Virus Puts U.S. Restaurant Sick Leave Policies Front and Center

(Bloomberg) -- Terrence Wise has worked at McDonald’s in Kansas City, Missouri, for nine years — and says he never once called in sick. It’s not because he has perfect health. It’s because he can’t afford to miss one day’s pay.

“Earlier this winter, I had a little cold and didn’t feel well, even thought I should call in, but I had to go,” he said. “Rent is due, bills are due.”

The issue of paid sick leave for restaurant workers has taken on a new urgency in the midst of the coronavirus pandemic. Some companies are offering temporary fixes, though this is complicated by the franchise system. And the House of Representatives is working on a virus-response bill that would address paid leave.

But emergency measures don’t address the long-term issue, which has ramifications that go far beyond the current outbreak. More than 70% of restaurant workers do not have access to paid sick days, according to Teofilo Reyes of ROC United, a worker advocacy group.

Most of the workforce serving up Big Macs and Chicken McNuggets isn’t paid for sick days. Wise, who’s active in the Fight for $15 movement pressing to raise the federal minimum wage and who volunteered to speak on the issue of sick pay, said that at his McDonald’s location, he can interact with hundreds of customers every day.

After health-care workers, service workers with public facing jobs — like those in restaurants and stores — are the most likely group to contract and transmit the virus, says David Michaels, a professor of environmental and occupational health at The Milken Institute School of Public Health at George Washington University.

“People have to be encouraged if they have symptoms to stay home,” he says. While companies — including McDonald’s — frequently say that sick employees should not come to work, Michaels cites a 2017 study that found that access to paid sick days could directly translate into more sick employees staying at home, and a reduction in the spread of the flu in workplaces.

Restaurants Face Questions

Yet, the restaurant industry has long been reluctant to implement these kinds of policies outside of the 12 states and District of Columbia where it’s mandated. The National Restaurant Association and its local affiliates have opposed paid sick days in more than a dozen states across the country.

The NRA declined to explain its longstanding opposition to paying the groups’ employees for sick time, but it is continuing to lobby Congress during the public health crisis.

“We are currently talking with our members and elected officials about how to help restaurants and their employees address this issues like paid leave and other policies that help workers who need time to recover,” Sean Kennedy, a spokesperson for the NRA said in a statement.

Rob Hunziker, owner of Advanced Restaurant Sales, a restaurant brokerage, said: “The problem is when you’re dealing with the restaurant industry, they’re looking at every dollar. They don’t have the luxury of increasing the prices to offset paid sick days.”

In the meantime, restaurant companies are being forced, one at a time, to deal with the issue.

One company decided to permanently offer paid leave. On Monday, after being singled out by the political newsletter Popular Information, Darden Restaurants Inc., the operator of Olive Garden, Longhorn Steakhouse and other restaurants, announced a new sick leave policy for all hourly workers.

Others aren’t going as far as that. Following Darden’s decision, and after being targeted for its policy by Fight for $15, McDonald’s Corp. said it would offer employees of corporate-owned U.S. restaurants two weeks of pay in the event of a quarantine, in addition to their existing sick leave, but those locations account for only about 5% of total U.S. locations — including Terrence Wise’s. The rest of the chain’s restaurants are franchised.

Franchisees Fret

The company’s decision, and its extremely limited applicability, shows that matters of paid sick leave are complicated by the restaurant industry’s popular franchising structure. While McDonald’s does control many aspects of the restaurants, it’s the independent franchisees who make day-to-day decisions about hiring, wages and many menu prices. That makes it tough for the parent companies to dictate exactly how individual stores handle staff and crisis situations. Many others, including Dunkin’ Brands Group Inc. and Subway Restaurants, are mostly or entirely franchised.

McDonald’s announcement upset franchisees who weren’t given any guidance or assistance on offering paid leave to sick workers. It’s stressing the relationship between the company and its restaurant operators, according to a person familiar with the thinking of one of McDonald’s franchisee groups, the National Owners Association, which has about 1,200 members.

“It’s times like these that test the strength of the Golden Arches,” the group’s board said in a letter sent to its membership on March 11. “There is no gold holding them up, it’s the people behind them doing the work.”

A McDonald’s spokesperson said as the company monitors the impact of the coronavirus, it is continuously evaluating its policies to provide flexibility and reasonable accommodations, adding: “Our people are the heart and soul of the McDonald’s family and, of course, we will support them through this unique circumstance.”

Dunkin’ pointed questions about paid sick leave to the franchisees as well. “Dunkin’ restaurants are independently owned and operated by individual franchisees who are responsible for making their own business decisions such as the benefits they offer their employees, including sick leave,” spokesperson Michelle King said in a statement.

The need for a real solution is becoming more apparent as the disease spreads, though. Coronavirus cases have shown up in a Waffle House employee in Georgia and a Panera employee in Iowa, forcing both locations to close for cleaning. Waffle House said it would pay the employees who are now quarantined as a result of working with their infected coworker, but said it would not provide information about benefits generally. Panera did not respond to requests for comment about sick days or the Iowa location.

Bloomin’ Brands, owner of Outback Steakhouse, said that any employee who is quarantined or is sick from coronavirus will be paid for missed work, in addition to the longstanding company paid time off benefit of as much as two weeks a year.

Starbucks Corp. has also said that it would expand emergency pay for staff affected by the coronavirus in its U.S. stores, in addition to the sick pay it has offered since July 2018. Chipotle Mexican Grill says it offers three paid sick days to its staff and more where required. In response to coronavirus, the company said it is being “flexible.”

As federal legislators debate emergency responses to coronavirus, Michaels, the public health expert, urges state and local authorities to step in, even if just with temporary measures.

“We can’t just underpay undocumented workers and expect them to produce our food and take care of our children,” he said. “We are at a risk if they get sick. This is a time when the country has to come together and take care of anybody.”

To contact the reporters on this story: Deena Shanker in New York at dshanker@bloomberg.net;Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Anne Cronin at acronin14@bloomberg.net, Jonathan Roeder

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