Amanda Kriener considers herself lucky, even though she was walking directly above the explosion that triggered the fire at M’s Pub on Jan. 9.
“It’s a movie that keeps replaying in your head,” Kriener said — the boom, the floorboards pushing up, the fireball visible beneath her feet, the picture windows blasting outward, the flames shooting up from a stairwell just outside the front door, people quickly exiting the building.
Like the others in the Old Market that Saturday afternoon, she survived. Like many of the fire-displaced employees, she has found other work, as a server at the nearby Le Bouillon restaurant.
And like many, her wages were interrupted by the fire. She hasn’t heard whether insurance coverage will replace her lost income, and she’s saving to finish her college degree starting in the fall.
Even if insurance provides some relief, it likely wouldn’t be much, because Kriener — like scores of other workers from M’s Pub, Market House and other restaurants affected by the fire — relies on tips for most of her income.
And business interruption insurance typically doesn’t cover tips.
The coverage is intended to keep businesses afloat until they can resume normal operations. Coverage can apply to salaries and hourly wages paid by businesses. For tipped workers in Nebraska, that’s $2.13 an hour.
M’s co-owner Ron Samuelson declined to comment on his insurance, saying he is still figuring out what it will cover.
Market House co-owner Nick Bartholomew said his Travelers Insurance policy is designed to cover salaries, including a year’s wages for the chef and manager, but not tips received by about 15 of his former staff.
That’s why he has helped his staff find other jobs, and why fundraisers are aimed at helping displaced servers, hosts and others who rely on tips for most of their income. A workers’ assistance fund is open at youcaring.org, under “Old Market.”
“If you’re lucky enough to be a server who kept a record of their income each night and had that declaration to back up the record, I believe that insurance companies would be much more willing to work with that,” Bartholomew said. “But most of the time the record doesn’t exist, so they cannot justify covering what a tip employee makes beyond $2.13.”
But maybe there’s hope.
Drew Olson, a director with the forensic accounting firm BDO Consulting in Chicago, said businesses can include “reasonable” earnings — say, $80 a night — by their tip-dependent employees when they file information for a claim on their interruption insurance.
The argument in favor of covering tip income is that being able to pay a wage will keep those staff members available when the business reopens, Olson said. That would save money in the long run over having to hire and train new employees because the original employees left for other jobs.
Language in most policies lets a business keep its staff for a number of days, and servers getting only $2.13 an hour from insurance would have to leave quickly, he said. “You can show that this is what you need to pay them, so they’re around when you reopen.”
Reopening quickly can save the insurance company money, too, by reducing total claims, Olson said.
“That’s the argument you need to make,” he said.
Will the argument succeed?
“I can’t see that flying with an insurance company,” said Loretta Worters, a spokeswoman for the Insurance Information Institute.
Business interruption insurance is intended to cover business expenses and provide income to keep the business alive until it reopens, and tips aren’t an expense of the business.
Rather, Worters said, tips are a voluntary payment from the customer to the employee.
“Tips are not documented,” she said. “It’s what they’re making on their own depending on the service they provide to their customers. It’s discretionary income. It has no bearing on what the payroll is.”
Some business interruption policies don’t cover employee salaries at all, or only a few key people who must be kept on payroll for the business to resume operations, said Chris Hackett, a director with the Property Casualty Insurers Association of America in Chicago.
Because businesses’ needs are so varied, he said, owners usually customize their policies, talking with their agents or brokers to balance the premiums they can afford with the coverage they need, he said.
If a business owner wanted to pay for coverage that would include employee tips, that would be a matter to discuss with an insurance agent or broker, he said. If there is a claim, any payment for tips would be clear.
“If the policy says they’re going to cover your 15 employees for their base salary, that would not include tips or bonuses or anything else that might be above and beyond that,” he said.
Workers displaced by the M’s Pub fire may be eligible for state unemployment and dislocated worker benefits.
Unemployment benefits are based on quarterly wage reports filed by employers, Nebraska Labor Commissioner John H. Albin said. Employees should report tips to their employers, who then report wage information to the Internal Revenue Service.
Tips not reported for tax purposes wouldn’t count toward unemployment benefits, Albin said.
Bartholomew, the Market House co-owner, said his experience in business “showed me that insurance is a valuable, valuable thing.”
He specifically included wage protection for key employees in the insurance policy because they are important to the restaurant’s future. For those not covered, he worked with other restaurants to help them find new jobs.
He’s also supporting efforts to raise money to benefit workers who lost income because of the fire and hopes to reopen the restaurant at the same location within a year.
Amanda Kriener, the former M’s server, said she’s not seriously concerned about her lost income and is more focused on learning about her new restaurant and paying bills.
“I’m not a greedy person,” she said. “I don’t look for handouts. I’m just fortunate to be out with my life and able to go on and continue working.
“The sad part is we had thoroughly enjoyed working with each other (at M’s). It was kind of like being in a family and having guests come over for dinner and entertaining them.”
Maybe someday, she said, that family and its guests will come together, and guests at M’s will be leaving tips again.
Contact the writer: 402-444-1080, email@example.com