Duluth Restaurants Take Stance Against ‘Earned Sick & Safe Time’

The ordinance would include two options for workers.

DULUTH, Minn. – More than 20 restaurants with the Duluth Local Restaurant Association have sent a letter to city councilors against the idea of requiring Earned Sick and Safe Time for all employees.  Councilors are expected to take up the issue at the next city council meeting March 26. The ordinance would include two options:

1. Workers would earn safe and sick time upon being hired or 30 days afterward. Earning it at a rate of at least one hour for every 30 hours worked

2. Requiring employers to have a written policy about earn sick time at a rate of three days annually.

The letter reads:

“Dear City Councilors:

You have received the letter form Mr. Tony Bronson, and the DLRA, and as a 31 year salaried manager for Grandma’s (and having worked in several of the DLRA businesses myself) I am very familiar with how vitally important it is to retain good staff, provide quality product at a great value for the guests, all the while making for a profitable operation.  As mentioned in the letter, and very much realized already by everyone who goes out to eat,  we will not be able to raise prices to absorb this mandate, will have to cut benefits, jeopardize staffing, and scale back operations.  This is not the direction any of the operators, owners, city, or state want to go.  You must reach a more equitable compromise that will be fiscally sound for local businesses.

The Duluth Local Restaurant Association (DLRA) met on March 6 to discuss the earned Sick and Safe Time draft. We were hoping to be able to review the actual proposed ordinance but it had not yet been released. As a reminder, our organization represents over 25 hometown, full-service restaurants that employ over 3,000 full time and part time folks with a wide span of skill sets and a local payroll of close to $30 million.

It has been difficult to watch the hospitality industry that we LOVE be as vilified as it has been by proponents of this Sick and Safe ordinance. Every day we work side-by-side with our employees. We know their stories, we know their families, we know their challenges, and we CARE about them.

Many of our restaurants have built their business cultures by offering our unique employees strong mentoring, multiple growth opportunities, and career paths through our collection of benefits. Each of us provide unique packages of compensation and benefits based upon our employee’s  needs, wants, and desires. The proposed draft, which clearly has some details to figure out, will create change and costs to these benefit packages as they exist today. The reality is, that because of our already tight business conditions, we may need to borrow from some of our present benefits (Health Insurance, Free Meals for employees, Vacation time, 401k Contributions…) to allow us to take on the additional expense of ESST and still keep our doors open. A more onerous mandate will make that borrowing even more difficult and drastic.

As frustrated as we are that our local government seems compelled to mandate what benefits our employees will receive, we do agree that Councilor Hansen and Councilor Hobbs have tried to strike a balance that combines input from the community as well as the realities that the effected businesses will feel.

We all have seen the impact that automation has had on other industries. While this automation has been partially driven by human ingenuity, it has also been accelerated by the cost of human labor. We are a PEOPLE industry, and we are unhappy being forced to eliminate our employees in order to stay in business. Because after we redistribute benefits and cut employees to try to remain solvent, the only thing left to do is close doors. We don’t believe that anybody wants loss of jobs to be a consequence of this ordinance. We cannot continue to simply pass these costs to our guests any longer – we are now at the apex of what our guest can afford and we hear it every day and see it in our numbers.

The bigger issues that are seemingly missed by this well intentioned effort are as follows:

  1. This is an incredibly competitive industry in a city of stagnate population growth. We have experienced a countless number of inordinate expense increases and a history of additional tax increases that have driven our costs and prices to an inability to compete.

These include increases in real estate taxes (30%), utilities (+30% in the next 4 years), additional taxes (street increase), labor increases  (state mandates over the last 3 years), benefits (health care, now mandated ESST) and it is certainly overwhelming us and our customers. Many of us are embarrassed of our menu prices as they exist today, driving customers to find alternative ways to eat out (Sam’s Club, Kwik Trip, etc.) . If this ordnance was so important to the council, it would be very helpful if the city could provide assistance in an expense reduction, or tax benefit to assist our industry

  1. Our locally grown trade has always been a labor of love to display Duluth’s uniqueness. But it is fragile, with razor thin margins. Local government seems to be unmindful or disbelieving of this. We have real solutions to the disparities in our industry, but we know it would require real bravery and leadership to initiate those changes that would make our industry great again. We are willing to continue to sit down and present our solutions and look forward to future engagement.
  2. There have been no answers to how any ordinance of this nature will be enforced and the cost of this enforcement to the City and the taxpayers therein. There is an alarming lack of concern for this component of this particular legislation. This will effectively create a “Dept. of Labor” in City Hall and it will need to be staffed by professionals. Given the City’s financial status and lack of growth, the citizens must be informed of the real costs to them of such a mandate – both in increased taxes and prices, as well as job loss. This must be vetted before any measure is mandated – just like any other responsible policy making would require.

Thank you.

Bellisio’s Italian Restaurant & Wine Bar

Black Water Lounge

Black Woods Grill and Bar

Burrito Union

Clyde Iron Works

Duluth Grill

Endion Station

Fitger’s Brew House

G.B. Schneider

Grandma’s Saloon & Grill – Canal Park

Grandma’s Saloon & Grill – Miller Hill

Green Mill

Greysolon Ballroom

Little Angie’s Cantina

The Lyric

OMC Smokehouse

Pickwick Restaurant & Pub

Rathskeller

Silos Restaurant

Sir Benedict’s Tavern

Tavern on the Hill

The Sports Garden

Thanks,

Tony Bronson

Director of Business Development, Grandma’s Restaurant Company

Sincerely

Bill Humes

General Manager – Grandma’s Saloon & Grill – Miller Hill”

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