Eater - Tracking America's Hotly Contested Debate Over Tippinghttps://cdn.vox-cdn.com/community_logos/52682/favicon-32x32.png2016-06-07T12:07:46-04:00http://www.eater.com/rss/stream/119577032016-06-07T12:07:46-04:002016-06-07T12:07:46-04:00[Updated] Tips Take Center Stage in D.C.'s Fight For $15 Debate
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<p>On Tuesday, the council approved the citywide $15 minimum wage</p> <p><span>The debate over whether to enact a </span><a style="line-height: 1.5; background-color: #ffffff;" href="http://www.eater.com/2015/12/3/9732294/minimum-wage-america-by-state" target="_blank">higher minimum wage</a><span> has reached a tipping point — literally — in the District of Columbia, with those for and against higher wages centering their arguments on the role tips play in the restaurant industry.</span></p>
<p>On Monday, labor union leaders met to discuss <a style="background-color: #ffffff;" target="_blank" href="http://lims.dccouncil.us/Legislation/B21-0712">a ballot initiative</a> that would raise the minimum wage to <b>$15 an hour by 2020 and increase it each year after that in proportion to the Consumer Price Index</b>. But the bill would also alter the wage for tipped workers, who currently make at least $2.77 an hour, plus tips. If passed, the amendment would increase the minimum wage for those employees to $5 an hour by 2020, and to 50 percent of the minimum wage in each year thereafter. A previous version of the bill looked to raise the tipped minimum to $7.50 by 2022.</p>
<p>On Tuesday, the city council approved a citywide $15 minimum wage.</p>
<p>But it was that second portion of the bill — the increase of the tipped minimum wage — that had both industry insiders and workers concerned.</p>
<p><q class="pullquote float-right">It would require that restaurants completely rethink their compensation model.</q></p>
<p>"Many of our members say $15 is not as much of an issue," says Kathy Hollinger, CEO of the Restaurant Association of Metropolitan Washington (RAMW), who testified at a D.C. City Council hearing on the initiative in May. "But $7.50, numerically, just doesn't work. What it would do is require that restaurants completely rethink their compensation model."</p>
<p>Though tipped workers in the District currently earn a base wage of $2.77, the law requires that their overall compensation add up to at least $10.50 an hour, the city's current minimum wage.</p>
<p>In preparation for the November ballot, labor groups had been preparing their own measure, one that would require employers to pay all workers $15 an hour, including those who earn tips.</p>
<p>After meeting on Monday, though, labor groups appear to be divided over their next course of action. Some have <a href="https://www.washingtonpost.com/local/dc-politics/deal-reached-for-15-minimum-wage-in-dc-unions-say/2016/06/07/cff3dd66-2c2a-11e6-9de3-6e6e7a14000c_story.html?hpid=hp_local-news_minwage-945am%3Ahomepage%2Fstory" target="_blank">decided to abandon the measure</a>, arguing that a $15 minimum wage, and a smaller wage for tipped workers ($5), is still a step in the right direction. A representative of the Service Employees International 32BJ, told <i>The Washington Pos</i>t "he was comfortable with $5 an hour for tipped workers, because employers would still be required to make up the difference for employees to earn $15 an hour."</p>
<p>Those groups agreed to abandon their own measure if the D.C. City Council approves a $15 minimum wage for most (i.e. non-tipped) workers. On Tuesday, the Council approved the citywide $15 minimum wage for non-tipped workers. Under the approved measure, tipped workers will make $5 an hour.</p>
<p>Representatives of labor group Restaurant Opportunities Center (ROC), told Eater the group "will continue to fight for $15." In a statement, the group called the $15 minimum wage enactment "a positive step for many workers in the area," albeit one that was "made on the backs of over 29,000 hard working women and men, and many people of color, in the restaurant industry."</p>
<p>As a representative for restaurant owners in the area, Hollinger says that many of the servers that are members of RAMW make much more than minimum wage. "Servers in D.C. make anywhere from $17 to $66 an hour according to some of our members." She argues that an additional $4.73, per tipped employee, per hour, would be detrimental to a restaurant's bottom line.</p>
<p><q class="pullquote float-left">An additional $4.73, per tipped employee, per hour, would be detrimental to a restaurant's bottom line.</q></p>
<p>If a $15 minimum wage bill is enacted for workers across the board, Hollinger predicts restaurants will "get rid of the tip system, pay all of their servers a fixed, hourly wage, and institute a mandatory service charge — and the house would have say over how that money is used and distributed [i.e servers wouldn't necessarily receive any additional compensation]."</p>
<p>Teo Reyes, the National Research Director at ROC — the group behind the bulk of the Fight for $15 protests — says waiters who earn $60 an hour are few and far between. "At a casual restaurant, tips are not high," says Reyes. "People don't leave big tips at IHOP and Denny's."</p>
<p>He says <a href="http://rocunited.org/wp2015b/wp-content/uploads/2016/05/EliminatingTippedMinWageDC_Report_W.pdf" target="_blank">ROC's studies</a> suggest that, in states where minimum wage has gone up, the results have been overwhelmingly positive. "We looked at growth patterns in D.C., San Francisco, and Seattle," he says. "Seattle and San Francisco have already moved to increase minimum wage and those restaurant industries are thriving."</p>
<p>In states where all workers earn the same minimum wages, Reyes says waiters and bartenders "earn about 20 percent more" than in other states. His study also found that in Seattle, bartenders at the 90 percentile of earnings earn 29 percent more than the same bartenders in D.C. In San Francisco, top-earning bartenders take home 43 percent more in earnings than their counterparts in D.C.</p>
<p>Server Jessica Martin, who also testified at the city council meeting Thursday, moved to D.C. after living in San Francisco, where she said higher wages meant she could go to the occasional movie, pay her rent on time, and even pay off a student loan. "Once I moved to D.C., I was just working as many hours as I could, trying to make ends meet."</p>
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<p>Martin disagrees with the initiative aiming to pay tipped workers $7.50. As a member of the D.C. chapter of ROC, Martin is in favor of the ballot initiative that would institute one $15 minimum wage across the board.</p>
<q class="pullquote float-right">Female tipped workers are "almost three times as likely to live in poverty in D.C." as other D.C. workers.</q>
<p>"It's interesting to me that Mayor Bowser's initiative is called the 'Fair Shot' amendment," says Martin. "Telling a class of your workforce that they're only worth half of the rest of the workforce... there's nothing fair about that."</p>
<p>Minimum wage costs affect a wide swath of people in the service industry — bartenders, dishwashers, restaurant owners, and servers — but perhaps none are more affected by low wages in the restaurant industry than women. According to a new study from ROC, women tipped workers are "almost three times as likely to live in poverty in D.C." as other D.C. workers. <a href="http://www.eater.com/2014/10/8/6941681/sexual-harassment-in-the-restaurant-industry-interview" target="_blank">Sexual harassment</a>, which is prevalent among tipped female workers, further compounds the issue.</p>
<p>Martin says she has dealt with sexual advances from customers, and fellow restaurant workers, nearly her entire career. "In the restaurant industry, female workers are on the menu," she says. "But in a situation where the majority of your money is dependent upon tips, you kind of ask yourself, 'Am I willing to wear red lipstick to pay for my rent?' Usually the answer is that I'm willing to wear a tighter pair of slacks in order to feed myself."</p>
<p>Reyes says <b>ROC has found that workers who earned $2 an hour were much more likely to experience sexual harassment</b> than workers that make a full minimum wage.</p>
<p>"Those who earn tips are twice as likely to experience sexual harassment," he says. "It has to do with this environment with catering to the customers' needs. It's harder to stand up for yourself when you need a tip."</p>
<p>The pattern extends to D.C., where ROC surveyed 50 tipped workers, finding that over 90 percent of them had experienced some form of sexual harassment on the job.</p>
<p>Tipped workers in D.C., says Reyes, live in higher rates of poverty than the rest of the workforce. That's according to estimates from the <a target="_blank" href="http://www.bls.gov/oes/current/oes_dc.htm#35-0000">Bureau of Labor Statistics</a> though, which Hollinger says doesn't provide an accurate estimate, as it doesn't take tips into account.</p>
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<p>Of course, the income of a minimum wage, non-tipped employee, isn't exactly high either. "The median income in D.C. is $110,000. The current wage for a waiter or waitress will give you $26,000 — with the proposed wage, servers will make $31,000," notes Martin. According to the <a href="http://www.bls.gov/oes/current/oes_dc.htm#00-0000" target="_blank">Bureau of Labor Statistics</a>, the median income in D.C. is actually $80,150, with waiters and waitresses earning approximately $27,360 per year. "That's less than one-third of the actual median income of this area. Realistically, asking for $15 an hour is a severe compromise."</p>
<p><b>Update 6/7/2016 2:09 p.m.</b>: This post has been updated to reflect that the D.C. City Council has unanimously approved a $15 minimum wage for non-tipped workers. The tipped minimum wage will rise to $5 an hour by 2020 under the bill. Mayor Muriel Bowser has pledged to sign the bill once it reaches her desk. The bill will raise the wage gradually until it hits $15 in 2020.</p>
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https://www.eater.com/2016/6/7/11786988/minimum-wage-dc-fight-for-15Virginia Chamlee2016-06-02T19:14:51-04:002016-06-02T19:14:51-04:00Restaurateurs Continue to Eye No-Tipping Policies: Survey
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<figcaption>No-tipping pioneer Danny Meyer. | Jamie McCarthy/Getty Images</figcaption>
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<p>Expect to see more restaurants try out the trending service model</p> <p>No-tip restaurants, which often charge higher menu prices to pay their employees higher wages, have been making headlines lately. New York restaurateur Danny Meyer made a splash when <a target="_blank" href="http://ny.eater.com/2015/10/14/9517747/danny-meyer-no-tipping-restaurants">he announced</a> his Union Square Hospitality Group would adopt the model, but the trend seemingly has lost some momentum in the last few months. A recent study <a target="_blank" href="http://www.eater.com/2016/4/18/11450132/no-tipping-study-uc-irvine">indicates</a> cutting tips could actually hurt servers, and Joe's Crab Shack, the first major chain <a target="_blank" href="http://www.eater.com/2015/11/9/9700130/joes-crab-shack-no-tipping-policy">to try the model</a>, has significantly <a target="_blank" href="http://www.eater.com/2016/5/10/11651954/joes-crab-shack-no-tipping">scaled back</a> its trial run.</p>
<p>But, a <a target="_blank" href="http://about.americanexpress.com/news/pr/2016/2016-amex-restaurant-trade-program.aspx">new survey</a> from American Express suggests the trend is still on the rise, <a target="_blank" href="http://www.cnbc.com/2016/06/02/more-restaurants-opting-for-no-tip-policies-survey.html">reports CNBC</a>. Of the 503 United States restaurateurs surveyed, 29 percent said they're planning to do away with tipping at their establishments. Seventeen percent said they would consider it if competitors follow suit, and 10 percent were undecided. Only 27 percent said there's no way they would cut tipping.</p>
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<p><span>Patrick Connolly, owner and chef of Rider in Brooklyn, told CNBC eliminating tips is the wave of the future: "I think tipping is based on an antiquated notion that if one particular person waits on us while we're there eating and the food is really good, we'll take care of them. In a certain type of restaurant, the service is part of the product now."</span></p>
<p>When Bob Merritt, chief executive officer of Ignite Restaurant Group, announced Joe's Crab Shack would cut back it's no-tipping experiment, he said the move was a response to feedback from people on both sides of the transaction: "The system has to change at some point, but our customers and staff spoke very loudly." In the first quarter of fiscal year 2016, Joe's income dropped by 16.2 percent, year over year. That was partially caused by increased labor expenses that resulted from cutting tips.</p>
<p>Another blow to the movement, a study conducted by a UC-Irvine economics professor found restaurant servers often are not the "menial, low-income workers" they're painted to be. "Overall, the various arguments labor advocates make for abolishing tipping are probably well-intended, with the welfare of servers at heart," Richard B. McKenzie said of his study's findings. "The arguments certainly sound good, but they are divorced from the key economic realities of the server-labor and restaurant market economics they have highlighted."</p>
<p>Despite the negative press, Connolly believes it's only a matter of time before restaurants with higher prices and no tipping become more mainstream.</p>
<p>"I think that's just a reflection of where the industry is moving," the chef told CNBC. "Service, uniforms, how they present themselves, the language, the tables — all of those things, it's part of the product."</p>
https://www.eater.com/2016/6/2/11847304/no-tip-restaurants-surveyChris Fuhrmeister2016-05-18T15:00:03-04:002016-05-18T15:00:03-04:00How Restaurateurs in Rhode Island Are Making No Tipping Work
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<p>The debate goes on</p> <p><span>The <a target="_blank" href="http://www.eater.com/2015/10/19/9570295/no-tipping-restaurants-faq">no-tipping movement</a> suffered a major blow when Joe's Crab Shack, the </span><a target="_blank" href="http://www.eater.com/2015/11/9/9700130/joes-crab-shack-no-tipping-policy">first national chain to eliminate tipping</a><span>, announced last week it will </span><a target="_blank" href="http://www.eater.com/2016/5/10/11651954/joes-crab-shack-no-tipping">reinstitute a tipping policy</a> <span>after months of increasing labor expenses and decreasing customer counts.</span></p>
<p>But the zero-gratuity model is proving successful for some restaurants, including one in Providence, Rhode Island: After three months of no-tipping at <a target="_blank" href="http://www.hotelprovidence.com/Eat2/Rosmarin2">Rosmarin </a>and Tarragon Bar at Hotel Providence, owner Alethia Mariotta says the model benefits employees and customers alike, <a target="_blank" href="http://turnto10.com/news/local/providence-restaurant-owner-says-employees-customers-benefitting-from-no-tip-practice">NBC10 News reports</a>. <span>"There are no arguments or hard feelings about who gets scheduled on a Monday, who gets scheduled on a Friday," Mariotta says. "Who has a lunch shift as opposed to a dinner shift? Who has a particular table?"</span></p>
<p><span></span><span>"It does cost more, but I think in the long term it costs less because we have lower turnover," Mariotta told NBC10. "We have happier staff." The Rhode Island tipped minimum wage is $3.39 an hour; under the no-tipping model, Rosmarin employees currently earn at least $10 an hour. One line cook</span><span> says he now earns $12 an hour, a $3 raise over his wages during Rosmarin's tipping days.</span></p>
<p><span>The restaurant switched to a no-tipping service model in February, and started out with a 22 percent administrative fee per table. They've since eliminated that fee, instead raising menu prices across the board (which is the same route that restaurateur and no-tipping pioneer Danny Meyer has chosen to go at his NYC restaurants).</span></p>
<p>And while the no-tipping movement has yet to really go mainstream anywhere, other restaurateurs in Providence are thinking it over: James Mark, owner of three-year-old restaurant <a href="http://www.eater.com/2014/7/1/6199067/the-road-to-the-38-al-forno-in-providence-ri" target="_blank">North</a>, says he hopes to eventually adopt a zero-gratuity model, saying, "Like many folks, I personally believe that tipping is an outdated system that creates strange unspoken power struggles within the restaurant between guests and front of house employees." It may take him some time to figure out how to make such a system work for North, however: "Our biggest hurdle is that our front of house employees would need to be paid $20 to $30 an hour to make what they currently do, which is approximately ten times the state's current tipped minimum wage," Mark says. "Prices would have to go up significantly in order to accommodate that."</p>
<p><span>Rosmarin's owner did not speak to customer counts and satisfaction, which were both major challenges Joe's Crab Shack cited in its decision to revert to tipping. Of course, </span><span>Rosmarin's prices are notably higher than Joe's, with </span><a style="line-height: 24px; background-color: #ffffff;" target="_blank" href="http://www.hotelprovidence.com/var/hotelprovidence/storage/original/application/906f0be704ead3937d7a32efcb8ade9c.pdf">large plates averaging</a><span> around $45 <i>before </i>prices were raised. I</span><span>t seems diners who are already used to footing a higher bill may be more willing to pay the higher upfront prices associated with a no-tipping policy.</span></p>
https://www.eater.com/2016/5/18/11690722/no-tipping-rhode-island-restaurantLina Tran2016-05-10T17:00:03-04:002016-05-10T17:00:03-04:00Joe's Crab Shack’s No-Tipping Policy Isn’t Working Out
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<p>The trial run hasn't been met with much success</p> <p>As the no-tipping movement <a target="_blank" href="http://www.eater.com/2015/10/19/9570295/no-tipping-restaurants-faq">picked up steam last year</a>, Joe's Crab Shack made waves by becoming the first national chain <a target="_blank" href="http://www.eater.com/2015/11/9/9700130/joes-crab-shack-no-tipping-policy">to give the service model a trial run</a>. The experiment hasn't been well received, and the company is mostly pulling the plug, <a target="_blank" href="http://nrn.com/latest-headlines/joe-s-crab-shack-cuts-back-no-tipping-test">reports Nation's Restaurant News</a>. In an earnings call last Wednesday, Joe's announced it will restore traditional tipping practices at 14 of the 18 locations that have been testing the new policy.</p>
<p>"The system has to change at some point, but our customers and staff spoke very loudly," Bob Merritt, chief executive officer of Ignite Restaurant Group, said in the call. "And a lot of them voted with their feet."</p>
<p>Ignite is the parent company that operates Joe's Crab Shack. <span>In </span><a target="_blank" href="http://ir.igniterestaurants.com/secfiling.cfm?filingID=1437749-16-30789&CIK=1526796" style="line-height: 1.5; background-color: #ffffff;">a first-quarter SEC filing</a><span>, it revealed the no-tipping experiment played a role in quarterly labor expenses increasing by 3.2 percent, year over year. Those higher expenses resulted in Joe's income dropping by 16.2 percent compared to the first quarter of 2015. </span></p>
<p>Merritt said the no-tipping locations have seen customer counts drop by 8 to 10 percent, on average. While the policy has been rejected at most restaurants, Ignite will continue to explore ways to implement it in the future.</p>
<p>"We are going to try to figure out why it worked in some places and why not in others," Merritt said. "The way we look at it is: We are really continuing the tests in place with where it works."</p>
https://www.eater.com/2016/5/10/11651954/joes-crab-shack-no-tippingChris Fuhrmeister2016-05-05T16:30:02-04:002016-05-05T16:30:02-04:00Vermont Restaurant Adds Service Charge for Back-of-House Employees
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<figcaption>Waterworks | <a href='https://www.facebook.com/waterworksvt/photos/a.720015684748473.1073741827.717609561655752/936424839774222/?type=3&theater'>Facebook</a></figcaption>
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<p>The tipping war wages on</p> <p>A Vermont restaurant is diving into the tipping debate with the addition of a 2 percent service charge that will go directly to back-of-house employees, <a href="http://www.wptz.com/news/vermont-restaurant-adds-2-percent-service-charge-to-help-kitchen-staff/39386444">WPTZ reports</a>. Waterworks Food and Drink started tacking the additional charge onto customers' checks to work around the hurdle of a federal law that prohibits tip pooling with front-of-house and kitchen workers.</p>
<p>The restaurant's owner and manager, David Abdoo, said he didn't want to raise menu prices and lose a share of the competitive market, but wanted to be sure that his kitchen staff was getting a fair shake. Menus at Waterworks now reflect an explanation of the 2 percent service charge, and employees told the station they supported the change.</p>
<p>This appears to be a middle ground in the industry as some restaurant owners and hospitality groups take a stand against unequal wages by eliminating tipping. NYC-based restaurateur Danny Meyer started <a href="http://ny.eater.com/2015/10/14/9517747/danny-meyer-no-tipping-restaurants">booting the practice </a>from his restaurants, raising the price of menu items instead of adding service charges, much as this Vermont restaurant did. Similarly, in 2014, <a href="http://www.eater.com/2014/12/5/7341743/why-la-chef-zach-pollack-implemented-a-kitchen-tipping-policy" target="_blank">a restaurateur and chef in Los Angeles </a>took matters into his own hands with two tip lines on each receipt, one for the kitchen and one for the front of house staff.</p>
<p><span>Meanwhile, some restaurant proprietors in Ohio continue to stand by the practice of tipping, but </span><a href="http://www.eater.com/2016/5/3/11581542/bad-tippers-restaurant-facebook" style="line-height: 1.5; background-color: #ffffff;">took a social media stand</a> to call out bad tippers. <span>The debate over industry norms rages on, however, as some studies suggest that eliminating </span><a href="http://www.eater.com/2016/4/18/11450132/no-tipping-study-uc-irvine" style="line-height: 1.5; background-color: #ffffff;">tipping could hurt servers</a><span>.</span></p>
https://www.eater.com/2016/5/5/11599782/vermont-2-percent-charge-kitchen-staffDana Hatic2016-04-18T10:35:27-04:002016-04-18T10:35:27-04:00New Study Argues the End of Tipping Could Actually Hurt Servers
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<p>A UC Irvine professor doesn't believe abolishing tipping is a one-size-fits-all solution</p> <p>One of the biggest issues faced by the restaurant industry today is tipping: Namely, should it stay or should it go? Those who want to see tipping go the way of the dinosaurs say tipping is an outdated practice, and getting rid of it will help servers earn a more steady income while also smoothing out the disparity in pay for servers and cooks.</p>
<p>But even as more restaurants are deciding to adopt a zero-gratuity model, surveys indicate <span>American diners</span> <a target="_blank" href="http://www.eater.com/2016/1/26/10835696/diners-against-eliminating-tips-study">aren't ready to let go of tipping</a> just yet, and <a target="_blank" href="http://www.eater.com/2016/1/13/10763280/chilis-restaurants-tipping">neither are many restaurateurs</a>. Now, <a target="_blank" href="http://www.ncpa.org/pdfs/st382.pdf">a new study</a> from an economics professor at the University of California, Irvine argues that abolishing tipping in favor of a blanket "living wage" of $15 an hour could actually be harmful for the very people it's supposed to benefit most: servers, as well as restaurant owners and diners.</p>
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<p>As <a target="_blank" href="https://www.sciencedaily.com/releases/2016/04/160414114708.htm">a press release explains</a>, the study's author Richard B. McKenzie argues that servers actually earn far more than so-called "abolitionists" realize, and are not the "menial, low-income workers" they're painted to be.</p>
<p>McKenzie conducted an informal survey of waitstaff at casual table-service restaurants to find out how they'd feel about foregoing tipped wages in favor of a flat hourly rate; he says "the wage that the restaurant servers indicated would be acceptable was in the range of $30 an hour, not $15 which is the wage rate states are considering," implying that such workers would actually be taking a hefty pay cut if the tipping model was ousted in favor of <a href="http://www.eater.com/2016/4/15/11439648/hillary-clinton-15-minimum-wage-bernie-sanders" target="_blank">$15 an hour</a>. (McKenzie offers anecdotal evidence that some servers under-report their tips to the IRS, which could partially account for the disparity between the low wages tipping opponents cite and the higher pay that some servers actually take home.)</p>
<p>McKenzie also says every server agreed that "if tipping were replaced by a fixed hourly rate of pay, <b>service would suffer significantly</b>," particularly where difficult customers are concerned. (That's an issue that's been raised by many as one of the biggest potential pitfalls of <a target="_blank" href="http://www.eater.com/2015/10/19/9570295/no-tipping-restaurants-faq">a no-tipping model</a>, but it's worth pointing out that there are plenty of other jobs where workers are expected to provide great customer service without the dangling carrot of tipping.)</p>
<p>McKenzie also takes a look at restaurants that have experimented with a no-tipping model and failed, such as San Francisco's Bar Agricole; the restaurant <a target="_blank" href="http://sf.eater.com/2015/10/14/9535081/bar-agricole-trou-normand-bring-back-tipping-san-francisco" style="line-height: 1.24;">reinstated tipping last fall</a> after losing 70 percent of its servers due to a significant drop in hourly wages.</p>
<p>"Overall, the various arguments labor advocates make for abolishing tipping are probably well-intended, with the welfare of servers at heart," McKenzie concludes. "The arguments certainly sound good, but they are divorced from the key economic realities of the server-labor and restaurant market economics they have highlighted."</p>
<p><span>McKenzie doesn't argue against </span>businesses that seem to have found great success with the no-gratuity model, such as <a href="http://ny.eater.com/2015/10/14/9517747/danny-meyer-no-tipping-restaurants" target="_blank">Danny Meyer's Union Square Hospitality Group restaurants</a>,<span> but he does believe that there isn't one solution that will work for all restaurants: "An industry that is as rapidly changing and competitive as the restaurant industry needs to retain as much of its flexibility in service and labor markets as it can ... While some restaurants might find that a 'hospitality included' pricing plan works best for them, it will not necessarily work for others."</span></p>
<p>As the battle for a higher minimum wage continues and politicians such as Hillary Clinton <a href="http://www.eater.com/2016/3/3/11152642/hillary-clinton-tipping-15-minimum-wage" target="_blank">call for an end to tipped wages</a>, the debate over tipping is sure to only get more heated.</p>
https://www.eater.com/2016/4/18/11450132/no-tipping-study-uc-irvineWhitney Filloon2016-02-23T18:39:14-05:002016-02-23T18:39:14-05:00As Minimum Wage Rises, More NY Restaurants Drop Tips for Surcharges
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<p>The surcharges offset increased labor costs.</p> <p>Restaurants in New York may be feeling a pinch after the state <a target="_blank" href="http://ny.eater.com/2015/12/30/10689974/nra-cuomo-wage-plan">raised its minimum wage for tipped workers</a> at the end of last year. Governor Andrew Cuomo pushed through an increase from $5 to $7.50, and now, <a target="_blank" href="http://www.democratandchronicle.com/story/money/business/2016/02/22/belhurst-castle-adds-mystery-surcharge-dining-bill/80770916/">reports the <i>Rochester Democrat & Chronicle</i></a>, more restaurants are doing away with tipping in favor of surcharges to make up the cost.</p>
<p>A recent receipt from a restaurant in Geneva includes an "NYS Labor Surcharge" of $4.32 on a $91 tab. That follows a similar move by a brewpub in Glen Falls, which explicitly banned tipping and instituted a 18 percent surcharge last month. In <a target="_blank" href="https://gallery.mailchimp.com/42a9d322e1aabf3d7934152db/images/598d1e62-6a73-43f7-9948-39355771eb63.jpg">an open letter to customers</a>, the owners of Davidson Bros. Brewing Company said the move was necessary to "provide every employee a fair wage" while "saving our guests over $200,000/year."</p>
<p>These restaurants aren't close to being the first to ban tipping. Union Square Hospitality Group restaurateur <a target="_blank" href="http://ny.eater.com/2015/10/14/9517747/danny-meyer-no-tipping-restaurants">made a big splash</a> by getting rid of tips at his restaurants last year, and Joe's Crab Shack <a target="_blank" href="http://www.eater.com/2015/11/9/9700130/joes-crab-shack-no-tipping-policy">became the first major chain</a> to test the policy. But, those decisions were more proactive than these latest developments. In its open later, Davidson Bros. said the new minimum wage may lead to human workers replaced by computers.</p>
<p>"This unaffordable cost benefitting only some workers is the primary reason an increasing number of restaurants are eliminating tipped employees, in many cases replacing human beings with computers and tablets. "</p>
<p>Last year, <a target="_blank" href="http://www.eater.com/2015/3/16/8227257/robots-fast-food-workers-employees-replace-obsolete">a report from financial services firm Cornerstone Capital Group</a> agreed with the point that employees may be traded in for software and robots at chain restaurants. The report pointed to three key factors: volatile food prices, the consequences of the Affordable Care Act,€” and income equality that is "increasingly a point of social and political contention." It would seem New York restaurants' complaints fall under the third category.</p>
<p>Automated ordering with no person in sight may seem like something out of a dystopian future, but it's already a reality. Many airport restaurants employ touchscreen tablets that allow customers to place orders and pay their checks, as do some national chains such as Panera Bread and Applebee's. Although, that trend hasn't made much of an impact in the non-chain restaurant market.</p>
<p>Regarding the surcharges, as opposed to increasing menu prices, the <i>Democrat & Chronicle </i>notes they appear to be a perfectly legal response to the new minimum wage.</p>
<p>"The [Attorney General] or the Department of Labor may take a different position, but I would be interested to know what the basis would be for saying it's an unlawful charge to make," Joe Carello, an attorney specializing in labor and employment law, told the paper. "I am not aware of any type of litigation involving this [type of issue]."</p>
<p><i>This story has been updated to correct Cornerstone Capital Group's assessment that volatile, not increased, food prices may contribute to a reduction in human labor.</i></p>
https://www.eater.com/2016/2/23/11102044/new-york-state-restaurants-tipping-surcharges-minimum-wageChris Fuhrmeister2016-02-03T15:00:03-05:002016-02-03T15:00:03-05:00Zero-Gratuity Pioneer Danny Meyer Says Tipping Is “Socialist”
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<p>The restaurant tycoon sheds some more light on his anti-tipping stance.</p> <p>Danny Meyer created major shockwaves in the restaurant world last October when he announced <a href="http://ny.eater.com/2015/10/14/9517747/danny-meyer-no-tipping-restaurants">his plans to eliminate tipping</a> across all 13 of his New York restaurants. The Shake Shack founder and CEO of Union Square Hospitality Group is switching to a European-style service-included system with all-inclusive menu pricing, a policy that will let him raise wages for both front and back of the house staffers.</p>
<p>Now, Meyer has voiced the idea that tipping is a "socialist" enterprise. <span>"</span>In most fine-dining restaurants, tips are pooled. So when you leave your $50 tip, you think that you’re giving it to your server, but that server is actually sharing it with everybody who can receive tips<span>," </span><a style="line-height: 1.5; background-color: #ffffff;" href="http://www.nytimes.com/2016/02/07/magazine/danny-meyer-thinks-tipping-is-socialist.html?partner=rss&emc=rss&_r=0"><span>he tells the </span><i style="line-height: 1.5; background-color: #ffffff;">New York Times</i></a> in a new interview.</p>
<p>Meyer's plan to fix this problem, dubbed the <a href="http://www.eater.com/2015/10/19/9570295/no-tipping-restaurants-faq">"Hospitality Included" plan</a>, involves a hike in menu prices and an elimination of the tip line on bills, among other measures, that will elevate the pay grade of back-of-house to diminish the earning disparity across restaurant positions. <a href="http://ny.eater.com/2015/10/20/9571497/danny-meyer-no-tipping-waiters-bartenders">Dining room staff</a>, in turn, will receive a higher hourly wage, plus a share of the restaurant's revenue.</p>
<p>Meyer's empire includes 13 restaurants, ranging from fine dining to more casual pizza and barbecue places. The no-tipping rollout began with <a target="_blank" href="http://ny.eater.com/venue/the-modern" style="line-height: 1.24;">The Modern</a> (one of his more expensive restaurants) in November and should be complete across all 13 by the end of 2016.</p>
<p>Other New York restaurants <a href="http://www.grubstreet.com/2015/12/stulman-eliminates-tipping.html">have followed suit</a>, including <a href="http://ny.eater.com/2015/12/15/10232846/andrew-tarlow-brooklyn-tipping">Brooklyn's Andrew Tarlow</a>, who has now proposed the introduction of <a href="http://www.grubstreet.com/2016/02/tip-free-logo.html#">"tip-free" window stickers</a> to easily identify restaurants that subscribe to the progressive policy.</p>
https://www.eater.com/2016/2/3/10905830/danny-meyer-tipping-socialismDana Hatic