Restaurant workers put under financial strain due to lockdownWith restaurants being shuttered for more than a month, many workers have lost their income.
Restaurant cook Dipak Khadka was expecting his bank to notify him that his salary had been deposited into his account as it used to do every month. But the notification never arrived.
Khadka, who has been working at ND’s Café and Restaurant at Mahabouddha for the past 16 years, did not think that staff salaries would be stopped because the place has been closed for the past month due to the virus lockdown.
The 40-year-old cook is the sole breadwinner for his family of five, and he has to support his parents in his home village in Sindhuli too. He says he needs the money to feed them, and market prices have spiked due to supply chain disruptions.
Khadka's employer had told him a few weeks ago that all workers would get their pay. But he has not heard from him since then, and he dares not contact him again for fear of losing his job.
According to him, the 52 workers at the restaurant have not received their salary for the past month. The company is under financial strain, but it should be able to pay the staff for a month or two despite being closed for a month, Khadka said.
“It has become tough to survive in Kathmandu,” he said. His landlord has been asking for last month's rent for his apartment, and he has been managing by dipping into his savings and borrowing from friends.
With restaurants being shuttered for more than a month, many workers have lost their income which has put them in great difficulty.
"Even before the lockdown, business had started shrinking with people refraining from eating out due to pandemic fears," said Mohit Acharya, owner of Bricks Café, Kupondol.
Pramod Kumar Jaiswal, immediate past president of the Restaurant and Bar Association of Nepal, said that turnover had dropped to almost zero with 100 percent loss.
There are around 2,500 standard restaurants in Kathmandu, Pokhara and Sauraha, according to the association. There is no authentic data, but these establishments are estimated to have a combined investment of Rs25 billion, officials said.
As per the association, 60 percent of the restaurants have a local client base while tourists make up most of the customers at the rest.
Restaurants that depend on tourism will take a long time to rebound with less tourist movement due to the coronavirus, Jaiswal said. It will be some time before locals start dining out wholeheartedly because nothing will remain like before due to the pandemic, so there will be a long-term loss, he added.
The restaurant sector employs 60,000 people and pays Rs140-150 million in salaries each month, said Jaiswal.
According to him, 25-30 percent of the restaurants are using loan capital totalling Rs4-5 billion, and almost all of them are situated on rented premises.
Out of the total revenue, 40 percent is spent on daily purchases, 15-20 percent on staff salaries and 10 percent on rent. This leaves a profit margin of around 10 percent, he said.
Jaiswal, who owns Mela Restaurant and Bar at Lainchaur, said he would pay the salaries for the past month as paid leave.
Acharya has paid last month's salaries, but he says he has not decided what to do from next month. The association has not reached any decision regarding the salaries of restaurant workers. Talks are being held with the government and trade unions, he added.
"Restaurants which have been operating for years are unable to manage the salaries of workers for some months, and that too in a situation like this," said Mukti Dahal, central general secretary of the All Nepal Hotel, Casino and Restaurant Workers Union.
“Though some restaurants have decided to pay salaries in full for last month, others said they would be able to pay only half of the salaries,” he said.
"As many workers are receiving minimum wages, halving the salary will impact the lives of thousands of workers," he said. “We are waiting for the government's decision on the matter,” he added.