Michelin Chef Risks it all to Raise Staff Wages

Chef Teague Moriarty of San Francisco’s Sons & Daughters is turning a crisis into opportunity and opening his restaurant with better pay and benefits for employees in what he says is a win-win situation.

People in hospitality have for years been calling for change. A better, fairer and more equitable system, they say, would see workers thrive in the jobs they love, and provide more security and better conditions. The claim was always that both the food and the restaurant experience would improve as a result, but as much as people demanded change, it rarely ever happened.

Now chef Teague Moriarty of one-Michelin-star restaurant Sons & Daughters in San Francisco is taking the opportunity afforded by the coronavirus crisis to implement the changes he has wanted to make for a long time.

Moriarty is significantly increasing his kitchen staffs’ wages. When the restaurant reopens, employees will earn a minimum of $65,000 per year, with salaries topping out at $90,000. Benefits will include two weeks’ paid vacation, unlimited sick pay and fully-paid health insurance, and staff will evenly split 50% of the profits. Tipping will be replaced with an 18% service charge, which will go toward salaries and benefits.

“It will be a little risky,” explains Moriarty. “Before this we had 15 employees and seven of them were management so they were on salary, then the other half were hourly, but they were on four or five dollars over minimum wage, everyone got a week of paid vacation and we paid 80% of everyone’s healthcare, so we were already moving in that direction.”

In restaurants, there never really seems like a good time to implement the change that’s needed. There are just too many demands on a restaurateur’s limited resources. Thin margins, debt and high staff turnover put restaurant businesses on an ever-spinning carousel from which it can be difficult to get off in order to effect long-term change. For Moriarty though, the coronavirus lockdown represented just such an opportunity. The first need, though, was ensuring he had a restaurant to reopen and the staff to run it.

“I wanted to keep my team together,” he says. “A lot of restaurants in the area just shut down for two to three months and put everyone on furlough. But for me, I wanted to keep my management and everyone else on payroll as long as I could. If you just fire everybody, you’re going to have a much bigger task when you reopen. It’s effectively like starting all over again. Keeping the brain power in the restaurant was a big priority.”

Even before the coronavirus hit, San Francisco’s restaurants had been struggling in a city that in recent years had changed a great deal. A booming tech sector had seen the city awash with money, but that meant property prices were out of reach for ordinary working people, and many restaurants just couldn’t find and hold onto good staff.

“San Francisco is such an expensive city to live in and the tech thing in the last five or 10 years has made it even more so. So I think everyone is struggling to find people and pay a living wage in the Bay Area, it’s just really, really challenging,” says Moriarty.

“A lot of restaurants were closing, but there were also a lot opening too. I think we were seeing a lot of restaurants about five years ago who were just doing more tasting menus, at the high-end level. It was just a very saturated market, especially at the mid-to-upper levels.”

In order to attract the right kind of staff, restaurants should be attractive places to work. So putting in place the kind of fair business practices that will see more buy-in from staff might turn out to be a very smart move. But for Moriarty, it’s also about doing the right thing.

“For me there are two main thought processes. The first is definitely a moral one. Everyone in the industry has been taking about inequality and wanting more fairness. I grew up comfortably middle class, but listening to punk rock and buying into that ideal of wanting more equity in the world.

“That was a big part of me, wanting to put my money where my thoughts were at. Everyone talks a good game, but it’s another thing when you make that sacrifice personally.

“I shouldn’t be making three time as much as my lowest-paid employee. I should be making 30 or 40% more than my lowest paid employee. So I just thought, let’s put everyone’s salary in this $30,000 range and then with profit it will be equal, so we’ll all get a ten or twenty thousand dollar bonus every year instead of just me getting a seventy thousand dollar bonus and nobody else getting anything.”

The other part of it came from Moriarty’s realisation a couple of weeks into lockdown that he would be really lucky to have a job in his own restaurant in two years’ time. So he began thinking about what systems he could put in place to ensure not only the best chance of survival, but of thriving and getting better.

“How do we create a win-win situation? For years we’ve been sort of half-heartedly thinking about pursuing two [Michelin] stars, but at the same time, not necessarily accepting that we would need to take out tables to be able to focus on the food and bring it to a higher level.