NRN editor and restaurant operations expert Ron Ruggless breaks down what you should be watching in the industry this week. Connect with him on the latest operations trends and news at @RonRuggless and [email protected].
The state of restaurant gratuities seems to be nearing a tipping point as operators wrestle with how to make the ingrained U.S. tipping system fair for all employees.
Some restaurants are opting for service charges, as European eateries do. Others are creating hybrid systems. And some are getting rid of tipping altogether.
Los Angeles Magazine reported last week that Alimento, a restaurant in the city’s Silver Lake neighborhood, was striving to equalize pay between kitchen and front-of-house employees by adding a separate line on all checks for a kitchen gratuity, in addition to a tip line for front-of-house staff.
Zach Pollack, chef-owner of Alimento, said he came up with the idea after losing two of his best line cooks to higher-paying positions at other restaurants.
“They couldn’t make it work on their end, and I couldn’t make it work on mine — this is a small restaurant,” Pollack told the magazine. “But at the same time, the servers are walking away with a lot of money. That’s great, but it put an issue in the spotlight that I’ve been aware of for a while.”
A recent trends forecast by food and restaurant consulting firm Baum + Whiteman noted that tipping was heading toward extinction.
“The disparity between earnings of tipped waiters and untipped back-of-house grunts is becoming a moral issue tinged with class warfare,” the firm said.
Baum + Whiteman noted that some restaurants — Alinea and Next in Chicago, Per Se in New York, and The French Laundry in Yountville, Calif. — were migrating to pre-paid ticketing systems. The firm also noted that restaurants in many states and municipalities face pressure from minimum-wage increases.
Some restaurants are doing away with tips entirely. When Girard Brasserie and Bruncherie recently opened in Philadelphia, it debuted as the city’s first eatery with a no-tip policy.
Co-owner Cristian Mora told the local ABC news affiliate that customers can still leave tips if they wish, but it’s not expected.
Mora said Girard Brasserie workers, on average are paid about $13 an hour, and the restaurant also offers paid vacation and medical insurance. Before it opened, the restaurant received more than 500 applications for 14 staff positions.
Other operators are seeking hybrid solutions. For example, Toast in Oakland, Calif., switched to a 15-percent service charge, with an optional additional tip.
Owner Heather Sittig Jackson told the San Francisco Examiner last week that she felt she had to make changes to deal with Oakland’s minimum wage, which will rise to $12.25 an hour, from $9 an hour, in March.
Sittig Jackson said she had two options: increase prices across the board to increase revenue, or charge a service fee in lieu of tips.
“With the minimum wage increase, our servers will make $33 per hour and our cooks only $12.25 if we keep to a tip only model,” she told the newspaper. “Nobody at Toast thinks this is fair, so we have switched to a 15-percent service fee with additional tip optional.”
“The problem with service charges is if you lose the tipping process, it affects customers. Some people mind that. The other side of it is that servers do enjoy getting rewarded,” she said. “We decided to do a hybrid.”
What other employees think
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In his Los Angeles divided-tip test, Pollack said Alimento’s additional gratuity will only be shared among dishwashers, line cooks and prep cooks. “My sous chefs aren’t getting a cut, and, of course, neither am I,” he said.
Pollack said his wait staff supported the divided-gratuity idea.
“They are actually excited,” Pollack said. “I’m guessing people will still default to giving service 15 [percent] to 20 percent, but even if they give only a few bucks to the guys in back, it will make a huge difference.”
He said he hopes the idea will expand to other restaurants.
“I have this fantasy that more restaurants adopt this strategy,” Pollack told Los Angeles Magazine. “If they do, then the logical conclusion would be that the restaurants serving the best food would garner the best tips for cooks, which means the best restaurants would be able to sustain better cooks, rather than losing them to hotels, country clubs or lounge restaurants that are able to subsidize kitchen labor with extra income.”
To explain the new divided gratuity system to Alimento’s guests, the restaurant distributes a printed card with each bill that reads:
“At Alimento, we believe a great meal comes together not from the effort of any single person, but from the successful cooperation of a team of people, from servers and hosts, to cooks and bussers. Nevertheless, traditional tipping has created a very sizeable gap between the earnings of cooks and servers, and current state law prohibits restaurants from sharing servers’ tips with kitchen staff.
“Rather than imposing a mandatory ‘service fee’ or ‘kitchen surcharge’ as many are doing, we’d like to leave the choice in your, the diner’s, hands. If you’re perfectly happy with tipping as usual, there’s no need for you to do anything differently. But, if you’d like to send a little love to the lads and ladies hustling in the back, we’d be honored to provide you the means to do so. All such tips will go to line cooks and other kitchen staff; no one in management will participate. L.A. has many great restaurants, and we’re thrilled you’ve chosen to dine with us today. We will continue to work hard to bring you the best dining experience we possibly can.
Thanks for your ongoing support!”
Contact Ron Ruggless at [email protected].
Follow him on Twitter: @RonRuggless
