“I realized: Come up with a no-tipping policy, give [staff] more wages, let them share profits into the company,” said the chef and owner of the Amaya fleet of restaurants.
Instead, Bhagwani said, he will charge a 12 per cent administrative fee on every bill. He will also allocate 10 per cent of restaurant revenue toward higher wages for workers.
“Instead of paying [staff] minimum wage, we create a pool and it goes into their wages, depending upon the positions, how many hours they’re working,” he said.
Ontario’s current minimum wage is $11.25. Depending on the position, staff wages are expected to rise to between $18.25 and $20.25, he said.
Michael von Massow, an associate professor of hospitality, food and tourism management at Ontario’s University of Guelph, said the tip-free restaurant idea is gaining traction largely because of “trouble keeping kitchen staff.”
He said a model such as this one, aimed at paying workers in the back of the house better, “will really help to lower the turnover that kitchens experience.”
But retaining talented staff is only one part of the thinking behind the no-tipping stance, Bhagwani said. He also wants to encourage a more equitable environment.
“I’ve always felt the dishwasher in the restaurant works the hardest and he gets the lowest money.
“I wanted them to feel a part of the restaurant,” he said. “It’s their restaurant as much as it is mine. That was key for me.”
Then there is nationally Danny Meyer, one of the most well-respected restaurateur in the United States and CEO of Union Square Hospitality Group, who believes tipping is a broken system:
When are you going to get rid of tipping at The Modern?
We intend to do it before Thanksgiving … and the reason for that is that the restaurants traditionally after Thanksgiving heat up so much that we’d like to get a jump start on something that’s going to be this new. [But] we want to see how it works at at least one restaurant before January 1st, because at that point minimum wage goes up anyway [to $9 per hour] and every restaurant in New York City is going to have to find some way to raise their prices. We want to get some experience before that with the new system.
How did your employees react to your announcement?
I think our employees are incredibly pleased with the reason behind it because they understand that what we’re trying to do is to address a system that is broken and that is not sustainable. I’ve had too many meetings with too many people over the past year and a half where really earnest professionals, both in the kitchen and the dining room, have said, “We love this company, but it’s just not working financially. In a city with cost of living like New York City, can you please do something?”
So everybody’s completely signed up for the “why,” and everybody including me is eager to get beyond the theory and put it into practice and see how it works.
Just to clarify, you want to do this so you have more money to compensate your staff in the back of the house, right?
That’s the economic system we want to fix, but there’s another part, which is that for the entirety of my career I’ve been trying to help … servers view their work as an incredibly valid career choice, and professional. I’ve always had the sense that tipping is antithetical to feeling like a professional and feeling proud that the reason you do your work as well as you do it is for the professional joy of doing a job well. And it’s always troubled me that there’s this underlying sense that the only reason that someone’s being nice to me or delivering my food on time is in the expectation that I’m going to leave a tip. And if the table next of me doesn’t leave as a good a tip as I do they won’t be treated as nicely and they won’t have their food delivered on time, and I think that’s demeaning to the kind of people who work in our restaurants.
We’re trying to rip the Band-Aid off and do it one way the right way and do it right now and learn as much as we possibly can at The Modern — which has four different laboratories, because it’s got prix-fixe dining, à la carte dining, private dining and an active bar — and then tweak as much as we need to before we go on to the next restaurant.
There’s national seafood chain Joe’s Crab Shack, which will soon be doing away with tipping at 18 of its restaurants around the country:
On a call with investors last week, Ray Blanchette, CEO of Ignite Restaurant Group, the company that owns Joe’s, said of the new experiment in tip-free restaurants, “We…believe that it reflects our commitment to not only being a great place to eat but a great place to work,” adding that he thinks tipping is “antiquated.” He explained that in the locations testing out a tip-free model, prices will rise somewhere between 12 and 15 percent while hourly wages for waitstaff, bartenders, and hosts will increase to the $12 to $15 an hour range.
Joe’s is the first chain to consider ending tipping, but it’s a trend that has spread nationally. Last month, the owner of a number of high-end restaurants in New York City announced he would end tipping at all of them. That came after other high-end restaurants in the city, lower-end restaurants in Philadelphia, Pittsburgh, Kentucky, and Wisconsin, bars in Portland, Oregon, Fort Collins, Colorado, and Washington, D.C., and coffee shops in Minnesota had all gone with the same move.
Joe’s Crab Shack believes the change will help the company by reducing turnover. “It’s expected to result in improved team atmosphere, a significant reduction in turnover, and greater financial security for the employees,” he said. He noted that employees will have an incentive to stay in their jobs at $14 an hour no matter what shift they get, for example, when other jobs can pay as little as $2.13 an hour plus tips. “You create a reason to stay purely through your compensation model,” he noted.
It will also allow Joe’s to recruit top talent. Blanchette said the company can now “compete for the very best employees in other spaces,” such as other fast casual restaurants and even retailers, particularly for those who prefer a steady wage over tipped work. “We see this as an opportunity to really continue to upgrade the talent within our organization,” he added.
I’ve only ever worked in the service industry. I began at a pizza buffet place and after a few years, went to work as a server at a restaurant. I remember being thrilled with the significant increase in income I saw. And that was nothing compared to how much money I began making several years later when I became a bartender. I can’t complain at all about the money, bc for about 10 years, I made more and more money each year as a bartender. Which is great. For me. But for others? I’ve also managed a few restaurants and one of the things I noticed is that the wages of back of the house (BOH) employees aren’t all that great. Some start out at $8/hour, and after a few years, may be lucky to make it to $9.50/hour. One place I worked at started their BOH staff at $10/hour, which many thought was great until they realized raises did not quickly come. So I completely understand why kitchen staff members might not feel inclined to want to stay at a restaurant. Especially when the hours can be long and grueling (especially in fast paced restaurants).
All may seem hunky dory for servers…to those who don’t know better. I’ve worked with many people who, for whatever reason, did not make sufficient money at a restaurant to live on. Yes, some people don’t quite have the skill set to be a server (though I think the way people are treated as interchangeable, and the lack of proper training in many restaurants accounts for much of the inability on the part of some people to perform to expectations), but others seemed to get the [crappy] luck of the draw-getting bad sections for instance, or the dreaded horrible tippers. I imagine most people who have been in the industry are aware of, and have served guests who tip horribly, or don’t tip at all. I’ve heard people say “I shouldn’t be required to pay their bills. They should get a job that does pay”, which to me is just such an asshole thing to say. Some people *can’t* get other jobs-for whatever reason. And some people enjoy serving. Here in the United States, tipping is standard. This is not Europe. Generally speaking, if you live in the U.S. and dine out at a sit-down restaurant, you probably know that tipping is strongly suggested. Of course that doesn’t stop some people from failing to leave tips. Sometimes it is due to the fault of the kitchen. Mistakes are made in restaurants. A steak is overcooked. The wrong dressing was on a salad. The food took entirely too long to come out. Many of those things are not the fault of the server, yet they often bear the brunt of guest frustration. And that frustration comes in the form of NO TIP. There are also the people who go out to eat and say they can only afford to pay for their meal, but not a tip. So a server (or bartender) waits on a guest, and makes nothing off them. There’s also, of course, screw ups on the part of staff. I’ve made plenty in the 20 years I’ve been doing this. No matter how long you’ve been in this industry, you’re never going to be perfect. Mistakes will be made. I’ve had many guests who aren’t terribly angry if they got the incorrect side item with their dish. They simply mention it, get the correct one, and enjoy their meal. They don’t get pissed off and not tip. But there are plenty of times that has happened too. From the perspective of the server or bartender, to lose out on a tip bc you made one mistake can be frustrating, especially when the rest of the guest’s experience may have been quite good. Placing control over the money a person makes in the hands of the guest is too fickle. Too unpredictable.
And that’s a problem. Income consistency is nonexistent for many people. Sure, if you’ve worked at an establishment for a period of time, you may realize that you’ll average a certain amount of money on certain shifts, and of course you request those shifts, but that’s not always the case. In addition, newer restaurants offer no guarantee of business, so employees working for tips may be frustrated coming to work and not having enough guests to wait on to make sufficient money. I’ve worked in a couple of restaurants that took time to build up a customer base, and many people couldn’t wait 3 or 4 months to start making decent money (hell, I barely could).
Another problem is that during rough economic times, or shortly after the New Year, business goes down and so do tips. One of the worst times of the year I’ve found is January/February. After the new year, when people have less money to spend, and before tax season, when people often have expendable money again? That can be a rough period of time.
The lack of financial security is exacerbated by the tipped minimum wage, which is far lower than the federal minimum wage or even state minimum wages. Here in Florida, the minimum wage for servers is around $5, which…let’s just say my cat is about the only one that could live off that. When you make $800/week, you don’t have to worry about your paycheck. You just figure that goes to paying taxes. But what about when times are tough? When you’re just starting off? What if you’re working somewhere with guests who do not often tip well, such as Waffle House or Denny’s or IHOP (my perception is that many guests do not tip well in those places, but I’ve never worked there, so I don’t know for sure)? How can you survive making $40 after working 9 hours. Yeah that $40 may be untaxed cash, but that’s gas money and dinner. Less if you have kids. And that $5/hour ain’t going to amount to much on your paycheck.
And then there’s the shit you have to put up with.
While I have encountered many great guests and made friends with some of them, I’ve encountered some of the most needy, rudest, most obnoxious guests. I’ve really wanted to punch people sometimes or drop their food in their lap. I hate being snapped at or have someone tap their glass on the table repeatedly or get angry when their food takes longer than they expected (which, while it can be the server/bartenders fault sometimes-isn’t always and we have no control over that). But so many guests think that since they are paying us-i.e. tipping us-they can treat us like their personal fucking slaves. The horrible treatment I’ve had to put up with pales in comparison to the sexual harassment that many, many women put up with in the hopes of receiving a tip. And, as it turns out, eliminating tipping may reduce sexual harassment:
According to a survey carried out by Restaurant Opportunities Centers (ROC) United last year, four in five women working in the US food service industry report having been sexually harassed by customers. About 74% of women in the restaurant industry reported sexual harassment from co-workers or superiors.
Women who work in restaurants and bars should not have to tolerate lewd behavior and sexual harassment from customers in order to supplement their wage and make ends meet, said ROC co-founder and co-director Saru Jayaraman this week.
“When you live off the tips,” she said, “you have to tolerate whatever the customer might do to you, however they might touch you or treat you or talk to you, because the customer is always right. The customer pays your bills, not your employer.”
Tipped employees’ low wages and sexual harassment in the hospitality industry are intertwined issues, said Jayaraman.
In states where tipped minimum wage remains below the federal minimum wage of $7.25 and is anywhere from $2 to $5, women interviewed by ROC United were twice as likely to say they had been sexual harassed at work as women in states such as California, where the tipped minimum wage has been eliminated.
Eliminating the tipped minimum wage and increasing the federal minimum wage could help reduce sexual harassment in certain industries, Jayaraman said. However, she added, the rise of “breastaurants” like Tilted Kilt and Twin Peaks, in addition to the long-established Hooters chain, had reinforced the idea that women’s bodies are on sale as much as the food.
That whole ‘customer is always right’ mentality has led to a lot of entitled assholes thinking that sexually harassing and objectifying female servers is ok. That shit is not ok. Women should not have to put up with assholes treating them like a slab of beef just so they can make their money. Women don’t lose their status as human beings deserving of respectful treatment when they go to work at Applebees or Ruby Tuesday. 10 years ago, I thought tipping was fantastic. But today? Based on my experiences, and what I’ve learned about the service industry, if someone told me tomorrow that restaurants across the United States were doing away with tipping, not only would I not be UNhappy, I’d be thrilled. Because that financial security would benefit a lot of people who don’t have it, and might lead to a decrease in sexual harassment, which I consider a very good thing indeed.