Page 26 - BusinessWest July 21, 2021
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Leaving — No Doubt
Employees Are Quitting at Record Pace; Employers Are Responding
By George O’Brien
Peter Rosskothen admits to not knowing there is a statistic called the ‘quit rate.’ But he could certainly relate when told
that this stat — a measure of how many people in the workforce quit their jobs in a given month — is historically high (2.5% in May, down from a record 2.8% in April, according to the Bureau of Labor Statistics) and also when told the reasons why.
Rosskothen, owner and operator of the Del- aney House restaurant, the Log Cabin Banquet & Meeting House, and several other businesses, told BusinessWest he cannot recall a time (and he’s been in business for nearly 40 years) when it’s been more difficult to hire, and especially retain, people, particularly in the restaurant and banquet business.
He cited a host of reasons, starting with the fact that, during the pandemic, many of the workers in that field couldn’t keep working with- in it because businesses had to close their doors — for a few months or, in some cases, forever. So they found something else, and now, they don’t want to go back.
Meanwhile, with everyone fighting hard for good help, many companies are paying more — enough to turn heads in many cases and prompt people to leave for what appear to be greener pastures. With that, Rosskothen related the story of how he lost one of his managers to a competi- tor, one that was offering considerably more than this individual was making.
“I had to decide if I wanted to match, and ultimately decided that I wouldn’t,” he said, add- ing that he opted to hire someone at roughly the
same rate he was paying and absorb the other costs attended with doing so, such as training. And everyone he knows in this sector is facing the same kinds of hard decisions — on a regular basis.
“Some people are looking to obtain a salary boost, and others are looking for greater career- advancement opportunities,” Pileski told Busi- nessWest. “When the pandemic hit, many people had a lot of time to think — they were in quar-
 SARA PILESKI
those of the company they work with.
“
think — they were in quarantine, some were furloughed or laid off — and they took this time to assess what was important to them: flexibility, compensation, career advancement, and whether their own values line up with
”
antine, some were furloughed or laid off — and they took this time to assess what was impor- tant to them: flexibility, compensation, career advancement, and whether their own values line up with those of the company they work with.
“During COVID, people re-evaluated what they are looking for in their careers,” she went on. “And a lot it has to do with flexibility. People, and businesses, have learned that people can be successful working remotely, so many individuals have been looking for fully remote roles, and a big piece of that is Millennials.”
When the pandemic hit, many people had a lot of time to
      Leaving for a higher salary is just one of the reasons why the nation’s quit rate is so high, said Sara Pileski, a regional vice president for Robert Half International, a national staffing business with a local office in Springfield.
She said many individuals stayed with their jobs through the pandemic because of the secu- rity they provided at a time when unemployment was soaring. Now that the worst is over, many are looking around and, in many cases, deciding it’s time to move on — for any number of rea- sons, ranging from a fondness for remote work and a preference to keep toiling that way when the boss is ordering them back to the office, to a desire for a different culture.
Elizabeth Wise, president of the Employers Assoc.
Quitting
Continued on page 28
clearly stated to customers that the fee is not a tip, gratuity, or service charge for tipped employees. Thus, any fees not intended as gratuities and not paid solely to tipped employees should not be labeled as a service charge.
Food for Thought
These complexities are especially important to Massachusetts employ- ers, given that the consequences of failing to comply with wage-and-hour laws can be costly, and the penalty is the same regardless of whether the employer violated the law willfully or by mistake.
Considering the consequences
of violations, businesses with tipped employees should regularly consult with their employment counsel to review their practices and policies to ensure compliance with state and fed- eral law. u
Ludwell Chase and Amy B. Royal work at the Royal Law Firm LLP, a woman-owned, boutique, corporate law firm; (413) 586-2288; aroyal@ theroyallawfirm.com
  Tips
Continued from page 25
result, these are areas where it is easy for employers to make mistakes. There- fore, employers need to pay special attention to ensure they are comply- ing with both state and federal laws. As of Jan. 1, 2021, the minimum wage in Massachusetts is $13.50 per hour. Mas- sachusetts is incrementally increasing the minimum wage in order to reach
a $15 minimum wage by 2023. For now, employers may pay workers who make at least $20 a month in tips a tipped hourly wage of $5.55 and take a tip credit of up to $7.95 per hour, for a combined minimum wage of $13.50.
The Massachusetts Tip Law man- dates that all tips must be given to employees whose work directly gener- ates tips, and that employers and man- agers may not keep any portion of their employees’ tips. The law applies to three categories of employees: waitstaff employees, service bartenders, and service employees. Waitstaff employees include waiters, waitresses, busboys, and counter staff who serve bever- ages or food directly to patrons or clear tables, and do not have any manage- rial responsibilities. Service bartend- ers prepare beverages to be served by
another employee. Service employees include any other staff providing ser- vice directly to customers who custom- arily receive tips but have no manage- rial responsibilities. For the purposes of this law, managerial responsibilities are duties such as making or influenc- ing employment decisions, scheduling shifts or work hours of employees, and supervising employees.
Massachusetts law allows for ‘tip- pooling’ arrangements. This means all or a portion of tips earned by waitstaff employees are pooled together and then distributed among those employ- ees. Employers must be cautious when administering a tip pool and ensure that only waitstaff, service bartenders, and service employees are being paid from the pool. This means manag-
ers and back-of-house employees like cooks and dishwashers cannot share in tips. Even employees with limited man- agerial roles who also directly serve patrons are not considered waitstaff employees on days when they perform managerial duties.
When employees do not receive enough in tips to make up the differ- ence between the tipped hourly wage and the minimum wage, employers
must pay the difference. Employers are required to calculate tipped employees’ wages at the end of each shift, rather than at the end of the pay period.
This requires employers to keep track of how much workers receive in tips for each shift. This may also require employers to pay their tipped employ- ees additional amounts in order to compensate for slow shifts.
Under Massachusetts law, certain businesses, including restaurants, are exempt from paying employees over- time; however, they may not be exempt under federal law. If subject to federal law, employees working in restaurants must be paid one and one-half times the minimum wage (not one and one- half times $5.55 per hour) for all hours worked in excess of 40 hours per week.
Under the Massachusetts Tip Law, if a restaurant includes a service charge, which serves as the functional equiva- lent of an automatic tip or gratuity, all the proceeds from that service charge must be paid only to waitstaff employ- ees, service employees, or bartend-
ers as a tip. Employers may, however, charge a ‘house fee’ or an ‘administra- tive fee,’ which they may use or distrib- ute at their discretion, but only if it is
  26 JULY 21, 2021
EMPLOYMENT
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