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Restaurant Eliminates Tips, Gives Employees $35,000 a Year

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They will also be offered health insurance and paid vacation time.

Courtesy of Bar Marco

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.

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