. The LRAEF is a major supporter of the nationwide ProStart program, a two-year program for high school students where they learn culinary techniques and management skills specifically tailored to the food service industry. Today, there are 56 Louisiana high schools and almost 2,000 Louisiana high school juniors and seniors participating in the program. According to Wendy Waren, vice president of communications for the LRA, “The LRAEF provides school support grants to purchase ingredients for labs, purchase testing materials, and fund field trips. The high school students also participate in the Raising Cane’s ProStart Invitational, held yearly at the New Orleans Convention Center, and that event provides the students with a chance to show their skills and compete for $1.2 million in scholarships. ProStart is a comprehensive program and it is a great way to get our young people interested in the food service industry. We hope they will discover that there are exciting and fulfilling career opportunities in the industry. While employing teens may present challenges, hiring ProStart students will make the challenge worth it given their advanced training.”

So, our advice to Joe at Big Eats? In addition to suggesting that he may want to look at raising his starting wage and offering additional benefits, he will have to get creative in his search for more applicants and good employees. Yes, the labor market is tight. But, by partnering with a local restaurant association, using technology and social media, and just generally letting the creative juices flow, even Joe will be able to find and retain the elusive employees that he so desperately needs.

Steve Cupp, a partner in the Fisher Phillips Gulfport office, has devoted his practice to representing management interests in various areas of labor and employment law, with experience across a range of industries, including manufacturing, financial services, construction and retail.

As of counsel in the Fisher Phillips Gulfport office, Jaklyn Wrigley has extensive experience with the alphabet soup of federal labor and employment laws and litigation involving immigration issues, wrongful termination and breached employment agreements.