Do long term benefits outweigh the added costs of high turnover in the restaurant business?
The Laughing Planet Cafe is a fast casual restaurant chain with 14 locations throughout Oregon and Nevada. The company is made up of 280 employees who spend their time at work making burritos, smoothies and salads. And now in an extremely rare move in the restaurant business, all of the employees of the Laughing Planet Cafe will have the benefit of having three months of paid parental leave after they have a baby.
The decision was made in late January by Franz Speilvogel, a chief executive at the company, after a discussion with a pregnant store manager who voiced her concerns about not being able to take maternity leave.
"She's entering her final trimester, and she talked about the circumstances of being an employee in my company and what she's faced with. I told her, let me think about it and get back to you," Speilvogel said.
It wasn't until a few days later when President Obama announced that federal employees would receive six weeks of paid sick leave and that the plan was to push Congress to extend those rights to everyone else, that made him ultimately decide on extending paid parental benefits to employees.
Only 6% of service workers in the nation receive any sort of paid family leave according to the U.S. Bureau of Labor Statistics. Full-time workers are offered 12 weeks of unpaid leave under the Federal Family and Medical Act, however, part time workers do not receive this benefit.
Laughing Planet Cafe's new policy will cover mothers, fathers and adoptive parents. Employees will be paid their full salary. If they are part time employees, they will still be covered by the same policy, however, they will be paid the average of what they've earned in the past six months.
"It wasn't a business decision to do this, it was a human decision. But as a business owner, I also think it'll pay off down the road." - Franz Speilvogel
Speilvogel and his executive team examined the costs of paying employees for six weeks of leave, eight weeks of leave before eventually settling on three months. By reviewing the types of people who are employed by Laughing Planet, he realized that not many of them had children. He admitted that working in the service industry and raising a family is a challenging feat due to the typical work schedule.
According to Speilvogel, it costs approximately $5,000 in wages and time to train a new employee. He did the math. If 10 people were out on parental leave simultaneously, he could easily have other employees temporarily cover their duties while the employees on leave would be paid for 12 weeks and spend less than the $50,000 it would cost to hire replacements.
An added benefit of providing this type of coverage to employees is their job satisfaction. Speilvogel believes that having parental leave in place will lead to healthier parents and children. He also believes that employees will be less likely to leave the company because of this offering. It appears he may be right; a 2011 study of California's paid-leave law found that when low-wage workers were given access to paid leave, 83% returned to the same company compared to 74% who did not have paid leave.
What are your thoughts? Should more restaurant employers offer paid leave? Would having paid leave help alleviate some of the pressures associated with parenting and raising a family? Would having benefits like this make you more likely to stay at one company? Let us know in the comment box below.