Friday, January 27, 2017

Restaurants without tipping

The NY Times has the story: Year of Upheaval for Restaurants That Ended Tipping

"A rational system is exactly what he was hoping for when Huertas joined several restaurants in Danny Meyer’s Union Square Hospitality Group — Maialino, Marta, the Modern, North End Grill and (as of last week) Gramercy Tavern and the newly reopened Union Square CafĂ© — that have stopped accepting tips. The switch is part of an effort to bring the nation’s roughly $800 billion restaurant business, with its frequently chaotic and unprofessional practices and traditions, in line with modern workplace standards.
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Instead of expecting customers to tip the people who wait on them, tip-free restaurants pay all employees wages that reflect their skill and seniority. The customer pays a fixed amount, stated in writing (in menu prices), as in virtually every other kind of consumer business, from Nordstrom to Netflix to The New York Times.
This service-included system — also called gratuity-free, tipless and, within the Union Square group, Hospitality Included — has been in place for several years at expensive restaurants like Per Se and the Chef’s Table at Brooklyn Fare. But this year, influential restaurants up and down the price scale and around the country signed on, including Le Pigeon and Park Kitchen in Portland, Ore.; Dahlia Lounge and Canlis in Seattle; and ComalCala and Petit Crenn in the Bay Area.
It is too soon to tell whether the no-tipping model will become the standard, or simply an option for a few restaurants that can make it work. What is clear after about a year is that it has forced a number of unforeseen changes, large and small, in the places that have embraced it.
"Mr. Adler of Huertas, and others, say that one big reason to end tipping is the need for more equity between those who work in kitchens, who earn straight wages, and those who work in dining rooms, who receive tips.
A more immediate motivation, local restaurateurs said, was the approach of the $15 minimum wage in 2018, proceeding in New York City on Dec. 31 with a raise to $11 an hour (from $9) for nontipped workers. “Labor is just going to cost more and more, and all restaurants will need to rethink how their people get paid,” Mr. Lavorini said.
As the dining business, especially at the high end, attracts more educated and skilled workers, there is increased pressure to treat them fairly, professionally and predictably.
With tipping, chaos is a consequence. Servers compete ruthlessly for Saturday night shifts, when tips run high, but many are no-shows for Monday lunch. An experienced line cook who carries $40,000 in debt from years of culinary school earns $12 an hour, while a new server can reap three times that much.
"The “automatic service charge” imposed at many restaurants like Chez Panisse in Berkeley, Calif., and Alinea in Chicago, can redistribute money the same way a no-tipping policy does, although states treat that revenue in different ways.
Tips are also handled differently in different states, but in New York, by law, they can be pooled and distributed only to “front of house” employees: those who work in the dining room, like waiters, bartenders and backwaiters (formerly known as busboys).
"One clear lesson: “There are certain fixed items — a glass of wine, a bar snack, a cup of coffee — that affect how guests experience the welcome of the restaurant,” Mr. Lavorini said. The prices of those items stayed where they were, even as others, including those for many bottles of wine, rose by as much as 20 percent.
"From 2015 to 2016, the payroll for the Modern’s two dozen front-of-house employees’ hourly wages rose to as much as $30 an hour from $5, through a combination of the rising tipped minimum wage, paid overtime and revenue sharing.
Also, restaurants pay taxes on their revenue, but not on income from tips. When service is folded into the price of the meal, the restaurant is taxed on that “additional” revenue.
“It took hundreds of years to build up the traditions of how things are done in restaurants,” he said. “We can’t expect to change all of that in one year.”

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