Gratuity Free Dining

Imagine being a cook in a restaurant. You study at a culinary institute, pay tens of thousands of dollars on an education just to find that the national average hourly rate for a kitchen chef is between $8 and $15 (www.payscale.com).

Those with less than five years of experience will take home a median salary of $25K and are unlikely to be provided medical or dental benefits. There is no opportunity for extra compensation like tips because in many states there are laws that prevent tips from the front-of-the-house from being shared with the kitchen workers.

This is a major frustration restaurant owners are experiencing. They are struggling to find good quality chefs who will work for low wages because many chefs feel that the position is not compensated for the amount and quality of work that they do.

Now move to the front-of-the-house and imagine being a server in a restaurant. The national average hourly rate for a server is $5 however, it can vary depending upon the type of establishment in which they are employed. It may range from $2 to $10 with hourly tips ranging from $1 to $16. Tips aren’t guaranteed and are not always based on performance; tipping is discriminatory. Studies show that men get tipped more than women and white servers are tipped better than servers of color, even by other customers of color.

This adds to the frustration for restaurant owners as well because they are struggling to retain employees that rely on tips for their income and facing new margin pressures from the federal government. In New York City, new federal regulations make more employees eligible for paid sick leave and overtime. On top of that, fast-food workers’ minimum wage will climb to about fifteen dollars in the next three years, meaning that non-fast-food owners and operators face a challenge with the possibility of losing their staff to those establishments.

Danny Meyer, the well-known hospitality guru says that “fine dining has an obligation to lead fast food in everything. Whether it’s how we source ingredients, how we hire, how we train, how we design, how we interact with our communities — we can’t have a situation where we are asking someone to pay $40,000 to go to the Culinary Institute of America to then work for $12.50 per hour, when they could work in fast food for $15.”

Meyer, like some others in the industry, is moving to a system he calls, “Hospitality Included” or gratuity free dining. He raises the price of food and offers a reliable salary to his staff while removing gratuity from the bill. The prices of food will only be raised ten to fifteen percent, so those that generally pay higher gratuity will actually be saving money when they dine in.

We have a few local restaurants that are putting their own spin on gratuity free dining. Seward Co-op Creamery pays their staff a base compensation and donates any gratuity to their community giving program. Travail Kitchen has a ticket system they use instead of taking reservations. Tickets are for sale on their website; each ticket is associated with a date and time to dine and covers the meal, tax and an 18% tip.

Gratuity free dining may not work for all establishments but it is a system that is working to address the issues in the restaurant business model. Working towards a system where servers are paid a consistent compensation and have more flexible schedules. Where kitchen workers are compensated fairly for the amount and quality of work. A system where the restaurant staff both front-of-the-house and back, work together and feel good when they come to work. That is how the restaurant business should be.

Do you think gratuity free dining should be an option at more establishments?

Topics: Community Outreach, Industry Resources