Restaurant Eliminates Tips, Gives Employees $35,000 a Year
They will also be offered health insurance and paid vacation time.
Is the the future of the restaurant industry tip-free? One Pittsburgh restaurant certainly thinks so. The owners of three-year-old Bar Marco are not only abolishing tips, but are giving their employees a salary with benefits. According to Next Pittsburgh, full-time employees will be paid a base salary of $35,000 a year and will be given health care and 500 shares in the company. Employees will be asked to work a maximum of 40 to 44 hours per week, will have two days and one night off a week, and will receive 10 paid vacation days per year. Co-owner Robert Fry tells Eater, "America needs to realize that working in the restaurant industry is an occupation." Fry worked with long-term employees to create the plan.
Fry notes that by April of this year, 20 of the restaurant's employees ? both front and back of house ? will be switched over to salary and that the restaurant will no longer accept tips. There will still be a handful of part-time employees, "mainly college students," says Fry, that will work as servers' assistants and will be paid $10 to $12 dollars per hour. Unlike other restaurants that have eliminated tipping, Bar Marco will not be adding in a service fee or raising their prices. Instead, the co-owners are hoping to grow revenue by expanding their menu, increasing the number of covers they do in their wine room, and upping the number of events they host.
Fry tells Eater that all employees are on board and have signed contracts. He told Next Pittsburgh that with the salary comes other expectations: They will have a lot of responsibilities, too like being present at bi-monthly finance meetings. We want complete transparency. We want people who want to be part of what we are doing and who want to grow with us."
Back in June, another Pennsylvania restaurant announced that it would ban tipping. The co-owners of Bistro Girard decided that they would pay their waitstaff a "living wage" of $11 per hour and offer them full benefits as well as profit sharing. To offset the costs, the restaurant would raise prices by 10 to 20 percent.
Without doing the math in my head, it looks like this is a losing situation for the servers. Restaurant-goers will be paying the same amount of money that used to be food + tip; now it will just cover food + the 10 to 20% increase the owner has raised the prices.
Personally, I would like to see the US put an end to the out-of-hand tipping. In CA, servers have to make at least minimum wage. Tips are extra. I've noticed recently that people will think nothing of tipping >20% of their bill. This can add up fast. Let's say a family of 4 goes to dinner at Chili's and the bill comes to $50. They tip 20%, giving the server $10. Added to the $9/hour the server already makes, that is $19 for the hour of service. That assumes the server has only one table. At some point are servers becoming over-paid for their job? (I'm not trying to be rude or snarky but my FB lights up with digs against fast food workers wanting a "living wage" so would the idea of a server at Chili's averaging 3 times the earnings as a cashier at McDonald's be reasonable?)
So what do you think of the idea? Is it good for servers, customers, and restaurant owners?