Supplier: “I think this is tougher than brain surgery."
When New York City first mandated vaccines for restaurant employees and guests dining indoors, it was unclear how the industry would fare. After all, independent restaurants have been asked to survive one ordeal after another this past year, with COVID restrictions, shutdowns, restarts, more shutdowns, supply chain issues, and an overarching labor shortage to top it all off.
Now, a few weeks after the city started enforcing vaccine cards as entry tickets into restaurants on September 13, some believe the impact is becoming clearer.
Restaurants are losing customers and money, says former NYC restaurant owner and CEO of PPE supplier WeShield Michael Sinensky. And a growing number of restaurant employees may now be working in fear.
Sinensky was behind some New York staples like Sidebar, Village Pourhouse, Sushi by Bou, and simplevenue. He says the new mandate puts restaurants and their employees in a “weird position” of policing the mandate and requiring citizens to show private medical records. This ultimately causes conflicts and some guests may be put into an immediate bad mood upon walking in the door.
While Sinensky, as the CEO of a PPE supplier, says the more people get vaccinated the better society is, he thinks the way the mandate was rolled out puts restaurants specifically in a tough spot. Restaurants are targeted in the mandate, while consumers can eat at coffee shops and grocers like Whole Foods no problem, Sinensky says.
“I don't mind the vaccine mandates, if everyone was on the same playing field, but the fact that you're giving an unfair advantage to some businesses versus the others is what I have a problem with,” Sinensky says.
The Big Apple is not the only city to enact a vaccine requirement for indoor dining. San Francisco and New Orleans passed similar regulations this summer for restaurant employees and guests.
Later, President Joe Biden released an impending federal Occupational Safety and Health Administration guideline requiring all businesses with more than 100 people, including restaurants, to require vaccines for employees or test them weekly.
The details beyond requiring employee vaccination or weekly testing are still unknown, says Christine Green, an attorney at Stanton Law.
“We don't know what exemptions will accompany the mandate or what provisions might assist companies with costs,” Green says. “Before we hit the panic button, we're counseling to remain cautiously optimistic that the rule will be more palatable than we think.”
How restaurants will be impacted by the federal guidelines will likely depend on employee size, employee vaccination rate, existing policies, and financial conditions.
According to a Black Box Intelligence survey of 100 restaurant chain operators, 61 percent disagree with the new regulation. And 58 percent have not yet finalized their plans moving forward.
Restaurants are mostly operating on a “wait-and-see” basis as the rule will likely be fully outlined this fall. But Green says she’s hearing the mandate will be implemented by the company, not by location, which could cause a greater impact on chain restaurants.
Legal challenges to the rule are likely, but whether they will be successful is unclear. Regardless, Green says, the timeline to get to that type of decision may not make much of a difference for restaurants, which will still be forced to follow the rule in the meantime. Depending on the jurisdiction, a court might grant a stay pending the outcome, or it could be six or more months until a decision is reached.
Green recommends restaurant owners talk to trusted legal counsel on their best response to the incoming federal mandate.
“Compliance with a rule like this is not a one-size-fits-all proposition,” Green says. “I think it makes sense to wait to see the rule before making policy changes. But having the brainstorming sessions with your counsel now is advisable.”
In New York, about 15–20 percent of Sinensky’s restaurants’ reservations have been canceled when guests ask about the policy. While unvaccinated consumers can still eat outside, winter is coming, so this revenue avenue will quickly dwindle in the weeks ahead.
He says enforcement at restaurants has not been consistent. As a diner, some restaurants ask for a vaccine card, some ask for a card and ID, some hosts barely look, Sinensky adds. One of his staff members has been spat on and cursed out, and the reservations department harassed and verbally assaulted.
All in all, he believes the execution is sorely lacking. Customers get around the rule by going to other businesses that serve quick-service food without being designated as a restaurant (the coffee shops and grocery store cafes of the city).
“Government's intention is usually good, but if the government is too big, the execution is usually half-assed and piss poor,” Sinensky says. “And that's what's happened.”
In application, the loopholes can give some New York businesses advantages over others. The same can be true for local jurisdictions.
In 2020, when the state of New York elected to let restaurants reopen, but New York City did not, Sinensky made a choice to reopen Sushi by Bou. Following a story released by NBC on its reopening, Sinensky said they were ultimately punished.
“I wasn't doing it to make a political statement,” Sinensky says. “I was doing it based on the fact that New York state said I can open, but politically, there was an argument between the mayor and the governor, and we were being punished for that.”
Sinensky advises other restaurants to learn from his past decisions and work to survive while still following vaccine mandates and COVID restrictions.
“No matter how hard it is, just follow the rules, and don't try to be a hero by going against the system,” Sinensky says. “And if you are going to go against the system, do it in a smart way by coming together with other like minded businesses and restaurant associations. Don't fight alone. Fight together.”
Restaurateurs are fighters in one of the toughest industries, he says. The strategies they employ to get through this will reflect that.
“I think this is tougher than brain surgery,” Sinensky says. “They have to be creative. They have to try to get every dollar in the registers as much as possible. Delivery, takeout, extra seats outside, catering, at home catering. They have to think of every possible way that they didn't have to do before when they had 100 percent occupancy ... Now they have to focus on expanding and scaling their revenues, not solely dependent upon people coming to your restaurant.”
In New York, restaurants with large outdoor areas are the most likely to thrive in the 2021 era as so many other places have closed. With a new business-friendly mayor, Sinensky thinks things will get back to “normal” in the next 18–24 months. But he says it’s imperative that offices bring employees back to work because tourists and residents alone will never be able to fully support NYC’s restaurants.
The labor shortage is an additional obstacle restaurants face, and requiring employees to be vaccinated (or tested regularly) may be another hurdle to getting through that. The issue is polarizing among employees, customers, and business owners.
According to Black Box, 59 percent of operators said employees will quit, and 53 percent said it will be harder to find new employees. Many unvaccinated workers would rather leave than take the vaccine, according to Lisa Miller, a consumer insights and innovation strategist who has tracked behavior throughout the pandemic.
Part-time workers were significantly more likely to not be vaccinated (37 percent part time versus 28 percent for full time employees). Per Miller’s data, these part-time workers were also three times more likely to quit than get vaccinated to keep their job.
“With respect to employee retention, and customer base, some employees or customers are going to feel safer, whereas others are going to feel marginalized,” Green says. “So you may see some chaos here before it gets better.”
The exact cost of these mandates on restaurants’ business is hard to predict. Some may be happy they have an additional protection against the virus, while others may resist the mandate due to its implications for business.
It’s just another issue restaurants have had to navigate during the pandemic, a pandemic Green says brought to light the weaknesses restaurants already had. Specifically, low pay and labor dissatisfaction, which may be the key drivers of this labor shortage. Still, she believes restaurants have the power to rise above.
“I think the industry will adapt and will likely need to start paying their employees better to attract and retain workers, but ultimately dining is a huge part of our culture, and I don't see this industry staying down,” Green says.