The food service industry has a major problem: though it employs over 11.3 million people in America (the nation's largest segment of employment after healthcare), it is historically one of the lowest-paying industries and offers little-to-no benefits to employees. In fact, as of 2017, about a quarter of all food service employees lack health insurance, with an additional 18 percent on Medicaid.
For Elizabeth Tilton, the founder and CEO of Oyster Sunday, it’s a problem she knows intimately, and one she wants to solve.
Tilton spent years working her way through kitchens—first as a pastry chef, then in front-of-house roles, and eventually in branding/marketing at the head office of Momofuku restaurant group. “I got to understand, seeing this corporate office, what it did to service restaurants”, says Tilton. It acted as a central support system with dedicated HR, accounting, marketing and more. It led her to wonder, why can't this structure roll out and service restaurants coast to coast? Can individual restaurants also get this sort of centralized support?
In 2019, she launched Oyster Sunday to be that corporate office for independent restaurants and food brands nationwide. Beyond assisting clients with HR, accounting, data management, and branding, Tilton wanted to include medical coverage too. "Our ambition is to reimagine what the restaurant group looks like," she says of her company whose vision is to help smaller businesses increase purchasing power through an economy of scale on everything from data management to benefits and even healthcare.
In the months leading up to her launch, Tilton began calling Professional Employer Organizations (PEOs) and healthcare brokers to see what was even possible. "If we were to come with 20 restaurants, could you pre-negotiate a PEO model on behalf of all of us for preferred-rate healthcare?" Tilton asked. She wanted to see if Oyster Sunday could enter a joint-employment relationship with a group of restaurants as a way to leverage the combined size and negotiate for better healthcare rates.
It quickly became clear that there were simply too many loopholes to navigate and obstacles to overcome for the plan to work. For example, Oyster Sunday would have to own 51% of each restaurant for them to qualify. "Needless to say, we're not going to resolve the issues in the United States of medical insurance," Tilton admits. But that doesn't mean they couldn't do something.
Oyster Sunday officially launched in October of 2019, but a benefits and healthcare package was not yet available. When the global pandemic hit a few months later, Tilton and her team put the idea on the backburner while they scrambled to keep their own company alive along with the small businesses they were supporting. As healthcare and labor issues started becoming more of the hospitality industry's focus in late 2020, "we started turning that engine back" Tilton says of a benefits package.
In September 2021, after over a year of research and planning, Oyster Sunday officially debuted the Oyster Sunday Benefits Program. The platform is a more scaled-back version of the original idea, but still offers members access to preventive care, work-out classes, mental health services, and other benefits. And while access to the program is free for clients of Oyster Sunday, it is also available to operators who are not clients for a monthly subscription of about $36 an employee a year.
The Oyster Sunday Benefits Program is a way of "dealing with the problems at hand that simply can't wait for a longer-term systemic change," says Eli Wilson, Assistant Professor of Sociology at the University of New Mexico and author of the book Front of the House, Back of the House: Race and Inequality in the Lives of Restaurant Workers. Shy of an employee healthcare mandate placed on restaurant owners or even some sort of public-option for coverage, it's up to individual industry players to step up and help find a solution. "This is where we're at with a degree of urgency for the need for health care," continues Wilson, because of the "sustained lack of political clout to make change either in the industry or at a legal level."
For most in the industry, the idea of having access to any sort of healthcare coverage or benefits is strange. “It’s so foreign to me," says Lea Madda, a bartender in both Los Angeles and Boston. "After having worked in the industry for years without those options, I just can't imagine not worrying about it anymore."
"The one thing that we went after first is preventative care—that was our number one vision," Tilton explains. Through the Oyster Sunday Benefits Program, users have access to Sesame, which provides discounted rates pre-negotiated directly with physicians, and Clear, which provides a similar arrangement for dental cleanings and other routine dental care. Soon, users will also have access to Spot. For about $20 a month, Spot covers $20,000 in catastrophic insurance. Yet, Tilton is careful to specify that the Benefits Program is not primary coverage, nor a substitution for traditional insurance. “We give employees that may not have health insurance, or employees that may be under insured, access to additional care."
For Greg Ryan, owner and operator of Bar Le Cote and Bell's along California's Central Coast, signing on to the Benefits Program was a no-brainer. "It is free for us to implement as it is within our contract with [Oyster Sunday], and they have more buying power than I would in trying to negotiate each resource independently," Ryan says. As a small restaurant group, he notes that he simply doesn't "have the bandwidth to work on tertiary packages like this."
But while restaurateurs like Ryan are trying to do what's right for their staff, Wilson worries that others might use this platform to take advantage of desperate employees. “Opportunistic employers might try to use this as a substitute for providing more costly forms of health care," he explains, which would create an either-or situation for their employees: either you accept the Oyster Sunday benefits package in lieu of full healthcare coverage, or you get nothing at all. Moreover, the very businesses who are clients of Oyster Sunday are already higher-end restaurants and vendors that can afford such a service.
"For that reason, I would be very skeptical whether a program like this can touch some of those hard to reach mom-and-pop restaurants that are really where some of the worst exploitation happens," Wilson continues.
Tilton pushes back here, citing that access to the program for owner/operators who are not clients of Oyster Sunday is relatively cheap. The $36 per employee? "That nets out to 2.4 hours of a $15 minimum wage in California for an employee to access the program for the entire year," Tilton says. Or, more simply, just $3 a month per employee. And Tilton is planning to give individuals access apart from their employers by 2022, "we just need to get the program in place and make sure everything is working first."
Of course, even if such a program starts by targeting employees at restaurants with more resources, it sets an example for others across the industry. "We know that many workers circulate to different workplaces," says Wilson. "The more workers that are exposed to this norm of provision coming from their employer in terms of healthcare benefit, I think that's a good thing."
As the benefits program rolls out to a wider pool of workers "we'll have a lot more negotiating power to keep giving more [benefits] and to be more generous" with pricing and discounts, Tilton says, though she notes that her team's focus for now will be getting the word out. She also knows full well that the Benefits Program will change and evolve as time goes on. "It's not a stagnant product, it's going to change all the time," Tilton concludes. "It will be an iterative process as we'll keep trying to make it better."
If Oyster Sunday's program falls short of full medical coverage or a retirement plan, it is still a noble experiment and a much needed band-aid for food service workers currently without either. The larger issues of the American healthcare system will ultimately require government intervention to solve, but for now, Oyster Sunday is stepping up to fill the gap.