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Chipotle Mexican Grill is raising wages to an average of $15 an hour by June and offering cash referrals to employees as the chain seeks 20,000 workers

Business Insider logo Business Insider 5/10/2021 nluna@businessinsider.com (Nancy Luna)
a person wearing a mask: Chipotle Mexican Grill is raising its average wage to $15 an hour. Chipotle © Chipotle Chipotle Mexican Grill is raising its average wage to $15 an hour. Chipotle
  • Chipotle said workers are needed for busier stores, as well as 200 new restaurants planned in 2021.
  • Chipotle is raising wages to a range of $11 to $18 an hour for US crew members and managers.
  • The industry added 187,000 jobs in April. But hiring is not happening fast enough for chains.
  • See more stories on Insider's business page.

In April, restaurants and bars added 187,000 new jobs, but the hiring gains are not happening fast enough for most chains scrambling to fill positions as coronavirus restrictions ease around the US.

The hiring crunch is forcing restaurant companies to raise wages to get applicants in the door even though many of these chains lobbied against raising the federal minimum wage to $15 an hour during Congressional stimulus plan talks earlier this year.

The latest chain to make a big move on wages is Chipotle Mexican Grill.

On Monday, the Newport Beach, California, based chain announced plans to increase hourly wages for hundreds of employees, bringing the average pay to about $15 an hour. That's $2 more an hour than the chain's current average of $13 an hour, Chipotle told Insider.

Read More: This tech startup allows fast-food companies facing a tight labor market to hire virtual cashiers to take drive-thru orders via a Zoom-style setup

Chipotle seeks to hire 20,000 employees across the US to fill stores experiencing peak traffic, as well as to fill jobs for 200 new restaurants expected to open this year. Chipotle said hourly pay now ranges from $11 to $18 an hour for US crew members, as well as hourly and salaried managers.

"We are seeing increased staffing needs as our business continues to grow," the company said in an email statement to Insider.

Employees, both new and existing workers, will start seeing bumps in their paychecks over the next few weeks. The wage increases are expected to be complete by June.

text, letter: A Chipotle in Orange, California displays hiring materials on a table. Nancy Luna/Insider © Nancy Luna/Insider A Chipotle in Orange, California displays hiring materials on a table. Nancy Luna/Insider

Throughout the pandemic, many chains pared-down staffing when the pandemic limited service to takeout, delivery, and drive-thru orders.

But as the economy bounces back and capacity restrictions lift for indoor dining, restaurants are finding it hard to hire more staff to accommodate the uptick in foot traffic.

During Chiptole's latest quarterly earnings call, CEO Brian Niccol said the chain's dining rooms are getting busy again as the "economy comes back in a big way."

"With that, obviously, we are quick to want to staff up our restaurants accordingly to be in sync with where our business is growing," he said. "The positive is it came back really fast in March. The negative in that is, you got to play a little bit of catch up with the staffing."

Read More: How Starbucks is defying the labor shortage crisis with transformative perks, not cash teasers like McDonald's

Other chains are also playing catch up.

To sway applicants, Taco Bell is throwing hiring parties. A McDonald's operator in Florida is offering job candidates a $50 cash teaser to get them in the door.

Unable to fill shifts, franchisees of McDonald's and Dunkin' have told Insider that they have refrained from reopening dining rooms in part because it's difficult to find enough employees to staff their restaurants. Some restaurants are also reducing store hours.

Besides raising wages, Chipotle is offering referral bonuses to employees - $200 for crew members and $750 for apprentices or general managers.

graphical user interface: Chipotle is hosting a virtual job fair on Discord. Chipotle © Chipotle Chipotle is hosting a virtual job fair on Discord. Chipotle

To support the hiring push, Chipotle will launch a virtual career fair on Discord, a group-chatting app that has grown in popularity during the pandemic. During the fair, held May 13 from 10 a.m. to 1 p.m. Pacific time, potential applicants can learn about various Chipotle benefits.

"Chipotle is committed to providing industry-leading benefits and accelerated growth opportunities, and we hope to attract even more talent by showcasing the potential income that can be achieved in a few short years," Marissa Andrada, chief diversity, inclusion, and people officer, said in a statement.

Chipotle is widely known for its perks such as bonus programs for crew members, debt-free degrees, and tuition reimbursement. Other chains that offer college tuition perks include Starbucks and Noodles & Company.

Still, Chipotle has come under fire recently for allegedly violating worker labor laws in New York City. The city sued Chipotle last month for allegedly violating the city's fair workweek laws and claims the chain owes workers more than $150 million.

Laurie Schalow, chief corporate affairs officer for Chipotle, called the suit a "dramatic overreach."

"Chipotle will vigorously defend itself," she previously told Insider. "Chipotle remains committed to its employees and their right to a fair, just, and humane work environment that provides opportunities to all."

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