Here’s a Tip: Don’t Give One
As a former restaurant employee and current restaurant visitor, I was shocked to see headlines stating that U.S. restaurants are now testing the “European-style system” of no longer allowing their employees to work for tips. Immediately, I questioned how the server, bartender, or food runner could make a living without tips? I was flabbergasted when headlines started reporting that now non-tipped employees were more than happy about keeping the change – or lack thereof.
According to New York Eater’s website on 10/14/15, NY-based Union Square Hospitality Group’s (USHG) Founder and CEO, Danny Meyer, announced that starting in November of this year the company will “roll out an across-the-board elimination of tips at every one of its thirteen full-service venues, hand in hand with an across-the-board increase in prices.” This is one of the first restaurant companies to implement a no tipping policy across all of its full-service venues in the U.S.
Although this isn’t the first round of attempts for Meyer and his company at eliminating the tip (the first try was in the 1990s), the second round is definitely staying put. USHG plans on implementing the new changes in its most visited and expensive restaurant The Modern. The company calls the new system Hospitality Included because menu prices will be significantly higher (no word on exactly by how much), sales tax will be the only added item on the check (sorry, they can’t take that away!), and a space to sign on the dotted line.
With hopes to off-set their rising labor costs, restaurateurs on the west coast have been experimenting with no tipping after new minimum wage proposals were accepted in major cities like Seattle, Los Angeles, and San Francisco. Seattle, WA-based Ivar’s Seafood locations reformatted an all-inclusive menu with a 21% price increase and the Walrus and The Carpenter restaurant added a 20% service charge to its checks.
In January 2015, Business Insider reported that one restaurant in particular, Bar Marco in Pennsylvania, offers a contract to its employees stating that they will no longer be tipped, but instead receive a salary of $35,000 a year, must work 40-44 hours a week, and attend bimonthly financial meetings. In return, employees are granted healthcare benefits, 500 shares in the company, and 10 days paid vacation.
Not only are the Front of House (FOH) employees happy, but the Back of House (BOH) employees, managers, and owners are, too. First, eliminating tips and increasing prices allows for more distribution of funds to all employees across the board, which eradicates major discrepancies in pay between FOH and BOH employees. Second, this would simplify bookkeeping for managers and owners as well as better their abilities to reward employees based on seniority, complexity of their jobs, or reward based on excellent performance.
These changes are expected to make more than enough waves in the restaurant industry as a whole, and I wouldn’t be surprised if larger, more prominent restaurant companies accept the tip to no longer accept tips.