Thousands of food service employees out of jobs as Pa. unemployment claims spike

By: - March 18, 2020 4:25 pm

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Randall Hayes saw a stark choice — earn a paycheck, or help stop a pandemic.

The 34-year old Harrisburg resident worked at El Sol, a Mexican restaurant just blocks away from the state Capitol.

As he worked last weekend, his mind raced with questions: Could he have caught COVID-19 without showing any symptoms? What if he passed that on unknowingly to a customer during a bustling Saturday night shift?

He made a decision after work Sunday. Hayes said he wrote an email to his manager explaining that he “can’t keep acting like business as usual and it’s irresponsible for me to ignore the advice of professionals.”

“I feel like I’m overreacting, but I feel like it’s the best thing to do,” he told the Capital-Star.

Hayes’ decision was borne out when Gov. Tom Wolf asked for all restaurants to close their dining rooms Monday. Establishments that provide carry-out, delivery, and drive-through were allowed to continue operating.  

But he still joins thousands of restaurant and bar workers who are now out of work with few options, as the spread of COVID-19 causes swaths of the service economy to grind to a halt, straining the state’s unemployment system.

On Monday alone, the system received 50,000 applications for benefits, according to the Associated Press.

Such a demand for jobless benefits hasn’t been seen since at least the 2008 recession, and unemployment experts say that the system might struggle to bear the workload.

“I’m not sure they’re equipped to handle the number of claims they will be getting,” said Jack Dougherty, an attorney specializing in unemployment compensation at the Harrisburg labor law firm Ira Weinstock P.C.

And restaurant workers will be a large number of those seeking help. 

According to the most recent federal data from May 2018, 505,080 Pennsylvanians work in food preparation and service, from line cooks and bartenders to servers and dishwashers. That’s the state’s third-largest sector, according to the Bureau of Labor Statistics. And it makes up 8 percent of the state’s employees.

Before Wolf’s order, employees were already seeing slow downs at their jobs.

Alex Diaz Morales, a 20-year old Philadelphia resident, worked at the Franklin Institute, a popular science museum, as an events caterer.

January is normally slow, Diaz Morales said. She had just one shift that month, but that was normal in her experience. But then she only worked one shift in all of February, and she could tell something was off.

“I hadn’t been scheduled for anything, because nothing was going on,” she told the Capital-Star.

The Franklin Institute officially closed for two weeks on March 14. Meanwhile, a restaurant where Diaz Morales worked a second job closed down indefinitely on Sunday.

She’s contemplating tutoring Spanish or trying to pick up work as an artist. Either way, the rent is still due, and her cat needs to be fed.

Not on sick leave, but laid off

Both workers and employers contribute to the state’s unemployment system, established in the midst of the Great Depression. Employers’ rate changes based on how many workers quit or are fired from the job, labor attorney Dougherty said, to encourage safe and secure workplaces.

If an employee has been laid off or quits, they may then qualify for bi-weekly payments of between $68 to $561. The exact payment depends on how much money the worker made over the course of the last year. Benefits are only available for about six-and-a-half months.

In an advisory Monday, the state Department of Labor and Industry said that workers who’ve lost hours or their entire job because of closings due to the coronavirus, as well as workers who are self-quarantining could qualify for unemployment benefits.

“It is important to relieve some of the financial pressures our workers are facing so they can focus on remaining healthy and safe,” the agency’s secretary, Jerry Oleksiak, said in a statement. He also added his voice to the surge of lawmakers and advocates demanding guaranteed paid sick leave.

But business groups, such as the Pennsylvania Restaurant and Lodging Association, have been skeptical of such a move.

“If restaurants are closed, people aren’t out on sick leave — they’re going to be laid off,” association President James Longstreet told the Capital-Star.

Fixing the unemployment system should instead be a priority, Longstreet said — such as preventing employer contribution rates from skyrocketing due to unforeseen coronavirus related closings.

That’s a measure North Carolina Gov. Roy Cooper took Tuesday when he expanded the state’s unemployment benefits — among the stingiest in the country. But he also exempted businesses from paying for those expanded, coronavirus-related payments.

In Pennsylvania, the restaurant association is also asking the state to authorize no-interest loans to keep small businesses open.

While takeout and delivery are still options, Longstreet estimated that cooking and delivering pizza, cheesesteaks and Chinese food would only keep about 20 percent of food service workers employed throughout the coronavirus-related shutdowns.

And some laid-off workers, with health and safety at the front of their mind, told the Capital-Star they aren’t jumping at the chance to be a delivery worker.

Relief isn’t yet on the horizon, though the state and federal governments have announced some small moves. On Tuesday, the state Department of Labor and Industry suspended a mandatory, one-week waiting period to receive unemployment checks, as well waiving job-seeking requirements.

Paying the bills

Still, payments can take up to four weeks to process, according to the department’s website. And the workers processing claims are already raising concerns about their workload.

Speaking on a press call Tuesday, Chris Good, one such worker, and a SEIU 668 union member, said that the system was under resourced.

“With the increasing pace and scale of [business] closures, it’s going to be extraordinarily difficult” to provide help in time at current staffing levels, Good said.

A coalition of more than 50 unions, community groups and lawmakers called for Wolf and the legislature to provide more dollars for unemployment processing Tuesday. 

The demand came in a letter asking for, among other things, cash assistance for all Pennsylvanians, paid sick and family leave for all workers, and the suspension of foreclosures, evictions, utility shutoffs, and student loan payments during the pandemic.

Some of these demands are already in place. The Pennsylvania Public Utility Commission placed a moratorium on utility shut offs Friday, while President Donald Trump on Wednesday ordered a halt of evictions and foreclosures until the end of April. 

Meanwhile, bipartisan discussions continue in Washington D.C. to provide cash assistance to all Americans. 

Hayes and Diaz Morales both said they think they can make the coming weeks unemployed work. But that’s not the case for all workers.

Randi Trent is an employee Aramark, a food service giant, at Philadelphia’s Wells Fargo Center. She is also a member in UNITE HERE Local 274, a union representing 4,000 hotel, university, stadium and cafeteria food and hospitality service workers in Philadelphia. 

She can normally afford her $400 a month health insurance premium when she gets normal hours. But with both all sporting and concert events suspended, she’s not sure how she and her boyfriend will get by.

“After next month,” Trent said on a press call Tuesday, “it’s going to come down to whether we are paying rent or health insurance. Right now, unemployment just doesn’t cover that.”

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Stephen Caruso
Stephen Caruso

Stephen Caruso is a former senior reporter with Pennsylvania Capital-Star. Before working with the Capital-Star he covered Pennsylvania state government for The PLS Reporter.