Before the advent of the coronavirus millions of workers in the US earned a living for tips in restaurants, bars, cafes, beauty salons, massage parlors and many other businesses oriented to the service. Now some of those workers who lost their jobs during the isolation, found that are not eligible for unemployment benefits because — despite the fact that they worked full time — they did not earn enough. This writes CBS News.
Sarah Mae operates in the catering sector for 14 years. She recently found out how difficult it is when the bar where she worked in the White lake (mi), has closed its doors. After closing, she immediately filed to receive unemployment benefits, but her claim was rejected.
After Mae called the representative of the office for unemployment, she was told that she earned too little to qualify for benefits. Michigan requires that the employee earn at least $3 744 per quarter to qualify for unemployment benefits. Mae, who received $4, lacked about $171.
Worker who earns Michigan’s minimum hourly wage of $9,65, could reach the minimum, working just over 30 hours a week. But workers in Michigan to pay only $3,67 per hour, and this means that they have to work twice the hours to earn their unemployment benefits.
“We have great customers, and I make pretty good money in tips,” said may. — I live from shift to shift. I know how many hours exactly will be able to earn for a change, so I know how much I can spend before my next shift. And now I cannot plan anything”.
A national problem
And it isn’t just happening in Michigan. In most US States the legal workers who receive gratuities, are paid less than the minimum wage of the state. In 35 States this wage is less than $5 per hour.
Employers are required to report the amount of tips their employees as part of their earnings for income tax and to be eligible for unemployment insurance. But completely tip often not taken into account, as the tip is irregular and difficult to track.
Many restaurants also save on reporting of working time of their employees, and some do not pay their workers, forcing them to rely on tips. An investigation by the U.S. Department of labor at the beginning of the last decade showed that almost 9 out of 10 restaurants have violated wage laws.
In the end, Mae has approved the issue of unemployment benefits. But this case involved several members of Congress. But her case is rather the exception.
“Most people just refuse to be dragged into this. They will not submit a request for a review of their right to receive assistance based on their tips,” said Andrew Stettner, senior researcher at the Century Foundation, which is studying unemployment.
Patrick Smith applied for unemployment benefits in early April, soon after in Pittsburgh, where he was working 50 or 55 hours a week, closed its doors. Just last week he received a letter from the Department of unemployment Pennsylvania with the same verdict: he wasn’t making enough money.
“I earned about $4 750 in my most profitable quarter of the year. I was told that you need to earn $5 000, recalls Smith.- It is absurd that in order to qualify for unemployment benefits, you need to earn a lot of money.”
20-year-old Smith has not received Federal assistance in connection with the coronavirus, and he said he was denied food stamps because his parents have included it in his tax return last year. Now he lives by himself and supports himself at the expense of accumulated money before the restaurant is closed.
Manager Smith offered to contact the unemployment office in Pennsylvania on his behalf, but he’s not sure it’s worth it. “Restaurants will be opened either on 1 June or 15 June, Smith said. If I appeal will I still get the answer, when it will be back to work.”
He added: “If I am allowed to return to work, I would have done it.”
High bars for unemployment
The unemployment system was never designed to take care of all the unemployed. Rather, it is more of a system of insurance for groups of employees whose companies pay taxes. States restrict by specifying requirements on length of work and amount of earnings.
“The system is designed so that it is designed for employees who are tied to labor, have a history of work and lost his job not their fault,” explained Stetter.
“If the tip is included, the majority of workers, who are paid properly, usually earn enough. But without a tip, especially in States where they don’t get minimum wage, they can not reach”, — he said.
According to the labor Department, in April, has lost about 5.3 million jobs in the food industry, while One Fair Wage estimates the number of lost today to 9.5 million. A recent study conducted by a group of protection of interests, showed that more than 40% of workers requesting unemployment insurance benefits, refused.
“This is a disaster of epic proportions,” said Sara Jayaraman, co-founder of One Fair Wage, and the Director of the research Center at the University of California at Berkeley.
“Employees with disabilities are essentially faced with two systems that have been configured against them. One of them is the employment insurance system, which tended to failure, and the other system with the minimum wage, which has created a situation where they can’t get any help yet.” Jayaraman said.
The law on assistance in connection with the coronavirus had been provided with an additional $600 per week employees who are eligible for unemployment benefits. But to determine who is eligible for this assistance, the authorities of the States.
The group “Fair wage” has created Fund of the help to the dismissed employees of restaurants and mid-March has received about 150,000 applications.
For Gwyneth Duesbury $200 that she received from the Fund allowed her to breathe easier during the first weeks when she was waiting for the decision on benefits. 21-year-old Desari was dismissed in March, and this month she learned that her application for unemployment benefits was rejected. Her boyfriend who was fired from the same restaurant, I found a temporary job, he prepares food for the workers of vital sectors.
“My savings has run out, said Duesbury. If not for this temporary job, we would not have the money.”
For Jayaraman is a sign that the system needs to be overhauled.
“If the States are saying to these workers: “You earn too little to qualify for unemployment insurance,” it should be a signal to the country that they are doing too little,” she said.