A 67-year-old Seattle drive-in chain is raising its minimum wage to $19 an hour and paying more overtime as it tries to triple its usual hiring

Server at a restaurant in California
A server clears a table as patrons dine outdoors at Gloria’s Cocina Mexicana restaurant in California on Saturday, Dec. 5, 2020. Watchara Phomicinda/MediaNews Group/The Press-Enterprise/Getty Images
  • Seattle chain Dick’s Drive-In is raising its minimum wage to $US19 ($AU26) an hour amid a labor shortage.
  • It’s also easing eligibility for childcare and paying overtime for work exceeding 32 hours a week.
  • “Our jobs are challenging and physically demanding,” Dick’s President Jasmine Donovan said.
  • See more stories on Insider’s business page.

A well-known fast food chain in Seattle is raising its minimum wage to attract and retain workers amid a critical labor shortage sweeping the industry.

Dick’s Drive-In said in a Facebook post on Wednesday that it will hike its minimum wage to $US19 ($AU26) an hour starting Monday, up from $US18 ($AU25) an hour. Employees will be paid $US20 ($AU27) an hour after they pass their first skills test, which Dick’s says can be done in an average of 12 weeks. This means they’ll see a wage bump of $US1 ($AU1) an hour after passing the test; previously, their wages increased by 25 cents ($0.34) more per hour when they passed. With the changes, non-managerial staff at Dick’s can make up to $US21.75 ($AU30) per hour.

“I know from personal experience how hard our employees work every day,” Dick’s President Jasmine Donovan wrote in the announcement. “Our jobs are challenging and physically demanding.”

Through the rest of the year, Dick’s will also pay out overtime for workers putting in more than 32 hours a week. Previously, the chain paid overtime for working more than eight hours a day or more than 40 hours a week.

“A lot of our shifts are short-staffed,” Donovan told Insider. “Our employees are having to work even harder than they normally do to continue serving our customers.”

Besides those changes, Dick’s is also reducing its eligibility requirements for employees to access funds available for childcare and scholarships. The chain previously required staff to work for at least six months before they could take advantage of this benefit. Now, workers are eligible as soon as they pass their first skills test.

Donovan told Insider it’s been “very difficult” to find workers.

“Labor is a major challenge right now,” she said.

Typically, Dick’s is looking to hire one to two workers at any given time; across all of its locations, this comes out to 14 workers maximum. Now, Dick’s needs to hire about 50 workers, or more than three times as many as usual.

“We were hoping to see more applicants,” she said, noting that applications have fallen since the summer. “We had kind of a big number of applicants in July, although for a lot of the people who were applying, either what they were looking for in a job didn’t really match what we have so it wasn’t always a good fit, or when we called them in for an interview, they wouldn’t show up.”

Until Dick’s reaches more normal staffing levels, a handful of its locations will be closing at 8pm, six hours earlier than their usual 2am close.

The chain’s bump in pay and benefits implicitly counters a popular talking point among those opposed to raising wages. Some people on that side of the debate say fast food jobs usually don’t pay well because they’re meant to be short-term gigs, not long-term professions.

“We do not expect anyone to work for us their entire career,” Donovan said in the announcement. “Our hope is that employees work for us for a few years, use the experience and benefits to grow personally and professionally and move on to pursue something they are passionate about. It is our privilege to be a part of that journey.”

Other restaurants have been hit with similar worker shortages in the tight labor market. Many have had to shut down after losing staff. A lot of businesses have also struggled to rein in ghosting-coasting, a practice in which workers quickly go from one gig to the next, quitting without explanation, as Insider’s Dominick Reuter reports.