WA S H I N GTO N
August 2016
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STRATEGIES
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New Federal Labor Laws You Need to Understand
FOR KEEPING
WASHINGTON’S Minimum Wage
YOUR TOP TALENT
INITIATIVE
Washington Restaurant Association 510 Plum Street SE, Suite 200 Olympia, WA 98501-1587
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Inside
www.warestaurant.org
Features
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16
11
Survey Shows Scheduling Laws Not a Priority for Seattle’s Satisfied Restaurant Workers
12
The Key to Employee Retention in a Tight Labor Market: Training and Treating People Well
16
No Longer HR Business as Usual
20
Transitioning to Transgendered Employees and Guests
22
Simple Ways to Improve Draught Beer Quality and Profitability
24
What Happens When Hotel Perks are No Longer Special?
Restaurant A
In Every Issue
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WA S H I N GTO N
August 2016
& Lodging M
STRATEGIES
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New Federal Labor Laws You Need to Understand
FOR KEEPING
WASHINGTON’S Minimum Wage
YOUR TOP TALENT
INITIATIVE
6
President and CEO: Hospitality: The New Face of Our Workforce, Our Message to Them
7
News Briefs
9
State Government Affairs Update
10
Local Government Affairs Update
26
Calendar/New Members
30
Ask the Expert: Optimize Kitchen Staffing to Drive Profits
On the cover
Workforce issues are always of paramount importance to the hospitality industry. Now, like never before, the old rules are rapidly changing. Washington Restaurant & Lodging Magazine helps you stay on top of what you need to know as you plan for your future workforce needs.
Washington Restaurant Association 510 Plum Street SE, Suite 200 Olympia, WA 98501-1587
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EDITORIAL STAFF Publisher, Anthony Anton Executive Editor, Lex Nepomuceno Editor-in-Chief, Marianne Scholl Art Director, Lisa Ellefson Managing Editor, Paul Schlienz Contributing Editor, Andy Cook Contributing Editor, David Faro Contributing Editor, Stephanie Davenport Contributing Editor, Jillian Henze Research Editor, Sheryl Jackson JOINT EXECUTIVE COMMITTEE WRA Chair, Phil Costello Stop n’ Go Family Drive In WLA Chair, Matt Van Der Peet Westin Bellevue Hotel WRA EXECUTIVE TEAM President and CEO, Anthony Anton Vice President, Teran Petrina Director of Business Development, Ken Wells Director of Communications & Technology, Lex Nepomuceno Director of Education, Lyle Hildahl Director of Government Affairs, Bruce Beckett Director of Internal Operations, Kylie Kincaid Director of Membership, Steven Sweeney
510 Plum St. SE, Ste. 200 Olympia, WA 98501-1587 T 360.956.7279 | F 360.357.9232 www.warestaurant.org │walodging.com Letters are welcomed, but must be signed to be considered for publication. Please include contact information for verification. Reproduction of articles appearing in Washington Restaurant & Lodging Magazine are authorized for personal use only, with credit given to Washington Restaurant & Lodging Magazine and/or the Washington Restaurant Association. Articles written by outside authors do not necessarily reflect the views or positions of the Washington Restaurant Association, Washington Lodging Association, their Boards of Directors, staff or members. Products and services advertised in Washington Restaurant & Lodging Magazine are not necessarily endorsed by the WRA or WLA, and do not necessarily reflect the opinions of the WRA, WLA, their Boards of Directors, staff or members. ADVERTISING INQUIRIES MAY BE DIRECTED TO: Michelle Holmes Allied Relations Manager 206.423.3902 michelleh@warestaurant.org Washington Restaurant & Lodging Magazine is published monthly for WRA and WLA members. We welcome your comments and suggestions. email: news@warestaurant. org, phone: 800.225.7166. Circulation: 6,310.
President and CEO
Hospitality: The New Face of Our Workforce, Our Message to Them By Anthony Anton At my State of the Industry address in June, I announced the birth of a new business model for hospitality businesses. During the presentation I explained how it requires a new, modernized association to help our newborn model grow-up healthy and succeed. This new association must refocus on our workforce and the opportunities we provide - specifically, how we move people upward. Why? There are a couple huge reasons: Millennials will be changing the face of our workforce. The need to talk about and understand Millennials cannot be minimized. They are already the largest part of our country’s workforce, and a third of them are still in school. The difference in thinking, beliefs and expectations of the generation entering the workforce has likely never been greater in contrast to those of a retiring generation. We need to talk to this generation openly and honestly about how this industry can take them from zero to success – because they are not coming-in with that knowledge. And without knowledge (whatever the generation), human nature tends to assume the worst, not the best of situations. It’s up to us to educate Millennials and give them the opportunities that were once given us. Government is changing, and that impacts everyone. Historically, laws have been based on research, analysis, mutual solutions and debated in Congress or legislatures with a large, talented body of professionals providing guidance. We are quickly moving to municipal-level government rule. At this level there are significantly fewer counterbalancing influences ensuring that political power is not concentrated in the hands of individuals or groups. Local entities also often have a lack of funds or time and minimal tenured, experienced policy staff. Instead, many of our decisions are now based on the media’s description of what is happening. This equals an uneducated public waking up and voting on what is popular. As government policy is being created by the media, we must proclaim the importance of the opportunities within our workforce in the public arena and on the street, instead of inside marble rooms. The business model will change in the future. But, behind the labor pains of increased employment costs, a new business model is being born. This is going to result in large-scale changes. Any business student anywhere and every business book will tell you how no transition or company growth can happen without employee support. Without the backing of employees during large scale change businesses fail. If some positions die with the old model (bussers, cashiers, small station servers, etc.) and others are born (food runners, in house tech support, social media leads) we must clearly explain how an employee’s career can move from entry-level to strong, middle-class jobs and beyond. We lift our people up: this is a message we can be proud of; we need to talk about it to a new generation of customers and team members. Underlining all of these reasons for why we must modernize, both your associations and the hospitality industry as a whole, is the theme that is our heart. We invest in people more than any other part of our business and more than any business. And, we are proud that the hospitality industry is a pipeline for employment – from first job to lifelong career. Join me in telling our story.
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LODGING
FULL SERVICE
QUICK SERVICE
Primary Source of Information | News Briefs Persuader Rule Put on Hold A U.S. District Court in Texas issued a nationwide injunction in June that prevents the U.S. Department of Labor from implementing and enforcing recent changes to the persuader rule. Under the old rule, employers were required to disclose any arrangements to persuade employees about their decision on whether or not to unionize if the consultant or attorney directly communicated with employees. If the attorney or consultant did not communicate directly with the employees and only advised the employer about how to legally communicate with employees, then no disclosure was required. The new rule changes this long-standing policy by narrowing the scope of this “advice” exemption so that virtually all interaction between employers and labor lawyers or consultants will be subject to the disclosure requirements. The injunction will be in effect until the district court issues a decision in the case or a higher court overrules the injunction on appeal.
Five Hotel Companies on Fortune’s 100 Best Companies to Work For List Each year Fortune magazine compiles a list of the “100 Best Companies to Work For,” and hotels are well represented on the 2016 list. Consideration for placement on the list includes a survey of random employees that asks about overall job satisfaction, camaraderie and trust of management. Here are the companies: Kimpton Hotels & Restaurants (#20) Benefits cited by Fortune include six weeks of parental leave and backup childcare and elder care. The company has been a leader in providing benefits for same-sex couples and transgender employees.
Court Rejects Swipe Fee Settlement In July, a U.S. Court of Appeals rejected the controversial settlement in “swipe fee” litigation against Visa and MasterCard, ruling the settlement “unreasonable and inadequate.” The National Restaurant Association joined the litigation as a class plaintiff in 2006, and with many co-plaintiffs, the NRA vigorously opposed the initial settlement when it was unveiled in 2012. “The Circuit Court confirmed what we knew all along: the proposed settlement would not have achieved the litigation’s most critical goal – to fundamentally change a broken marketplace in which swipe fees are set,” said Cicely Simpson, the NRA’s executive vice president of policy and government affairs. “The settlement was so restrictive that it could have allowed these companies to dominate the payments ecosystem unchallenged at a time when new technological developments have the potential to change the competitive landscape.”
Hyatt Hotels & Resorts (#47) In hiring decisions over the past 12 months, Hyatt chose to promote an internal candidate more than 47 percent of the time. Hilton Worldwide (#57) Women represent 51 percent of this hotel chain’s U.S. employee population and 52 percent of nonexecutive managers. Four Seasons Hotels & Resorts (#70) Nearly half of all positions are filled through internal promotion. Marriott International (#83) Nearly a third of U.S. employees have been with the company for more than 10 years and 12 percent for more than 20 years. August 2016 │ 7
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S GOVERNMENT Local Affairs Update T Government A T E
AFFAIRS
UPDATE By Stephanie Davenport
Minimum Wage: The Next Chapter The WRA and WLA have led The WRA and WLA have WASHINGTON STATE MINIMUM WAGE IF I-1433 PASSES the charge for a reasonable joined with other state business 2017 $11/hour solution to the minimum associations in opposing I-1433. wage issue in Washington 2018 $11.50/hour state. We’ve advocated for Here are the key provisions 2019 $12/hour raising the minimum wage of I-1433: 2020 $13.50 in the right way through the Raises the minimum wage to legislative process. Now the $13.50 in 2020 and then ties issue is set to go before voters on an initiative that will have the wage to the consumer price index (see chart for increase unintended consequences and could be harmful for first-time schedule). Note two large increases: the first on Jan. 1, 2017 job seekers. when it jumps up $1.53 to $11 per hour; the second is a $1.50 hike in 2020). The wage will be tied to the consumer price Initiative 1433 seeks to increase the state’s minimum wage to index and adjusted annually starting in 2021. $13.50 per hour by 2020. If passed, the first jump from the current $9.47 to $11 an hour will go into effect on Jan. 1, 2017, Does not allow tips to count towards the minimum wage. less than two months after the November election. I-1433 also contains a paid sick leave element. The paid-leave component Establishes a statewide paid sick leave requirement. If I-1433 is the largest mandate out of any state or local municipality passes, starting on Jan. 1, 2018, all employees in Washington that has adopted such a policy. It is three times larger than state must: even what proponents are saying is necessary time off for an Accrue paid sick leave at one hour per 40 hours worked employee. Additionally, many parts of the paid-leave section Be able to use paid sick leave after 90 days of employment are ambiguous and would be left to rulemaking and agency Be able to carry over up to 40 hours of unused paid sick enforcement. leave into the following year In July, I-1433 sponsors submitted more than 360,000 signatures to the Secretary of State’s office to qualify the measure for the November ballot. The number was well above the 325,000 signatures the Secretary of State’s office recommends to account for duplicate or invalid signatures. It will take a minimum of 246,372 valid signatures to be qualified for the November ballot.
The WRA and WLA are holding member webinars in August and September to answer questions about I-1433 and help members prepare for its possible passage in November. Webinar details are below. Additional information is available at www.warestaurant.org. Please contact Stephanie Davenport at StephanieD@warestaurant.org.
WRA/WLA I-1433 MINIMUM WAGE WEBINARS August 29 ▪ September 9 ▪ September 12 September 21 ▪ September 26 Webinars will take place on the above dates at both 10 a.m. and 3 p.m. Members are encouraged to participate and ask questions about what I-1433 may mean for their business. Sign up by emailing kaaren@warestaurant.org.
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L GOVERNMENT Local Affairs Update O Government C A L
AFFAIRS
UPDATE By Jillian Henze
Your Local Government Affairs team is working diligently in cities throughout the state to help shape policy proposals that directly impact hotels and restaurants. Restrictive Scheduling The Seattle City Council is considering legislation that would place mandates on how restaurants schedule their employees. As of press time, a draft ordinance is expected to be introduced at the July 26 Civil Rights, Utilities, Economic Development and Arts Committee meeting, with the committee to vote on a final proposal on September 13. The full council is expected to vote on the ordinance on September 19 or 26. Initiative 124 Initiative 124 seeks to impose a variety of workplace provisions on Seattle hotel employers, and in late June, UNITE HERE Local 8 submitted about 30,000 signatures to King County Elections as the next step in qualifying it for the November ballot. If King County certifies that enough signatures are valid, the initiative will be placed on the Seattle City Council’s agenda within 20 days. Then, the Council will have 45 days to take action: it can pass the initiative into law, reject it, ignore it or submit an alternative. If the Council rejects or ignores I-124, it will automatically be placed before voters in November. If an alternative is submitted, both I-124 and the alternative will be on the ballot. Paid Family Leave in Seattle The Local Government Affairs team participated in a second discussion on legislation in Seattle that would provide paid leave for employees who are new mothers and fathers and employees who take time off to care for a sick family member. A public forum will be held on August 11, and Councilmember Lorena Gonzalez plans to participate in a business owner and operator listening tour this fall. Legislation may be approved in the first quarter of 2017 and would go into effect in January 2018.
Bag Ban Efforts in Tacoma and Ellensburg The Tacoma City Council will likely pass a plastic bag ban on July 12. At press time, the Council had not decided if it would outright ban plastic bags or require retailers to collect a five-cent fee for each paper or plastic bag given to customers. We are working to get foodservice establishments excluded from the law because of health safety concerns. Last spring, the Ellensburg City Council voted to pursue legislation to ban plastic bags and place a five-cent fee on paper bags, with the fees to fund environmental programs. Under the proposal, low-income residents would receive an exemption and implementation would begin one year after the legislation is passed. Approval is expected this summer. “Ban the Box” Laws Coming to Spokane? The Spokane City Council may consider legislation to limit how employers ask job applicants about their criminal background. It would be similar to the “ban the box” policy in Seattle requiring employers to exclude any check boxes on job applications that ask if applicants have a criminal record. Its purpose is to enable potential employees to display their qualifications in the hiring process before being asked about their criminal records. Walla Walla Joins Seattle in Considering Short-Term Rental Regulations In June, the Walla Walla City Council started discussions to regulate short-term rentals to protect the city’s neighborhoods, create equality in lodging taxation and ensure safety in rentals. City staff is studying the effects of vacation rentals on the local real estate market and will report on future licenses and fees, inspection schedules and other regulations at the end of August. The Seattle City Council is expected to vote this month on legislation that would limit short-term rentals to 90 days per property per year unless the property is the renter’s primary residence. The proposal is a response to Seattle’s housing crisis.
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Survey Shows Scheduling Laws Not a Priority for Seattle’s Satisfied Restaurant Workers The majority of the Seattle restaurant workforce is highly satisfied at work and prefers tweaks to existing policies over any major changes that aren’t needed, including scheduling changes, according to a June survey. The survey asked more than 700 Seattle restaurant employees about their hours, salary, scheduling, and likes and dislikes. It was administered by EnviroIssues and led by the Seattle Restaurant Alliance. The results are significant, as the Seattle City Council is working on legislation that would regulate how restaurants schedule employees. “We’re pleased to see data showing the majority of our employees feel valued and believe they have access to the hours, flexibility and schedules they need,” said Rich Fox, operating owner of Poquitos, Rhein Haus and Macleod’s Scottish Pub and president of the Seattle Restaurant Alliance. “That being said, our goal is 100 percent satisfaction We are constantly working to improve the lives of our employees and these results give us specific areas where we can improve. Our work to make those improvements continues with employee-driven focus."
What Employers Can Focus On Access to hours
70% like the hours they work now, 6% want to work less, and 23% want to work more.
Simple and flexible ways for coworkers to add the shifts they want and trade the shifts they don’t.
Maintaining and enhancing benefits
86% are proud
to work in the restaurant industry.
Workers satisfied at work Schedule/Flexibility Advance notice of schedule
3 out of 4 workers
want employers, not government, to design and implement reforms that impact restaurant workers.
77% 69%
Percent of workers rating each item 8, 9, or 10 on a 10 point satisfaction scale.
Restaurant Workers in Seattle A majority of the Seattle restaurant workforce prefer tweaks to a few existing policies over any major changes that aren’t needed.
67%
70%
live in Seattle
have one job
50%
73%
are under 30 years old
have college experience
and other kinds of compensation. Above everything else, workers said access to benefits and higher wages are a top priority.
Keeping employees informed and encouraging input
More than 60% of workers say they give regular feedback but we can do better! Regular two-way input builds trust and better decision-making.
Sharing and training for long-term opportunities
in our industry with those want them.
who
Keeping restaurants a great place to work, find flexibility, and earn a living. August 2016 │ 11
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THE KEY TO
EMPLOYEE
RETENTION TIGHT LABOR MARKET:
IN A
TRAINING
&
TREATING
PEOPLE WELL
By Paul Schlienz
Retaining hospitality industry employees is always a challenge, but never more so than in a tight labor market. With job openings plentiful, employers are finding creative, innovative ways to make sure their best people remain on their payrolls.
Focusing on opportunities is one way Washington hospitality employers encourage their stars to stick around. Seattle-based Ivar’s, for example, puts a high value on providing paths by which its own employees can grow within the company, which has both full and quick service restaurants. “We have a career path,” said Patrick Yearout, director of recruiting and technology at Ivar’s. “If you start at a particular place, we’ll give you a list of things you need to do to get to the next level, so you can see the opportunities ahead and know exactly what you need to grow into those opportunities.” Hotels, too, are making major efforts to develop and retain their employees by providing growth opportunities. “For 360° Hotel Group, it is about creating a compelling value proposition to prospective team members,” said Amaan Kurji, COO of the Lynnwood-based hotel company. “We believe that it is incumbent upon us, as an employer of choice, to not only recognize capacity and talent, but to also provide a framework of mentorship, coaching and exposure that enables and empowers growth and learning.” In order to develop its employees, 360° Hotel Group created a unique in-house program it calls “360U” that involves 12 to 18 months of training. Kurji describes 360U as providing of formalized and structured training with a centrally-located executive and administrative support structure. “The major brands we work with have put considerable time and resources into developing very comprehensive skill-based training programs by role for new team members, so we fully leverage these,” said Kurji. “We also focus on leadership development as part of our succession planning efforts.”
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Kurji, however, cautions that the hospitality industry needs to become more proactive in employee development. “In general, the hospitality sector has been less innovative than it should be,” said Kurji. “This is partly due to the nature of our business such as shift work, weekends, etc. However, we are focused on this by engaging our teams in the things that are important to them such as community involvement, having a voice in the direction of our business as we grow and ensuring a healthy worklife balance.” A Fun Place to Work Holding on to employees, however, goes beyond opportunities for training and advancement within the organization. It also has everything to do with the working environment, the company’s culture and the intangible reward employees experience by contributing to a workplace. “One of the great things about the hospitality industry is that it’s a fun place to work,” said Matthew Cecil, founder of Industry, an online professional network for hospitality workers. “People don’t work in the industry because it’s a place to make a crazy amount, although some people do make the big bucks. People work in the industry because they’re passionate about it.” This is especially true with Millennials and the younger Generation Z, the cohort that is just starting to enter the workforce as teenagers. “The reality about Millennials is that they are more about quality of life than money,” Cecil stated. “If you have a phenomenal company culture and employee experience, that’s going to help you be really successful in attracting and retaining Millennial employees.”
SEASTOCK / Shutterstock.com
Award-winning Dick’s Drive-In, Employee Retention Experts Look to iconic Dick’s Drive-In if you want to see an effective employee retention program in action. This much loved quick-serve institution with seven Seattle-area locations is a family-owned company famous for how it treats its employees. It pays higher than average wages and offers 100 percent employer-paid health insurance and employer-subsidized dental insurance to every employee who works at least 24 hours per week. Employees working 20 hours per week for at least six months are eligible for college and vocational/self-improvement scholarships up to $25,000 over four years. Childcare assistance of between $3,500 and $9,000 per year is also available to employees who work 20 hours per week for at least six months – and who continue to work at least 20 hours per week while receiving this help. If employees don’t use any or all of their available scholarship funds for tuition, they can use it for childcare. And Dick’s is so committed to giving back to the community that it pays its employees to do so at their regular hourly wage for up to four hours per month. For these reasons and much more, the Washingon Restaurant Association was proud to honor Dick’s Drive-In on June 8 with its 2016 Restaurant Neighbor Award. Dick’s owners Jim and Fawn Spady were also recongized as the WRA’s 2016 Quick-Service Restaurant Operator of the Year. “It’s a big responsibility to give people their first job, which is what we often do at Dick’s,” said Jasmine Donovan, the company’s vice president of operations. “Our goal is to create an excellent workforce.” And not only is Dick’s creating an excellent workforce, it is creating one that is loyal. Nearly two-thirds of its employees have been there more than two years, a very high rate in the quick-service world. Dick’s employee benefits and scholarship program also generate passionate customers. The details are proudly listed on its paper bags, and employee successes are routinely celebrated on their Facebook. It’s easy to see why employees stick around. August 2016 │ 13
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Millennials, now the largest portion of the workforce, are very much on the mind of many hospitality industry decision makers. To make this generation feel welcome, employers are revamping everything from their application processes to their in-house training programs.
and engages in open dialogue with its employees.
“We embrace Millennials by involving and listening to them, and finding out what’s important to them,” said Elizabeth Russell, human resources manager at the Alderbrook Resort & Spa located on the scenic Hood Canal in Mason County. “For us, it’s all about culture, and that is especially important for Millennials and younger. Our culture is all about being hospitable, and that means treating guests and employees well. We have approachable managers, we recognize it when you do a good job, and we have a great benefits package.”
“The younger generation sees the tech sector as the place to get rich,” he said. “We in hospitality need to find out how to make our industry sexier. The younger generation needs to know that the hospitality industry has tremendous growth potential.”
Kurji has also spent considerable time thinking about Millennials and Generation Z and what they bring to the workplace.
“At Ivar’s, we’re working on becoming more mobile friendly - we know there are many people who want to apply that way,” said Yearout. “We’re doing online onboarding, and we’re doing a test with a recruiting site that’s heavily used by Millennials. The more we get out into the workplace and talk with employees and find out what they want, that’s the important part because it allows us to better serve their needs.”
“These generations are very different in thinking and approach,” he said. “They want to know the ‘why.’ They need to understand how their work contributes to a greater good. They are also in a hurry and want to achieve bigger things in a shorter period of time. To appeal to these generations, we are in constant change. We are having to re-think how and what channels we use to communicate, how we incentivize and motivate. We have to be prepared to have almost everything we do challenged and open to a new interpretation. We are excited about these changes and spend considerable energy understanding and appealing to these perspectives.” To retain its team members, the 360° Hotel Group covers their basic needs with competitive wage and incentive programs, a comprehensive benefits and paid leave program, and a parental leave benefit that is just now starting to be rolled out. Additionally, the company has a practice that may not be specifically geared toward Millennials, but seems tailor made to their need to be heard and to understand the ‘why’ of the workplace. Twice each year, the company holds town hall sessions at all its properties where the leadership listens to
Kurji also feels the hospitality industry needs to find ways to appeal to Millennials who are more likely to view the tech industry as the surest path to a well-paid career.
Yearout also understands the need to appeal to Millennials. One of the ways Ivar’s is doing this is by embracing the technology that is as natural as breathing to Millennials.
While the hospitality industry still has plenty of work to do, there is good evidence that its efforts to appeal to Millennials, to communicate its very great career potential and to hold on to its valuable employees are working. “I’ve noticed that we’re starting to see the perception that the hospitality industry is not a place to build a career changing,” commented Mike Sotelo, president and CEO of Consolidar, an organization devoted to preparing Hispanics for employment, at a forum at the 2016 Northwest Foodservice Show. “There’s more pride being instilled in being a great chef, being a great operator or being a great manager. There’s a reason for that. And the reason is a simple one. “It always comes down to doing the right thing and treating people well,” said Russell.
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Eight Ways to Keep Your Top Talent Hospitality employees are a hot commodity, which means operations from mom-and-pops to big chains are scrambling to keep top talent. Here are some ways to keep rock stars on staff. Show your employees a future. If people feel they have a future with your company, they’ll stay. If they don’t, they won’t. Advancing from within and investing in employee training are concrete ways to demonstrate a commitment to your employees’ personal success. Invest in your team. Most employees want to do a good job, and they want their efforts to matter. But doing the job right, and moving up the ladder of success, is easier with thoughtful onboarding, training and skill building. Invest in your leadership. They say people usually “quit their manager,” rather than their job. Ensure you have a strong and committed team by helping your managers continue to improve their leadership skills. Have conversations. Younger employees ask “the why” more than older employees. Millennials want understand how their work contributes to a greater good, and give them a forum for sharing their insight. “Stay” interviews and town hall meetings encourage buy in and foster teamwork. Be transparent. Be upfront about expectations and how you evaluate employees, then help employees get to the next level. If you have incentive programs, be clear about what employees can do to improve results. Think beyond the dollar signs. The best retention plans aren’t just about the money: Quality of life, workplace culture, leadership styles and simple perks, like bus passes, parking, occasional meals out or hotel nights, can trump a cushier pay check. Recognize life beyond work. Hospitality employees are accustomed to working outside the typical Monday-through-Friday, nine-to-five workweek and, more often than not, they choose non-traditional schedules to fit with other life priorities. Help them make it all work. Celebrate. Go a little further than the HR adage: “Praise in public, criticize in private.” Whether it’s an individual accomplishment or a team triumph, give credit where credit is due, and do it loudly. (Lodging members: Now is the time to nominate your stars for the lodging Stars of the Industry Awards. www.walodging. org/convention.) -Marianne Scholl
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No Longer HR Business as Usual
The U.S. Department of Labor has been redefining key business and employment relationships. By Marianne Scholl
You don’t need me to tell you that the U.S. Department of Labor has been busy. Over the past year, it has expanded the definition of joint employer so that you could possibly be liable for the labor practices of your subcontractors. It has narrowed the definition of independent contractor to such an extent that you may have more employees than you realize. And in May, it gave employers just six months to adjust to new overtime rules that include doubling the salary threshold for overtime exempt status. As we go to press, employers are speaking out in Washington, D.C., about the cumulative impact of this increased regulatory burden which, along with the cost of the Affordable Care Act, has businesses worried. They were on Capitol Hill to testify on a funding bill that would deny DOL funds for enforcing some of these new rules. Rather than wait for the outcome of that legislation, hospitality employers who aren’t yet up to speed on all recent federal labor law changes would be wise start paying attention. Be Aware of Joint Employer Status In 2015, the National Labor Relations Board expanded the standard for determining whether two businesses are “joint employers.” It announced this expansion in its decision on Browning-Ferris Industries (BFI), stating that the company, as a joint employer, was indeed responsible for the labor practices—and collective bargaining obligations—of Leadpoint, a staffing company that supplied BFI with workers for its recycling services. In a press release, DOL explicitly stated that the decision was a response to the growing use of temporary agencies.
Hotel
Jo int Empl oyers?
Staffing Co.
Prior to the decision, two entities were considered joint employers only if both exercised direct and immediate control over the terms and conditions of employment for a group of employees. Under the new standard, a company may be a joint employer if it exercises even indirect control over working conditions or even if it merely reserves the authority to do so. BFI is appealing the decision in court, and in July a coalition of business organizations, including the American Hotel & Lodging Association, filed an amicus brief in support of the appeal. As of press time, a preliminary injunction had not been issued and the decision was still in effect. In addition to collective bargaining issues, hospitality 16 │ warestaurant.org
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employers should be aware that joint employers share responsibility for meeting all obligations under the Fair Labor Standards Act, including minimum wage and overtime pay requirements. You should also know that DOL’s Wage and Hour Division considers hospitality businesses poster children for joint employment and uses restaurants and hotels to illustrate two types of joint employment: Vertical Joint Employment: Restaurants, DOL notes, may be considered joint employers if they share operations, even if they are set up as different companies. They may be judged joint employers if their operations include shared managers, shared payroll functions, setting of hours and schedules and shared employees.
Restaurant A
Joint Employer s?
Restaurant B
Horizontal Joint Employment: A hotel may be a joint employer with a staffing company, according to DOL, if some of the following are true for a staffing company employee: the hotel is involved in hiring or supervising the employee; the employee works on the hotel premises; the hotel performs payroll or other employer functions for the employee; the hotel sets his or her hours and schedules; or the employee has an ongoing or permanent relationship with the hotel. Consult an employment law specialist if you have business relationships that may lead you to be considered a joint employer. Employee or Independent Contractor? Over the past year, DOL has also intensified its Wage and Hour Division’s “Misclassification Initiative,” which focuses on identifying businesses that incorrectly treat employees as independent contractors. In 2015, it issued a guidance that more narrowly defines “independent contractor,” shifting the definition away from who controls the work to an economic realities test, that looks at whether the worker is economically dependent on the employer or is in business for him or herself. Unfortunately for employers, this new focus is subjective and does not come with practical, objective criteria similar to the old controls test. Yet getting it right is more important than ever. In the hunt for misclassifications, hospitality businesses, especially quick serve restaurants and hotels, have been in DOL’s sights, and mistakes are costly. Employers can be subject to back pay and back taxes, overtime pay, fines and civil penalties, and even unpaid benefits if they would have been provided to the misclassified employee. The DOL says employers should take six factors into account in the economics reality test: • • • • • •
The extent to which the work performed is an integral part of the employer’s business. The worker’s opportunity for profit or loss depending on his or managerial skill. The extent of the relative investments of the employer and the worker. Whether the work performed requires special skills and initiative. The permanency of the relationship. The degree of control exercised or retained by the employer August 2016 │ 17
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d
ed
ve
ce.
This translates, in part, to a number of key questions: • • • • • •
Is the work provided essential to your business operations? (i.e. housekeeping at a hotel or delivery for a take-out pizza place?) Does the individual work elsewhere? Does he or she bring materials (say, cleaning supplies) and use his or her own equipment or do you provided these? Do you set work hours? Do you provide and pay for training? Do you provide and control the methods and techniques used to perform the job?
The length of the job and how the individual is paid are additional factors. An independent contractor, in contrast to an employee, has an established business, provides services to other businesses, has a business license and business insurance, and determines his or her own schedule, among other things. Experts recommend maintaining basic records that support your decision regarding independent contractor status, including business licenses, business cards, contractor tax records, project work plans that specify limited engagements and correspondence.
Under the old rule, employers were required to disclose any arrangements to persuade employees about their decision on whether or not to unionize if the consultant or attorney directly communicated with employees. If the attorney or consultant did not communicate directly with the employees and only advised the employer about how to legally communicate with employees, then no disclosure was required. The new rule requires disclosure of all labor relations related legal counsel even if that counsel has no direct communication with employees. The new regulation, originally scheduled to go into effect on July 1, is being challenged in court. In late June, a U.S. District Court in Texas issued a nationwide injunction preventing the U.S. Department of Labor from implementing and enforcing the rule. The injunction will be in effect until the district court issues a decision in the case or a higher court overrules the injunction on appeal. Do You Have a New Plan for Overtime? The new overtime rule is perhaps the most significant and controversial change introduced this year by DOL. Released in May and scheduled go into effect on December 1, it updates regulations under the FSLA governing overtime exemptions for executive, administrative employees. These updates include: •
Earlier this year, DOL announced it was focusing on quick service restaurants, and misclassification of delivery drivers as independent contractor is among the violations it is targeting. Even under the older control rules, there are numerous cases of hotels running into trouble by considering housekeepers as independent contractors.
• •
An increase in the annual salary threshold to $47,476 or $913 a week. This is up from the current threshold of $23,660 ($455 per week). An increase in the “highly compensated employee” threshold from $100,000 to $134,004. A provision for automatically updating the salary threshold every three years. The threshold is expected to rise to $51,000 at the first adjustment in 2020. The ability to use nondiscretionary bonuses and commissions toward up to 10 percent of the salary threshold.
For all of these reasons, experts recommend using independent contractors sparingly and regularly auditing to make sure relationships haven’t evolved into employment.
•
You should also be careful with general contractors or others who bring employees on to your property for an extended project. You may not only run into joint employer issues as noted above, but Washington’s Department of Labor and Industries could hold you responsible for wages, workers’ comp premiums and fines if your contractor is unlicensed, fails to report those employees and/or pay them minimum wage and applicable overtime. This is further reason to confirm that your independent and general contractors are legal businesses.
Adjusting to the new salary threshold is more than a math problem. How you respond will not only have an impact on your bottom line, it can help or hurt your company’s culture and morale. The new rule also offers the opportunity to review all classifications to reduce the risk of misclassification. Last month’s issue of Washington Restaurant & Lodging included an in-depth article on getting ready for the new rule. Read it online at www. warestaurant.org/blog/getting-ready-for-the-new-federalovertime-rules.
New Persuader Rule, Maybe In March of this year, DOL issued the final draft of a new “persuader rule,” regulating the disclosure requirements related to legal counsel or other expert advice on labor and employee relations issues. The new rule reversed long-standing policy by narrowing the scope of the “advice” exemption, making virtually all interaction between employers and labor lawyers or consultants subject to disclosure requirements.
This article is not intended as legal advice or guidance. Please seek employment law and/or accounting counsel for information on how new and existing federal employment regulations apply to your business.
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Transitioning to Transgendered Employees and Guests By Catharine Morisset, Attorney at Law
Do businesses operating in Washington state have a legal obligation to deal with the issue of transgendered or transitioning employees or guests? The answer is yes. Washington’s Law Against Discrimination (WLAD), Chapter 49.60 RCW, strictly prohibits gender expression or identity discrimination in employment or in public accommodations, including hotels, restaurants, bars and places of entertainment. The WLAD’s definition of “gender expression or identity” encompasses both a transgendered individual’s status, but also protected individuals who are perceived to have this status. And even though “gender identity” is not specifically listed among the statutorily defined protected classes under federal Title VII, the Equal Employment Opportunity Commission (EEOC) takes the position that discrimination against transgendered individuals is discrimination “because of sex,” which is clearly unlawful. As a recent lawsuit the EEOC filed on behalf of a transgender woman against a restaurant chain illustrates, harassment of that employee for her failure to conform with grooming practices stereotypically male, her birth gender, is likely unlawful. Thus, according to the EEOC, an employer’s duty to prevent workplace harassment includes harassment based on an individual’s transgender status or non-conformance to gender stereotypes. The smart business owner will prepare now to meet these legal obligations, rather than take a “wait and see” approach. There are several steps to include in that preparation. Review Current Employee Policies Consider which current workplace policies might affect a transgender applicant or employee, from hiring practices to your dress code and anti-harassment policies. Seek guidance about what to do from your employment law attorneys and consult government regulations. For example, the Washington State Human Rights Commission (WSHRC) states that employers “should permit employees to dress in a manner that is consistent with their gender
identity or expression,” provided it complies with otherwise legitimate dress standards. WSHRC also allows employers to ask transitioning employees to present themselves as a particular gender consistently throughout their transition if they have continuing customer relationships. Be Ready for Paperwork Employers should ask transitioning employees what name they prefer to “go by,” ask what sex-specific pronoun he or she prefers, and use their preferences consistently. This includes ensuring that all non-legal references to the employee’s name and gender (such as email, photo ID, organization charts and directories, business cards and workplace signs) are consistent with the employee’s gender identity and expression. However, company records kept for legal purposes (e.g., tax forms, payroll records, workers’ compensation documents) should reflect the employee’s legal name. In other words, these legal records should not, and must not, be changed unless an employee changes his or her legal name. Educate Employees While employers should respect transitioning employees’ privacy, their transition will ultimately become obvious or the employee may wish to share their transition with co-workers. Co-workers may have misconceptions about the need to transition or appropriate behavior towards transgender co-workers. Just like with sexual or other types of unlawful harassment, however, employers must maintain a non-hostile work environment, establish clear anti-discrimination policies and complaint procedures, and educate all employees about them. As a business owner, you and your employees bear similar responsibilities to ensure equal access for transgendered guests to your establishment as a place of public accommodation. Have a Restroom Plan Courts, federal, state and local agencies, your transitioning employees and even your guests want you to accommodate restroom needs in a non-discriminatory manner. Both federal and state agencies have issued workplace guidelines regarding restroom use by transgender employees. In its Guide to Restroom Access for Transgender Workers, the federal Occupational Safety and
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LEARN MORE
A study recently released by an EEOC Select Task Force on the Study of Harassment in the Workplace recommends that employers create a holistic non-harassment culture that includes a commitment from top leadership, accountability at all levels and new approaches to training, among other elements. Learn how to do just that wra.cc/mag0816a.
Health Administration emphatically states, “All employees, including transgender employees, should have access to restrooms that correspond to their gender identity.” In its 2015 regulations, the WSHRC similarly requires that if an employer maintains gender-specific restrooms, a transitioning employee should be allowed “to use the restroom that is consistent with the individual’s gender identity.” Courts to consider these issues also have dismissed employer concerns that non-transgender workers are uncomfortable about sharing restrooms with transgender individuals. As far as guests are concerned, the WSHRC makes it illegal for business owners to limit public sex-specific bathrooms to individuals with the anatomical parts of one sex. Remember, however, that if you have both gender-specific and gender-neutral restrooms, the WSHRC specifically prohibits businesses from imposing a requirement that any specific individual must use the gender-neutral facility. With the recent failure of Initiative 515 to qualify for the November ballot, this requirement stands. (The initiative was filed in reaction to this WSHRC rule with the hope of amending the WLAD to limit restroom access to biological sex.) Note also that Seattle law goes even further by preventing businesses from restricting any public single-occupant restroom to a specific sex or gender identity. Businesses must allow any public single occupant restroom to be
used by any person, regardless of sex or gender identity. As of March 2016, the law also requires businesses to post gender-neutral signs at single-occupant restrooms at restaurants, hotels or other places open to the public. Businesses that violate these rules face city fines. Knowing the legal landscape, however, does not address the very real practical issue of employee or guest discomfort. Even without a statewide law requiring gender-neutral restrooms, they can help solve this dilemma. A singleoccupancy, gender-neutral option can help accommodate any transgender workers who have not (yet) shared this information. Visitors, clients or guests who are transgender may be more comfortable using a gender-neutral restroom. With a plan in place, hospitality businesses should have the tools to handle future situations in a lawful and practical manner. More information can be found by visiting the WSHRC’s website at www.hum.wa.gov, Seattle’s website www.seattle. gov/civilrights/programs/gender-justice-project/allgender-restrooms, or through your legal counsel. This article is not intended as legal advice. Please consult your employment attorney for guidance on your specific situation. Catharine Morisset is a partner in Fisher Phillips’ Seattle office. Her practice focuses on representing local and national employers in litigation in state and federal courts, on appeal, and also before the EEOC and similar state agencies in all aspects of workplace law. You can reach her at cmorisset@fisherphillips.com or visit www.fisherphillips.com for more information. August 2016 │ 21
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Simple Ways to Improve Draught Beer Quality and Profitability
Follow these recommended standards and you’ll improve both the quality of the beer you serve and your bottom line. By Annie McGrath Executive Director, Washington Brewers Guild
Today, beer drinkers are turning more and more to local craft beer, and they know what they like. Beer consumers are savvier than ever, have higher expectations for the beer they are drinking than ever before, and are willing to pay more for a quality product that is delivered fresh, on draught, to their pint glass. In 2015, craft beer sales grew nearly 13 percent nationwide. Here in Washington, we now have 320
craft breweries producing some of the best beers in the country. Together, Washington craft brewers and Washington restaurants and bars are perfectly poised to give today’s consumer exactly what they want – delicious, fresh, local, clean draught beer. Adopting proper draught quality procedures and standards will ensure that the beer you are pouring hits the mark for your customers, each and every time.
In 2015,
craft beer sales grew nearly
13% nationwide
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In addition to making certain that your customers experience their beer exactly as the brewer intended, proper draught quality protocols will actually increase your profitability. It all starts with clean draught lines. The Brewers Association, an American trade group comprised of more than 1,900 brewers nationwide, recommends cleaning draught lines with a recirculation pump at a minimum of once every two weeks. By following this recommendation, you will restrict the growth of bacteria which negatively impacts a beer’s flavor. In fact, a recent study conducted by the Brewers Association found that retailers who began cleaning draught lines with a recirculation pump and a twoto-three-percent caustic solution on a two-week cycle increased sales by four percent. The investment in switching from a monthly cleaning cycle to a two-week cycle is less than two cents per pint and reduces the profit on a keg by only 0.63 percent.
retailers who began cleaning draught lines on a two-week cycle
increased sales by 4% For the last 28 years, the historic Red Door in Seattle’s Fremont neighborhood has consistently made draft beer quality a top priority, and their beer line cleaning program is one of the main ways it ensures guests receive a perfect pint. “We’re a destination beer bar, and craft beer enthusiasts rightfully expect a fresh pour,” said owner Pete Hanning who is also a WRA board member. “Don’t be afraid to ask your beer line company questions and always monitor how much time they are taking with your lines,” he said. “At the Red Door, we have 21 beer lines inside and at our outside bar, which we run during the summer, plus a cask beer engine. It takes my beer line company two and half to three hours to do a complete job.” There are other draught quality measures that will maximize your profitability on draught pours. Pre-mix is more than twice as expensive as blending on site, and switching from pre-mixed gas to properly balanced on-site gas blenders will help prevent improperly dispensed, under-carbonated beer.
Simple Math for Pour Profit On a $150 Half Barrel Keg*
15.5 oz.
13.5 oz.
flat pour
proper pour
128 pours x $5 = $640 / $490 profit
147 pours x $5 = $735 / $585 profit
*1984 oz ½ bbl keg.
SOURCE: The Brewers Association
Flat beer impacts your bottom line in two ways. It can lead to a loss of sales from a beer not tasting right; and it also directly contributes to over-pouring losses, which costs you money. According to our friends at the Brewers Association, a flat pour uses two more ounces of beer than a proper pour, reducing the profit over the life of a half barrel keg from $585 to $490. That’s close to $100 on a half keg. Washington brewers take pride in the beers they produce, and they appreciate retail partners all across the state who are promoting and selling local craft beers. We can profit together by delivering to today’s beer drinkers the experience they desire and the beers they deserve. And as Pete Hanning would tell you, “Remember that great beer is a terrible thing to waste.” For more information on line-cleaning, on-site gas blenders and other ways to improve the quality and profitability of your draught beer system, visit www.draughtquality.org/retailers. Learn more about the Washington Brewers Guild at www. washingtonbrewersguild.org.
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CHECKING IN
What Happens When Hotel Perks are No Longer Special? Guest satisfaction has been on the uptick, but sustaining that trend is going to take more effort. At least, that is one of the conclusions being drawn from J.D Power’s 2016 North American Hotel Guest Satisfaction Index. Overall satisfaction has improved for a fourth consecutive year, increasing by two points from 2015 to average 806, albeit a much smaller increase than in recent years. The index, which was released in July, is based on responses from more than 63,000 guests who stayed at a hotel in Canada and the United States between May 2015 and May 2016. The annual study also found that many perks have become expected amenities. “Customers have responded well to the enhanced offerings provided by some hotel brands to create value, but as those perks become standard, customers are quick to ask, ‘What have you done for me lately?’ said Rick Garlick, global travel and hospitality practice lead at J.D. Power. This shift makes the quality of service even more critical for a hotel’s success. “When guests no longer see added value in the quality of amenities they receive, the only option to truly differentiate a brand is to develop a strong service culture that makes guests feel special and appreciated,” said Garlick.
found that while satisfaction is consistently higher among members of hotel rewards programs than among nonmembers, younger guests are less likely to be members than older guests. Only 39 percent of Gen Y guests belong to a rewards program, compared with 56 percent of Gen X and 66 percent of Boomer guests.
Guests who report receiving the amenities they rank as most important:
71% Free Wi-Fi
61% Free Parking
56%
Complimentary Breakfast
Another take away from the study is the importance of enrolling younger guests in loyalty programs. The study
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INDUSTRY CALENDAR August/September Training Aug. 22
ServSafe® Alcohol, Vancouver
Sept 6
ServSafe® Manager, Seattle
Sept 7
ServSafe® Manager, Wenatchee
Sept 13
ServSafe® Manager, Kent
Sept 15
ServSafe® Manager, Tacoma
Sept 26
ServSafe Manager, Kent
NEW HOSPITALITY MEMBERS Adrift Hotel, Long Beach
Inn at Discovery Coast, Long Beach
Ajax Café, Port Hadlock
Mezzo Thai Fusion, Richland
Bellacrosta Bakery & Fine Food,
National Park Inn 8610, Ashford
H
Spokane Valley Next Door Gastropub, Port Angeles Caffe Musica, Seattle No Bones Beach Club, Seattle
®
Candlewood Suites, Vancouver
Meetings Aug. 9
Seattle Hotel Association Board Meeting
Sept. 6
Executive Committee Monthly Meeting
Sept. 7
Seattle Chapter Monthly Meeting
Sept. 13
Seattle Hotel Association Board Meeting @ Visit Seattle Office
Sept. 20
Spokane Hotel/Motel Association Meeting
Events Sept. 20
Nuthouse Grill, Lynden Chef Dane Catering, Lynnwood Parlour Car Bistro, Cle Elum Cinque Terre Ristorante, Seattle River’s Edge Lodge, Leavenworth Conway Muse, Conway Row House, Seattle Gearhead Deli, Quilcene Shilo Inn – Vancouver, Vancouver Gordon & Purdy’s, Sumner Sporty’s Steakhouse, Moses Lake
Golf FORE! Education
Green Turtle Restaurant, Gig Harbor Vashon Island Baking Company LLC, Gustav’s German Pub & Grill, Vancouver Vashon
NEW ALLIED MEMBERS
Holiday Inn Downtown Everett, Everett
SERVPRO of Edmonds, Lynnwood, & Bellevue West Leslie Weaver 19327 21st Ave W Lynnwood, WA 98036 4832 425.774.1148 lesliel@servproofedmonds.com www.servproedmonds.com
HuHot Mongolian Grill, Spokane
SERVPRO of Edmonds, Lynnwood, & Bellevue west provides 24 hour emergency service for residential and commercial properties that have been affected by fire, water, mold or biohazard damage.
Zona Blanca, Spokane
warestaurant.org
Your daily stop for regional and national industry news.
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Healthc
HEALTHCARE SOLUTIONS
Are you lying awake at night wondering if you are compliant with all of the healthcare laws? Let the WRA help you sleep better! The Washington Restaurant Association has added “HEALTHCARE SOLUTIONS” to our program offerings. To find out what works best for your business, visit: wra.cc/hcsolutions to walk through our healthcare options for your business. Or, ask your broker. Don’t have a broker? Call or email and I will set you up with an expert in our industry!
Contact Stephanie Conway for more information at 360.581.5788 or email her at stephaniec@warestaurant.org. HealthcareSolutionsFullPage.indd 1 CoreAugust2.indd 27
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Ask the Expert | Restaurant Profit Coach
Optimize Kitchen Staffing to Drive Profits By Rick Braa, CHAE
Q:
Traditionally we’ve enjoyed a steady kitchen staff with limited turnover. Over the last few years that has changed dramatically. The kitchen has turned over, and newer staff members seem more entitled and less talented than in previous years. What should we be doing differently going forward?
A:
Kitchen staff has traditionally been fairly autonomous with plenty of employees in the queue wanting jobs. This is no longer the case. Working in the kitchen of a restaurant is tough and having the right staff is critical. To improve the development process, create a better work experience and increase retention for kitchen staff, consider the following: Actively manage performance in the kitchen. Develop and use kitchen key performance indicators and most importantly, measure, post and review these KPIs with the team. Take the time to also review KPIs with individuals. Plates per labor hour, food sales per labor hour, actual food cost vs. ideal cost and SOPs are some of the KPIs that will have a major impact on performance in the kitchen. Additionally, emphasize the importance of internal customer service. Providing great service to the serving staff is a requirement and encourages teamwork and higher sales when the serving staff enjoys selling without fear of backlash by the kitchen. Pay the kitchen more. The typical restaurant uses 8,000-12,000 of kitchen labor hours per year per million dollars in sales. If each person earns $3 more per hour, that’s approximately $30,000 per year per million in sales. Raise menu prices to cover the increase in the kitchen three to four percent and most guests won’t notice. Alternatively, insist servers sell just three more things per day each and increase their sales at least $30. Four servers selling an extra $30 per day will generate an additional $43,800 in annual sales to cover a $3 per hour raise in the kitchen and the server will make more money as well.
Have a smaller staff. Be the main job. Many kitchen employees have more than one job and may be working 30 hours in one job and 20 in another. Be the company that offers the higher number of hours. Having fewer people on staff will also cost less, as there are additional expenses with each employee. The biggest reason for a smaller staff, however, is the amount of hours that can be provided. Use overtime to give your best players the opportunity to earn extra pay. For example, a staff of six people per million in sales splits 10,000 hours or approximately 32 hours per week each. Having five employees work 39 hours or four working 48 hours will yield better results. Employees given the chance to work 48 hours will be more productive and build a deeper skillset. Since they are working eight hours of overtime, they will also make more money. Building a talented and deep kitchen staff takes more effort than in years past. Restaurateurs need to use more tools to teach, train and develop kitchen staff. Measuring and coaching performance, paying more and allowing more hours per person will provide a team that excels and leads to higher profits. For a more information on improving profitability and driving performance, contact AMP Services at rbraa@ampservices.com. Rick Braa is the co-founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability.
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Convent
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