Shareholder groups at Dine Brands Global Inc. and Denny’s Corp. have submitted resolutions to both companies calling for them to analyze the impact of raising wages for all restaurant workers and consider doing away with the tip credit.
The shareholder resolutions ask the boards of Glendale, Calif.-based Dine Brands, parent to the Applebee’s Neighborhood Grill and Bar and IHOP, and Spartanburg, S.C.-based Denny’s, the family-dining brand, “to prepare and make publicly available analysis of the feasibility of increasing tipped workers starting wages to a full minimum wage, per state and federal levels, with tips on top,” according to representatives.
The shareholder resolutions were submitted by the Benedictine Sisters of Mount St. Scholastica and the Sisters of Charity of the Blessed Virgin Mary, and organized by the Interfaith Center on Corporate Responsibility. One Fair Wage, a national nonprofit that advocates on behalf of restaurant workers earning a tipped subminimum wage, has endorsed the shareholder actions, a spokesperson said.
The federal minimum wage remains at $7.25 an hour, with many states raising that floor to higher rates. Many states allow employers to take a so-called “tip credit,” which allows them to include gratuities in minimum wage calculations. They allow an employer to credit a portion of an employee's tips toward the employer's obligation to pay minimum wage.
At Denny’s, the Benedictine Sisters of Mount St. Scholastica in Atchinson, Kan., representing more than $2,000 in shareholder value, explained that “As stockholders, we are concerned that the payment of a subminimum wage contributes to ongoing economic inequities and hinders hiring and retention efforts that negative impact long-term success and growth, creating reputation and financial risks.
At Dine Brands, the Sisters of Charity of the Blessed Virgin Mary, representing more than $2,000 in shareholder value, said that “As shareholders, we are concerned that the misalignment between Dine’s stated goals in its annual reporting and the payment of a subminimum wage creates a significant reputation and financial risk to our company. Maintaining low wages contributes to ongoing economic inequity and hinders hiring and retention efforts that in turn negatively impact long-term success and growth.”
Nadira Narine, senior program director at Interfaith Center on Corporate Responsibility, said in a statement: “The pandemic brought home the serious risks frontline workers face and highlighted the effects a lack of worker protections, including a livable wage, can have on business productivity and the economy.
“With more than seven of 10 restaurant operators reporting a staffing shortage and half citing employee recruitment and retention as their most pressing challenge for 2022,” Narine said, “Dine Brands and Denny’s board should view robust oversight of human capital management as mission-critical.”
Representatives for the two shareholder groups said the boards of both Denny’s and Dine Brands had urged shareholders to oppose the resolutions.
Emails to the companies for comment had not been returned by press time.
Dine Brands annual meeting of shareholders will be in person in New York City on May 12. Denny’s annual general meeting of shareholders will be a virtual event on May 18.
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