Restaurant owners and operators are firming up their plans on how to cope with a higher minimum wage. The VP for the Western Canada region of Restaurants Canada, Mark von Schellwitz told an audience, just over three quarters or 78 per cent of operators will cut hours of staff, while nearly half of them, 49 per cent are, or will go through a round of layoffs.
“If you are an owner-operator you’re going to have to work those seven days a week and cover shifts that normally you’d have a staff member cover but you’ve got to remember, we’re an extremely labour intensive business where 35% of every revenue dollar goes to labour, and in order to stay viable our guys are just saying, look I just we’re going to have to work more hours to try and keep our labour costs aligned,” he later said in a phone interview.
“We’d lost a number of food service businesses over the last year and in the first nine months since the last minimum wage increase, from October to July, we were down several thousand employees already. That doesn’t count how many people are getting reduced hours. Their take-home pay is actually less and not more with the minimum wage increases.”
Alberta’s minimum wage went up by one dollar to $12.20 an hour, and $1.50 for liquor servers, with the elimination of the liquor server wage. When you factor in tips, liquor servers typically earn more than $30 an hour (according to University of Guelph research) — which means a much greater loss in income when hours are cut, Restaurants Canada said in a release.
Alberta members recently participated in a work shop in Calgary von Schellwitz said, to find ways to reduce labour costs. “There were presentations on various Earl’s.67 sort of mandatory service charge model. A potential service charge model that still has gratuities involved. And a number of self service options that pubs are looking at that have these beer and wine dispensing machines to cut out the service, trying to put a lid on those labour costs.”
They also looked at balancing what they pay between higher-paid front-of-house service staff and back-of-house kitchen staff who don’t earn gratuities through new service charge or self-service options.
A recent story by Global News showed an operator looking at a self serve model to reduce staff by 50 per cent. The MLA for Lethbridge East, Maria Fitzpatrick, called the possibility of removing servers “selfish.”
“If action isn’t taken, rather than losing a few jobs, or a few job hours, your entire staff loses their job and the minimum wage for those people who’ve lost their job is zero. So you can’t begrudge operators looking at ways and how they can stay viable,” von Schellwitz said in response to that.
Von Schellwitz addressed the Alberta Liquor Industry Conference going on at the Airport Renaissance Hotel.