Restaurants struggling to rehire workers when unemployment sometimes pays more

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HAMPTON ROADS, Va. (WAVY) — A government bailout for the unemployed may be backfiring for some local restaurants because, in some cases, unemployment pays more.

Stephanie Gilbert and her husband own the Dirty Buffalo restaurants in Hampton Roads. 

She has been trying to hire 100 workers this week, but she said she doesn’t blame their furloughed workers for taking a better gig — one from the government.  

“If we had the opportunity to stay at home and have a little vacation and collect a paycheck and not have to work … It’s a hard industry to work in, so I get it. I would probably rather stay at home, too,” Gilbert said.

Before COVID-19, the restaurant employed 198 people at three locations. On March 18, they laid off 168.

“We have offered jobs back to 95 percent of those people, but only 68 have come back,” Gilbert said.

Some employees said they don’t feel safe returning to work yet, but others admit the increased benefits for workers provided under the CARES Act is more than they’d make going back to work.

“Guaranteeing people an additional $600 a week in unemployment insurance through the end of July, I think was kind of overstepping,” Gilbert said.

Gilbert received a paycheck protection loan from the government. As part of the terms of the program, she must have a full staff back at work eight weeks after she received the loan. That would be mid-June. Unemployment benefits are guaranteed until July 31.

U.S. Sen. Tim Kaine of Virginia spoke about this apparent conflict of government programs. 

“Both programs are good and both programs are helping people, but you point out there can be a little bit of a clash between them,” Kaine said.

Kaine said that disparity was raised with the Small Business Administration.

“I would like to have these businesses be able to use the funds to get through this hard time and then to have the loans converted to a grant if they can reassemble their payroll at the end of this emergency,” he said.

He said that should happen at some reasonable time after those extra unemployment benefits end.

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