Chefs and Managers Weigh in on the Tipping System

Welcome to Hot Topics, in which food industry people chime in on a major issue in food.

[Illustration: Eric Lebofsky]

Tipping has long been a subject of debate among chefs, restaurateurs and diners alike, but New York Times critic Pete Wells reignited the debate earlier this month with a piece coming out strongly against the long-time practice. And months before that, big name New York restaurateurs such as Danny Meyer and David Chang publicly mused about abolishing gratuities in their restaurants, while elsewhere in America the backlash against tipping also gained momentum. But while a number of chefs have joined Wells in the chorus against tipping, there are also plenty of people on the service side who defend the system. Eater reached out to chefs, restaurateurs, managers, sommeliers, and bartenders to get a sense of the debate from both the front and the back of the house. After all, fixing the tip problem "would have to be a great responsibility of the restaurateur, the restaurant management team and, certainly, the consumer, " says Frasca Food and Wine co-owner and wine director Bobby Stuckey. "You can't all three bash the system, but not expect to take part of the responsibility in the solution."

Here now, Jim Meehan (PDT, New York, NY), Stuart Brioza and Nicole Krasinski (State Bird Provisions, San Francisco, CA), Hugh Acheson (Empire State South, Atlanta, GA), Sarah Simmons (City Grit, New York, NY), and Bobby Stuckey (Frasca Food and Wine, Boulder, CO) weigh in on the issue.

Jim Meehan

Bar: PDT — New York, NY

You tweeted about how people should disclose whether they've ever worked for tips when weighing in on the debate. I thought that was an interesting point.
To clarify, it's not that I'm saying that if you have never worked for tips you don't deserve your view to be shared. It's more that it'd be good for those who have worked for tips [to have] their opinion on it considered perhaps more heavily. I thought it was interesting how one of the main people getting the debate out there was Pete Wells. It always surprises me what critics feel entitled to discuss. Pete Wells is in the business of giving stars. There's obviously a direct correlation between stars and revenue for restaurants. It's like he's been in the business of making [restaurant] owners money or losing owners money, and now he's going after the waitstaff, too.

Well I guess he would argue that he's offering the diner's perspective since a lot of them complain about tipping, too.
If you read his piece, the places that he was talking about were like Sushi Yasuda, Per Se, French Laundry, Saison. They're all places that probably average $500-600 a person to eat there. He was speaking as if he really covered his bases for restaurants and bars, when in reality he was talking about a select group of restaurants that are operating in a stratosphere of dining. I just thought it was a sort of bizarre group to survey for something that is speaking toward all people who work for tips. That's part of why I thought it was important to speak out. What's written in the New York Times reaches millions.

So how is it different for these smaller restaurants, the mom-and-pops?
Basically, people who work for tips are salespeople. That's one of the things I haven't seen addressed in this sort of dialogue. Any salesperson generally works for commission of some sort. Waiters and bartenders, they're part of your sales force. So it makes sense based on the fact that these are valued and talented salespeople that they would work for tips.

Look at the opportunities that are available at each level of the restaurant food chain. Waiters and bartenders are there for the most part to make money. They have to support a family or themselves. Managers who are working for salaries and benefits and bonuses. Then, the opportunities that are available to chefs are not available to waiters and bartenders. While young cooks perhaps don't have the opportunity or pay scale available to them that waiters do, the benefit of being a cook is that the opportunities at the end of the line — when you become a sous chef or chef de cuisine — are much better than they are for a top waiter or a top bartender.

So is this solving a problem at the expense of tipped employees?
It seems from what I've read that most of the people weighing in on this debate are chefs. So I'd like to see more tipped employees weigh in on the situation. I know this is gonna perhaps rub kitchen people the wrong way, but I think changing the tip system so that the kitchen is in the pool is robbing Peter to give to Paul. I just don't think that's the solution. Higher kitchen wages need to come out of the owner's pockets, not out of the waiter's pockets.

[Photo: Daniel Krieger]

Stuart Brioza and Nicole Krasinski

Restaurant: State Bird Provisions — San Francisco, CA

Where do you guys come down on the tipping debate?
Stuart Brioza: We're very proactive at our restaurant. We're all equal, front of the house and back of the house. In the end, it's all of those moving parts that make that restaurant successful. The waiters are equally as important as your kitchen staff. If you're short on any of those pieces, you are fucked. Period. I don't know if [the tipping system] can be changed. It's so embedded in our society.

I think it needs to be taken to the diners, to be honest, versus the restaurants. As a restauranteur, the margins are already tight. What I've learned is if you're operating at a 10 percent profit margin, you are not being sustainable and you are not being responsible to your staff, the needs of the restaurant, and your clientele. In the tech world, profit margins are 70 percent. In the restaurant world, it's 10 percent to 20 percent. But the real question should be asked of the diners. What do you think gratuity does? Does that just go to the service staff? Does it go to the restaurant? Does it go to the kitchen? I think diners are not in the know as to who is actually receiving the gratuities.

So at State Bird, can you share tips with the back of the house?
SB: Our restaurant is a pooled house. That's step number one, I think. Step number two is that in the state of California, you have to participate in the serving of dishes [to be included in the tip pool]. So we've created a system in which our cooks will run food, and take orders at the counter. Our kitchen staff does legally share the tip pool, but in order for us to have that work we had to really think about how we can incorporate them into the tip pool. It has worked out awesome for everybody. Granted, our business is really good.
Nicole Krasinki: The systems and the laws are not current. They need to be updated.
SB: They do. I think [one should] pay people a minimum wage and take those gratuities and disperse them in a way that is behooving the entire populace of the restaurant. There's no reason why cooks should be making $12-15 an hour and waiters are making $25-50 an hour and working half the amount of time. I really feel that everyone in the front of the house would agree that the kitchen staff should be making more money. We need to find equality in our restaurants if we're going to continue with this archaic way of tipping.
NK: You hold your kitchen staff to the same standards that you hold your front of the house staff: they have to be well-groomed, thoughtful, able to communicate. Maybe back in the day it wasn't like that, cooks were much more could be way more rough around the edges.
SB: I think that we need to pay attention to how grotesque this has become. I think the states and the federal government needs to get involved.

What specific regulations would you like to see changed?
SB: The problem with all this is there's going to be the scumbag restaurateurs that ruin it for everyone. That's why all these laws and rules have been set up. But as we grow and the industry evolves, so do the rules and regulations. We're working with these rules and laws that are decades old. I think the cooks just need to make more money. Everyone should make what their value really is.

Is tipping ever going away?
NK: We've talked about service charges and it seems like it works very well in places like The French Laundry and Coi, the higher-end where you're going in and your menu price is already set so you can do the math in anticipation. You can be like, "Okay, I'm spending $105 and the service charge is X, I'm going to plan to spend $135." But when you're coming in [to State Bird], you can be the person spending $18 or the person spending $80.
SB: I don't know what the answer is. I think that it's going to be cumulative, and it's going to be a lot of rogue and maverick restaurateurs taking the next steps. There's a few restaurateurs that can probably do it and have a major impact in the restaurant world. But I think it's going to be a lot of small guys like us. I can't tell you how many hours we've spent on this subject. Everybody in my group of chef friends and restaurant owners, it is at the forefront of our conversations. What I really admire and love is that there's some cool ideas and solutions.

Hugh Acheson

Restaurant: Empire State South — Atlanta, GA

So where do you stand on the tipping debate?
It's a strange system. It may not work for the long term. It's been there for centuries, I guess, but I think we just need to level the playing field a little more in inequity across the board in restaurants. Overall the compensation rate in restaurants is pretty low. You are familiar with how much a line cook makes in New York. So maybe they make $500 a week. It's hard to live off $26,000 a year in New York. And maybe a waiter makes $600 at an average restaurant. Across the board, we need to talk about living wages first.

There are a lot of situations that need to be remedied before we can even talk about the whole changing of the system. I kind of think pooling is kind of the same thing, but it's just really the front of the house. Pooling tips makes for a better waiter system overall. There's peer pressure for them to carry their weight. Nobody can be a prima donna on their own and try and up-sell on everything. That seems to work well, but then again it leaves the back of the house still in the same situation.

Do you think that a smaller or more average priced restaurant would be able to get away with abolishing tipping and raising prices or levying service charges?
Possibly in lieu of a tip, yes. But coming up to a living wage overall for their staff is a difficult thing. We've done it pretty well through our systems in a small town, but we're an upper-end restaurant, too. We have some cushion in the fact that we sell a lot of wine and things that have built-in mark-ups that sustain everything else.

And there are a lot of regulations to deal with first across all the states.
Yeah, waiters in Georgia as gratuity employees are entitled to a minimum wage of $2.13 cents an hour. That's absurd. Granted, some waiters make a good amount of money. But I don't think the average waiter is pulling in that much money and doing the sales that a lot of our waiters are. We're a certain stature restaurant. We're lying to ourselves if we think every restaurant is like we are, where waiters are selling on average $1000-$1500. An 18 to 20 percent tip pull on that is a pretty good wage. I'm more concerned about the Chili's where their sales are going to be $340 and they'll make 20 percent of that. On top of that, they're making $2.13 an hour. They don't have health care, they can barely pay their rent. Welcome to America.

So what, if anything, do you think can or should be done?
I think the laws just need to change. I would do [service charges] if we could be granted full legal allowance to do so. I think it's a much better system, having a service charge and then providing for your employees a little bit better. I'm just unfortunately not the guy who has a team of six lawyers on retainer to do this type of work. Nor do I want to be.

[Photo: Taylor Oxendine]

Sarah Simmons

Restaurant: City Grit — New York, NY

So where you do fall on the debate about tipping?
I've been thinking about this for over a year. We pay our service staff almost three times the hourly rate that a typical restaurant pays them. So we've been dividing tips evenly with the front and the back of the house. At first everyone was really excited about it and then people got disgruntled. And you have to pay taxes on gratuity, so it was starting to cost me more money. [There was] all the bickering and it really wasn't improving better behavior on the floor, so I've just decided to increase everyone's hourly rate even more and no longer accept gratuity.

When are you going to do that?
It started last month. And so a lot of our servers don't want to work for us anymore. But what they don't realize is that on the nights we do private events or charity events — when there is a gratuity because it's for charity — they now could walk away with $30 more a night on those nights. At City Grit, the tips are hit or miss. On the big nights, there are also probably three times as many people working on the floor and in the back of the house. That shrinks the pool, so on average they still were only getting $20 or $30 a night. With the new structure, they're guaranteed to make more each night.

Is it hard for people to get their minds around the idea that it might end up being the same amount of money?
Yes, in general in the restaurant industry for sure. For us it's less so just because there's no up-sell. Life-long servers love coming in and working every so often at City Grit because it's easy. You don't take orders. You don't have to worry about coursing food out. They love the fact that they know how many hours they're going to work and exactly how much money they're going to make. So there's no, "Ugh, do I want to pick up this shift on a Monday because we're not sure if we're going to be busy." We're lucky in that respect. But it's actually costing me money overall because I'm not raising my prices either.

Right, how do you make that work?
I'm just hoping that it is going to create a shift and enable me to bring on better service staff that increases the experience so much that it drives revenue long-term versus having to make our dinners more expensive and putting it back on the customer. I'm hoping. Ask me in six months.

I think the biggest change so far is the customers wanting to add gratuity and not understanding that our servers are making a really good hourly rate. But, to me, it's a good sign. It means that customers appreciated their experience. Personally, I'm a really good tipper because I feel like it's good karma for the industry. But I think that the pressure to have to give someone gratuity for an experience that was sub-par is kind of a bummer as a customer. But then I do it anyway because everyone has mouths to feed and bills to pay.

And then for restaurants with split tips, you're punishing the entire staff for this one person's behavior.
I think that's interesting, too. You're not supposed to split tips with anyone but those tipped minimum wage workers, which I totally get on the workers' behalf. But the kitchen has been working all day for those dishes. I'm not saying servers don't work as hard as the kitchen. But when we made the decision with City Grit originally to split [tips] across the board, it's because we have often been prepping food for two days for that dinner. The servers come in and they're awesome and they leave. They've worked eight hours. And our cooks have worked for 25.

I think that the city needs to give us all big breaks. (laughs) And then we can pay everyone really well and still make money and open more restaurants and have a positive momentum going forward. The customer pays less, gets better service. I think we're onto something. There needs to be a tax break.

[Photo: Daniel Krieger]

Bobby Stuckey

Restaurant: Frasca Food and Wine — Boulder, CO

You talked to Eater Denver about the tipping debate a few weeks ago and I wanted to follow up with you.
It's a really tricky situation and I worry. As someone who made a living as a tipped employee for a long time, I understand it very well. I'm also an operator of a restaurant. While there are definitely flaws with the system, I do wonder if the American consumer is ready to be responsible for that change. Would the consumer be willing to see it on the bill built into the entrees or as a service charge and then distributed? We already see things that have gone against the restaurant industry, meaning the no-show epidemic in America and corkage. All these things nip into an industry that has a very small margin to make a living. If you are making a] 10 percent profit in fine dining, you're considered an incredible operator. You'd be eaten alive on Wall Street if you could only do that type of margin. So it's an easy target to pick on, and I think the restaurant business gets picked on for a lot of things.

But it seems like this debate has gotten a lot of traction from chefs themselves as much as it has from American consumers. Why is this such an internal debate?
Well, I can see what the kitchen guys are saying. I mean, look, it is strange that a service person in the right environment can make more than the general manager. The general manager is not part of the tip pool. I agree with my business partner Lachlan [MacKinnon-Patterson] that it's unfortunate that the waitstaff can make more than the GM through the tip pool. So there is a bit of a problem. I am not the one who has the answer yet.

And, of course, the back of the house sees it differently. While I do agree that there is an inequality and it's not 100 percent correct, I do think the back of the house doesn't always see what the front of the house does for them. Let's say if you run a software company. Obviously, the salespeople who drive these companies to wild, crazy numbers are not seen as valuable as the software programmers. And the programmers sometimes don't make as much as the salespeople, and there's always this divide. It's unfortunate. But the programmer is always saying, "Oh, you wouldn't have anything to sell if it wasn't for me," and the salespeople are like, "You wouldn't have a company if I wasn't driving sales." So we're not the only industry that has that.

Right, Jim Meehan also made the comparison to salespeople and said this is just like working on commission.
It's kind of like a commission, but there's a lot of complexities. First of all, America has come such a long way in service. It used to be you thought of Europe as the place where there were career servers. We now have that here in the United States. We need to realize it's come such a long way and we do have people that are craftsmen front of the house people. I don't think we're willing to give that up.

Do you think getting rid of the tipping system would change that?
This is the weird thing about the tip system, one of the bad things about it. Let's say you become a great server at Babbo. The restaurant cranks, the server makes really good money. They've got these golden handcuffs. They have to make a decision as the years tick by. It's hard for them to go backwards to be an assistant manager to learn the craft of management. Automatically under the tip pool system, [they would] make less money. That's a weird, interesting quagmire. So I think the answer would be that maybe servers don't make quite as much and then a sliver of that [lost income] would be a service charge to the house. The restaurant would distribute that service charge to back of the house people and to upper management.

But then most laws in most states don't permit that, right?
They don't. But how you would do that is restaurants would take 20 percent of whatever their menu price is and you just slap 20 percent on it. That's what Per Se does. That's why the wine list looks so astronomically expensive is because the 20 percent gratuity is built into every menu item. You don't leave a tip there.

Do you think a 20 percent service charge would be the best solution then?
I think the service charge is an interesting approach. Then you could do something like this: You could give raises to front of the house people. In every restaurant, you have a couple strong servers that are really fantastic craftspeople, but because they're part of the tip pool, they're carrying another server. That [server] is trying really hard and doing a good job, but they're not the craftsman as that other person. But because they're part of the tip pool, they're making the exact same amount of money. You could have a review system as management and, if you're a junior waiter, you need to hit these certain goals to get to the top salary.

There's a lot of things you could tinker with. It would have to be a great responsibility of the restaurateur, the restaurant management team and, certainly, the consumer. All three would have to take responsibility in it. You can't all three bash the system, but not expect to take part of the responsibility in the solution.

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