5 ms·

Entire staffs at 3 Sonic locations quit after wages cut to '$4/hour plus tips'

43 points by willart4food 8y ago

toomuchtodo 8y ago
Proof collective action works. The PR was so bad, corporate stepped in and and exercised their right to forcibly acquire the locations in question back from the franchisee. The workers have been offered their jobs back as well. “Additionally, with the ownership change, employees may now have their paycheck direct deposited and general managers are now eligible for a new bonus program, among other benefits.”
- anm89 8y ago
  I was going to say, unfortunately this probably came at the personal expense of the employees who probably needed the work. Great to hear that this actually led to them getting better treatment.
- NoblePublius 8y ago
  That’s not how I read it. What I read is that the entire story is wrong, no one’s pay is cut, and the reason these signs were posted is unclear. What am I missing?
  - toomuchtodo 8y ago
    What I read was that the franchisee who made the labor decision has lost their franchises, the ownership of which has been transferred to a preferred corporate partner. “Thank you for your inquiry about the about the eight Sonic Drive-Ins in the Columbus, Ohio market that have changed ownership from a franchisee to Sonic’s operating affiliate, SRI Holding Company (SRI) as of Monday, February 25.” It’s effectively a contractual death penalty for a franchisee (not an uncommon component of franchise agreements as it relates to bad PR or egregious business practices).
    - deleted 8y ago
      [deleted]
    - orblivion 8y ago
      This story is (maybe after update?) dated March 1. The official statement is dated February 25. The tweet with the picture is dated Feb 23rd. Not sure which interpretation to take.
  - wanderr 8y ago
    I read it the same way as you, but on closer examination, if you look at the dates the letter was posted and the date of when the policy/acquisition is effective, it seems that Sonic corp did step in after the fact to acquire these and reinstate old policies. But it is amazing how unclear that was.
- kirykl 8y ago
  The source article linked to in the op says different “One anonymous source close to management stated: “Circleville, Lancaster, and Grove City crews have all walked out and quit after the franchise was bought out by corporate. The regional director, two district managers and four general managers have all been let go. All of which have been working for the company in management for 7+ years.” Sonics updated statement was that pay was actually not changed
  - toomuchtodo 8y ago
    I’d be interested in hearing that from someone whose pay was supposedly not changed, not Sonic PR.
deleted 8y ago
[deleted]
HaloZero 8y ago
I'm not sure about Ohio but I thought the rule was that you were obligated to pay out the difference if tips don't make them go to minimum wage. So was this policy from the new owners just a way to slightly reduce costs. From any tips the employees got? Do fast food workers get tips? It seems.... so cheap.
- techsupporter 8y ago
  > the rule was that you were obligated to pay out the difference if tips don't make them go to minimum wage That is the rule but, practically speaking, the fastest way to get permanently fired and more-or-less blackballed from ever working in foodservice again is to complain to management (and, worse, the government) about getting shorted on wages due to low tips. So few people do it if they need the job.
- cdurth 8y ago
  Ohioan here, this is correct, however i can't find an official gov source that explains the tip credit mentioned in the new 2019 wage poster [1] [1](https://www.com.ohio.gov/documents/dico_2019Minimumwageposter.pdf https://www.com.ohio.gov/documents/dico_2019Minimumwageposte...)
- cimmanom 8y ago
  If you were making $8 plus tips before, and now you’re making $4 plus tips or $8 (whichever is higher), then you’re still being paid $4 less per hour in any hour when you make at least $4 in tips. Because your first $4 of tips is going to bring your wage up to $8 instead of being on top of the $8. So it’s legal (if the employer actually holds to it) but it still screws over the employees and they still have every right to be pissed.
norswap 8y ago
I'm fascinated that the only source for the 4$/hour + tips is a tweet. As far as I can tell, that's it. In fact, the article doesn't even make the claim, just republishes the tweet. The Sonic statements says no wage have decreased, but this is not pointed out, fact-checked or commented on. Real good journalistic work. And to be honest, the strategy works. The fact that it (hopefully temporarily) cracked HN's frontpage is testament to that.
- massivecali 8y ago
  To be fair, this was published 20 minutes ago on a Friday after work for US. Not hard to get some magic promotion in that fashion.
- 0x8BADF00D 8y ago
  It looks like they reclassified their employees. The Ohio state min wage is $8.55/hr for employees, but if your employees can get tips, you only need to pay $4.30/hr.[0] [0]https://www.com.ohio.gov/documents/dico_2019Minimumwageposter.pdf https://www.com.ohio.gov/documents/dico_2019Minimumwageposte...
  - reboog711 8y ago
    As I understood, if an tipped employee's salary is below the minimum wage the employer must make up the difference; so the employee would still be making minimum wage.
    - cannonedhamster 8y ago
      HAHAHAHAHAHA. No, no employer does this. If you don't like it there's the door. Good luck proving you're not hiding money. You still have to pay taxes as if you were tipped as well. Tipping should just be outlawed.
      - karolg 8y ago
        I'm amazed that this fcked up system of obligatory tipping is still in use in US.
0x8BADF00D 8y ago
Pretty fucked up if you think about it. In order to circumvent minimum wage laws, they reclassified their employees as tipped employees, thus exempting them from having to pay state minimum wage. These types of practices are common in third world countries. It would seem the US has dropped from a developed nation to a developing one. This is also further proof that a minimum wage doesn’t work. The free market should decide the fair market value of a laborer.
- perfmode 8y ago
  I was with you until the last sentence. Furthermore, in the United States, what we have doesnt even resemble a free market.
- ohannanxis 8y ago
  now go learn how the minimum wage laws work with tips. it’s not a “get out of paying employees free” card
thelasthuman 8y ago
When the people have nothing left to lose, they will make the right choice and strike. The key is to give the working class the slightest bit of hope to cling onto. People will accept lots of abuse if they think there is still a chance of making it in life if they obey their masters.
gesman 8y ago
If this cut to $4/hr is indeed true and documented act by the management - they'll soon be using their savings to pay for own legal bills. However - better wait for the full and well-researched story to follow ...
foota 8y ago
It's not clear, but I think what happened may be: 1. Restaurant ownership changed 2. New owners set wages at min(4 + tips, 8) instead of 8 + tips. 3. Staff quit Technically, the minimum amount earned didn't change, but they'd be making less if they got any tips?
- tyingq 8y ago
  It hits them twice. Counting tips means higher taxes. It shouldn't, but the reality is tipped employees underreport if they can, mostly.

43 points by willart4food 8y ago

Proof collective action works. The PR was so bad, corporate stepped in and and exercised their right to forcibly acquire the locations in question back from the franchisee. The workers have been offered their jobs back as well. “Additionally, with the ownership change, employees may now have their paycheck direct deposited and general managers are now eligible for a new bonus program, among other benefits.”

anm89 8y ago
I was going to say, unfortunately this probably came at the personal expense of the employees who probably needed the work. Great to hear that this actually led to them getting better treatment.
NoblePublius 8y ago
That’s not how I read it. What I read is that the entire story is wrong, no one’s pay is cut, and the reason these signs were posted is unclear. What am I missing?
- toomuchtodo 8y ago
  What I read was that the franchisee who made the labor decision has lost their franchises, the ownership of which has been transferred to a preferred corporate partner. “Thank you for your inquiry about the about the eight Sonic Drive-Ins in the Columbus, Ohio market that have changed ownership from a franchisee to Sonic’s operating affiliate, SRI Holding Company (SRI) as of Monday, February 25.” It’s effectively a contractual death penalty for a franchisee (not an uncommon component of franchise agreements as it relates to bad PR or egregious business practices).
  - deleted 8y ago
    [deleted]
  - orblivion 8y ago
    This story is (maybe after update?) dated March 1. The official statement is dated February 25. The tweet with the picture is dated Feb 23rd. Not sure which interpretation to take.
- wanderr 8y ago
  I read it the same way as you, but on closer examination, if you look at the dates the letter was posted and the date of when the policy/acquisition is effective, it seems that Sonic corp did step in after the fact to acquire these and reinstate old policies. But it is amazing how unclear that was.
kirykl 8y ago
The source article linked to in the op says different “One anonymous source close to management stated: “Circleville, Lancaster, and Grove City crews have all walked out and quit after the franchise was bought out by corporate. The regional director, two district managers and four general managers have all been let go. All of which have been working for the company in management for 7+ years.” Sonics updated statement was that pay was actually not changed
- toomuchtodo 8y ago
  I’d be interested in hearing that from someone whose pay was supposedly not changed, not Sonic PR.

deleted 8y ago

[deleted]

HaloZero 8y ago

I'm not sure about Ohio but I thought the rule was that you were obligated to pay out the difference if tips don't make them go to minimum wage. So was this policy from the new owners just a way to slightly reduce costs. From any tips the employees got? Do fast food workers get tips? It seems.... so cheap.

techsupporter 8y ago
> the rule was that you were obligated to pay out the difference if tips don't make them go to minimum wage That is the rule but, practically speaking, the fastest way to get permanently fired and more-or-less blackballed from ever working in foodservice again is to complain to management (and, worse, the government) about getting shorted on wages due to low tips. So few people do it if they need the job.
cdurth 8y ago
Ohioan here, this is correct, however i can't find an official gov source that explains the tip credit mentioned in the new 2019 wage poster [1] [1](https://www.com.ohio.gov/documents/dico_2019Minimumwageposter.pdf https://www.com.ohio.gov/documents/dico_2019Minimumwageposte...)
cimmanom 8y ago
If you were making $8 plus tips before, and now you’re making $4 plus tips or $8 (whichever is higher), then you’re still being paid $4 less per hour in any hour when you make at least $4 in tips. Because your first $4 of tips is going to bring your wage up to $8 instead of being on top of the $8. So it’s legal (if the employer actually holds to it) but it still screws over the employees and they still have every right to be pissed.

norswap 8y ago

I'm fascinated that the only source for the 4$/hour + tips is a tweet. As far as I can tell, that's it. In fact, the article doesn't even make the claim, just republishes the tweet. The Sonic statements says no wage have decreased, but this is not pointed out, fact-checked or commented on. Real good journalistic work. And to be honest, the strategy works. The fact that it (hopefully temporarily) cracked HN's frontpage is testament to that.

massivecali 8y ago
To be fair, this was published 20 minutes ago on a Friday after work for US. Not hard to get some magic promotion in that fashion.
0x8BADF00D 8y ago
It looks like they reclassified their employees. The Ohio state min wage is $8.55/hr for employees, but if your employees can get tips, you only need to pay $4.30/hr.[0] [0]https://www.com.ohio.gov/documents/dico_2019Minimumwageposter.pdf https://www.com.ohio.gov/documents/dico_2019Minimumwageposte...
- reboog711 8y ago
  As I understood, if an tipped employee's salary is below the minimum wage the employer must make up the difference; so the employee would still be making minimum wage.
  - cannonedhamster 8y ago
    HAHAHAHAHAHA. No, no employer does this. If you don't like it there's the door. Good luck proving you're not hiding money. You still have to pay taxes as if you were tipped as well. Tipping should just be outlawed.
    - karolg 8y ago
      I'm amazed that this fcked up system of obligatory tipping is still in use in US.

0x8BADF00D 8y ago

Pretty fucked up if you think about it. In order to circumvent minimum wage laws, they reclassified their employees as tipped employees, thus exempting them from having to pay state minimum wage. These types of practices are common in third world countries. It would seem the US has dropped from a developed nation to a developing one. This is also further proof that a minimum wage doesn’t work. The free market should decide the fair market value of a laborer.

perfmode 8y ago
I was with you until the last sentence. Furthermore, in the United States, what we have doesnt even resemble a free market.
ohannanxis 8y ago
now go learn how the minimum wage laws work with tips. it’s not a “get out of paying employees free” card

thelasthuman 8y ago

When the people have nothing left to lose, they will make the right choice and strike. The key is to give the working class the slightest bit of hope to cling onto. People will accept lots of abuse if they think there is still a chance of making it in life if they obey their masters.

gesman 8y ago

If this cut to $4/hr is indeed true and documented act by the management - they'll soon be using their savings to pay for own legal bills. However - better wait for the full and well-researched story to follow ...

foota 8y ago

It's not clear, but I think what happened may be: 1. Restaurant ownership changed 2. New owners set wages at min(4 + tips, 8) instead of 8 + tips. 3. Staff quit Technically, the minimum amount earned didn't change, but they'd be making less if they got any tips?

tyingq 8y ago
It hits them twice. Counting tips means higher taxes. It shouldn't, but the reality is tipped employees underreport if they can, mostly.