The Ralph and Goldy Lewis Center for Regional Policy Studies

The COVID-19 pandemic placed a spotlight on the restaurant industry by highlighting poor working conditions, increased employee turnover, wage inequity, and inadequate access to health insurance, paid sick leave, and paid family leave. These issues have long afflicted restaurant workers, who disproportionately belong to marginalized groups including women and racial and ethnic minorities. In partnership with the Movement to Organize for Restaurant Equity (MORE), we sought to identify policies to improve workplace equity and job satisfaction while maintaining restaurants’ financial stability. Using Los Angeles County (LAC) as a case study, we surveyed and interviewed restaurant operators and workers to better understand industry conditions. Operators wish to offer better pay and benefits to their employees, but often lack the financial resources to do so. At the same time, workers struggle to keep up with LAC’s high cost of living. We recommend five policy options that help restaurant operators fund increased wages and/or benefits for their employees: Replace tipping with an automatic gratuity; Replace tipping with service-inclusive menu pricing; Maintain tipping while supplementing employee wages through increased menu prices; Maintain tipping while supplementing employee benefits through a service charge; Increase menu prices to supplement employee benefits. We also emphasize six benefits preferred by employees: paid time off, health insurance, paid sick leave, retirement benefits, paid family leave, and mental healthcare services. We additionally make policy recommendations for MORE that includes producing guidelines for operators to create equitable tip pooling structures, and advocating for legislation that expands benefits for California workers.