Meritage employees still waiting for wages despite loan

GRAND RAPIDS, Mich. (WOOD) — Employees from a Grand Rapids-based company that was granted $29 million in paycheck protection say they haven’t been paid in almost two months.

Stephanie Chavez, who works at a Meritage Hospitality Group Inc. restaurant, saw News 8’s report about the company being awarded millions in taxpayer dollars meant to save small businesses. She said it added insult to injury while she struggles to pay bills.

“When I saw your article, I instantly was upset,” Chavez said.

She is a server at Freighters in Port Huron on the east side of the state, one of the many restaurants owned by Meritage.

The majority of its restaurants are Wendy’s, which are still open and making money. Despite that, Meritage was granted $29.1 million from the Paycheck Protection Program, a federal loan initiative designed to keep workers on payroll during the closures aimed at slowing the spread of coronavirus.

Chavez, a single mom of three, said she has not seen any of that money: “Not one penny.”

“I’m worried because I don’t know when we are going to go back to work,” she said

After Freighters was forced to shut down March 16, workers were told by Meritage to apply for unemployment.

“Which is what we did,” Chavez said. “We went online and applied for the benefits.”

She was denied.

“I’ve never been on unemployment before, so I wasn’t sure what had happened,” Chavez said. “(I thought) that maybe I did something wrong, or I filled something out wrong.”

It wasn’t her mistake. Meritage confirmed to News 8 that the amount of tipped wages was inaccurately reported to the state by the subsidiary of Meritage. It showed that Chavez was making just over $5,000 a year instead of the more than $20,000 she claimed on her W-2. That $5,000 figure is too low to receive unemployment. According to Meritage, around 137 employees have the same prolem.

News 8 reached out to Meritage CEO Bob Schermer, who makes around $2 million a year, according to online records. Despite efforts to reach him over the phone, at work and home, he pushed off request for answers to his lawyer.

“(We) immediately reviewed that matter and corrected the tipped wages reported to the (Michigan Unemployment Insurance Agency) by March 26th,” Meritage general counsel Robert Potts said. “…Then immediately reached out to our laid off employees by assisting them to do all that we could so they would receive their unemployment payments.”

Chavez is supposed to receive $331 a week in unemployment. To date, she has yet to see a dime and hasn’t gotten any monetary aid from her employer.

“That hurts. I know that there is only so much that someone can do, but if you make that much money and you are that big of a corporation, there surely is something that can be done to try and help the group of us that aren’t being paid. Because they know about us,” Chavez said.

Meritage says it has yet to receive any PPP funds, adding, “we know it will be less than the $29.1 million reported” already to the U.S. Securities and Exchange Commission. News 8 is working to independently confirm that.