Restaurant Owners and Staff Are About to Go Broke Because of Coronavirus: 'The Abyss We're Going Into Is the Scary Part'

BROOKLYN — Cooks and servers across the country are facing lost income and even unemployment as the restaurants they work for are either keeping them on very short-term payroll, or essentially firing them. And with their restaurants closed indefinitely by coronavirus, owners describe these decisions as agonizing but unavoidable.

At least 12 states — New York, New Jersey, Connecticut, Ohio, Washington, California, Illinois, Massachusetts, Pennsylvania, Indiana, Kentucky — have ordered bars and restaurants to close down or restrict service. In some cases, cities or states are still allowing take-out or delivery, but some restaurant owners say they can’t afford to stay open for that. The crisis has left the hundreds of thousands of people who work in the service industry and depend on tips — often living paycheck to paycheck without job protections — in limbo. And it could be financially crushing to small restaurant owners, who will have to pay rent with no money coming in.

The goal of the shutdown is to reduce the spread of COVID-19, the disease caused by the coronavirus. As of Tuesday morning, there were more than 4,600 confirmed cases in the U.S., and more than 79 people dead. Many companies in hard-hit areas have had their employees working from home for days or even weeks, and there’s widespread concern about job and income security as the economy falters. But those working in the service industry and gig economy are, without question, going to be devastated.

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“As a cook and a chef, it’s already an industry that you’ve always thought, ‘you can go anywhere to cook’,” said Rodolfo Carboni, who works as a cook at 701West in Manhattan, an upscale restaurant near Times Square. “Now with this situation, what else could we do? Nothing. We don’t have the luxury to work from home. My anxiety is through the roof.”

Carboni said that they are used to getting a big wave of diners before and after going to the theater on Broadway, and so when Broadway went dark last week under Gov. Andrew Cuomo’s orders, their customers started to drop off.

But before Cuomo’s order to close down bars and restaurants, Carboni said he was wrestling with his own feelings about keeping 701West open as the crisis started worsening.

“I felt an extreme guilt in a sense, because the way that the current testing situation is, there’s no ease of mind that someone is clean, as much as we wash our hands and follow all procedures,” said Carboni. “Going into work every day, cooking for people — there’s a real sense of anxiety and guilt that I’m possibly doing harm, because I’m in charge of interacting with people’s food.”

“I think the right thing to do is close the restaurants,” he added. “But the abyss we’re going into is the scary part.”

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Tyler Kord, 42, who owns No. 7 restaurant in Brooklyn and No7 sub. shops across New York, closed down his restaurants and sandwich shops on Sunday afternoon. “Last week, it became clear we needed to stay open, so we could pay our staff,” said Kord. “Then public sentiment seemed to turn, to be that of like, don’t go to restaurants or bars, you’re endangering us. It started to feel like I was doing this to help, and now I feel even worse. Our sales were going to reflect that sentiment, so we made the decision to close.”

When Kord closed, he also had to effectively lay off his staff — most of whom are considered family and have worked at his restaurants for years.

“The most scary thing is that I don’t know what’s going to happen to my staff. There’s still food at the restaurant, and I made it clear to them that if they need anything — anything I can do to help them find money or get them food — I’ll do it,” Kord said.

“They’re all trying to sign up for unemployment,” he added. “I let them go with the assumption that they’re completely welcome back with open arms. That was all we could do.”

Kord said that keeping the shops open, at this point, for delivery or take-out just wasn’t a sustainable option — and he’s worried about digging himself into a hole that will make it harder to reopen later down the line. It would also entail finding the right delivery company, some of who are talking about possibly lowering their fees.

“I can’t imagine that business will be enough to make it worth it, because everyone is doing that,” said Kord. “How much are we really gonna make doing that? Grocery stores are still crazy, people are buying tons of food. They’re gonna have to eat it.”

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Giovanni Gentile, whose Italian restaurant Spaghetti Incident on the Lower East Side is closing down apart from takeout and deliveries until further notice, also laid off his staff.

“I’m a very optimistic guy, and my thinking even now, is that when this thing passes, we’ll go back to the normal life we knew,” said Gentile, 37. “But for the next couple of months it’s going to be a very different life. Everything needs to change, and I totally get that. And we need to adapt to the new situation as fast as possible, to get the best out of it.”

Gentile said he’s planning to email his landlord to ask for understanding and cooperation if he can’t pay his full April 1 rent.

Autumn Stanford, 40, owns two businesses in Brooklyn, a wine bar called Tailfeather (which is going to pivot to delivery and takeout for now) and the Brooklyn Kolache Co., which closed on Monday. “Deliveries make us like 3% of our sales,” said Stanford.

Over the weekend she was wrestling with what to tell her staff — whether to fire them, so that they could qualify for unemployment, or somehow keep them on the payroll.

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For now, she opted for the latter, and plans to use their accrued paid time off to cover their next paychecks. “Telling them we’re closing without a plan besides their accrued paid sick leave has been hard,” said Stanford. It’s also not a long-term solution, especially given that New York City and state officials have warned this could drag on for weeks, even months.

As far as measures that the state could take to soften the blow for restaurant owners, Kord, Gentile and Stanford said that easing payroll taxes, sales taxes, could also help them make ends meet during this time — including helping pay rent and utilities on their inactive restaurants.

The U.S. Chamber of Congress is also calling on Congress to nix federal payroll taxes to help businesses afloat through coronavirus, an idea that President Donald Trump has signalled support for.

Cover: A restaurant sits closed in the early evening in Brooklyn after a decree that all bars and restaurants shutdown by 8 pm in New York City as much of the nation slows and takes extra precautions due to the continued spreading of the coronavirus on March 16, 2020 in New York City. (Photo by Spencer Platt/Getty Images)