No-tipping policies at US eateries prompt delight- and tragedy

While ditching perquisites in Portland and elsewhere has entailed less judgment, angst and rage at some establishments, others have watched staff member quit

When clients of Portlands upscale Le Pigeon receive their credit card slip-ups, the line has been removed where the tip-off would normally be scribbled in. Co-owned by Gabe Rucker, a chef and recipient of two James Beard awards, the French-inspired bistro threw out tipping in June, while costs have increased by about 20%. Servers are now paid an hourly wage as well as a share of revenues, similar to a commission, and wages for cooks have gone up.

Le Pigeon is just one of many restaurants in the US to end tipping in the past year. Its a bold experimentation in a country where tipping is so heavily embedded in the culture and it has met with mixed results. But at Le Pigeon it seems to have worked at least for the staff.

The hope was to professionalize their jobs and make their method of compensation more in line with nearly every other profession out there, said Andrew Fortgang, co-owner and general manager of the Oregon restaurant.

Fortgangs sentiment echoes those of a number of high-end restaurants on the west coast along with handful across the country and several locations in New York City that have ditched tipping at their establishments in favor of a more sustainable model.

In October, Danny Meyer, restaurateur and CEO of Union Square Hospitality Group, made headlines when he did away with perquisites at his restaurants to shrink the income gap between servers and cooks.

While front-of-house employees at fine dining establishments can make hundreds of dollars per night with tips-off, kitchen staff often make less than $20 per hour.

Adding insult to injury, a February court ruling determined that employers within the ninth circuit states including Washington, Oregon and California can no longer require employees to share their tips-off with the back of house, such as cooks and dishwashers, in what is called a tip-off pool.

[ The end of] tip-off pooling was a great driver as to why people are thinking about going with no tips-off, said Scott Dolich, proprietor of Park Kitchen in downtown Portland, which get rid of tipping in July.

Oregon is one of merely seven countries Washington and California among them that dont have a tip-off credit, which requires employees to use a portion of their tips-off to offset minimum wages.

So as the minimum wages climbs towards $15 per hour in west coast cities and tips-off are no longer circulated among the back of the house the income disparity between servers and cooks will be momentous.

To rectify this, Dolich has devised the one house model at Park Kitchen. Its a gratuity-free policy which has eliminated a distinction between the front and back of house. He has cross-trained his employees servers now cook and cooks now serve and they all work full hour for $15 per hour, with no tips-off, but full benefits and paid time off.

We knew it was going to be a tough trade-off, said Dolich, who lost several employees during the transition. Yet the establishment had now been become more efficient, he said, and runs with a tight squad of 11 people who encompass a snug 39 -seater space.

At first it was a little weird, but the wage increases have worked out really well, said cook/ server Chris Hannemann, who aims up constructing the same sum he did elsewhere.

In lieu of tipping, menu costs at Park Kitchen have increased by 18% to 20% to maintain its profit margin but in the end, clients will end up paying the same amount.

Park Kitchen regular LaValle Linn fully supports the One House system. Employees should not have to depend on tips-off to make a living wage, she said. We as a country need to rethink that. Linn also said clients of the gratuity-free model might go through withdrawal, because theyre used to monetarily penalizing or rewarding their servers.

Nixing the tip-off has gained momentum in the US through the pop-up scene, which takes the form of supper club, food trucks, chef counters, and special events in makeshift spaces. The vast majority of pops-up run with merely a kitchen and no servers.

The rustic-chic Farm Spirit offers a gratuity-free chef counter where customers preorder tickets between $60 and $80 to enjoy a multi-course vegan menu. Tacked on to the price of the meal is an 18% standard fee.

I suppose tipping generates a really weird dynamic in my restaurant where customers feel like theyre hiring my employee, said chef and proprietor Aaron Adams. At Farm Spirit, all employees are cooks who also polish silverware, fold napkins, serve dishes and pour wine for a salaried $48,000 a year.

Since Jennifer Bennett Piallat went gratuity-free last summer, her San Francisco bistro Zazie has watched a lot less judgment, a lot less paranoia, angst and anger.

Piallats employees are paid hourly plus a percentage of sales which she said incentivizes a good work ethic much like a tip-off and receive health insurance, a 401 K, paid vacation, sick leave and maternity/ paternity leave. When she made the switch, every one of her employees stuck with her.

By removing tipping, Piallat said, shes also removed racism and discrimination, much of it on the part of her faculty. Everyone thinks that the servers are being judged, but the servers are judging as much, or if not worse, said Piallat.

Yet a no-tipping policy has proved to be a disaster for some who have tried to stay ahead of the minimum wages trajectory.

Thad Volgers Bar Agricole and Trou Normand in San Francisco reverted back to tipping after nine months of being gratuity-free. Even with readjusted wages, bussers and runners felt they were under-compensated and eventually quit, which set strain on the hiring managers.

I suppose I was naive to expect people to stay when they could go somewhere else and do the same job for more money, said Volger, who still believes in a tipless model, but said he would have to raise his costs by 40% to make it work.

Sour Beurre Kitchen opened as a tip-free French place in San Franciscos Mission, but a little over a year later, it shut its doors.

Portlands Loyal Legion beer hall tried no tipping for four months and paid its employees $18 per hour. But it didnt work, said proprietor Kurt Huffman, because servers and bartenders ended up taking a massive pay cut. I suppose the restaurants that are trying out no tipping are going to come to regret it, he said.

Huffman also found that his clients still tried to leave tips-off, even when they were told not to. Guests prefer to leave something. Its part of American dining culture, he said.

That may be true in some cases.

Restaurant-goer Lucas Jushinska was looking to get a table at Le Pigeon, but said after eating at gratuity-free restaurants in his native Seattle, the new model has rubbed me the wrong way. If the service remains outstanding, then it doesnt matter. But if I get poor service, I dont have any recourse.

According to research by Michael Lynn, prof of consumer behaviour and marketing at the Cornell University School of Hotel Administration, most people tip not based on service, but because they feel guilty and obliged. He also found that 53% of clients liked the idea of higher menu costs where tipping is not permitted.

So could no-tipping policies eventually reach the realm of the American franchise? Its doubtful. Joes Crab Shack switched over to a gratuity-free model in 18 of its locations last year and opted to pay its front of house faculty between $12 and $14 per hour. But the chain reversed its decision the following spring after employees and clients carried their antipathy of the policy.

Lynn concluded that the more a restaurants servers are overpaid relative to the back of house and the wealthier a restaurants clients are the more a restaurant should consider abandoning tipping.

Le Pigeons Andrew Fortgang surely assures it that way. I think in five to 10 years nearly all fine dining restaurants will be there.

Le Pigeons sister restaurant, Little Bird, will eliminate tipping by the end of the year. Two more establishments the renowned tapas eatery Navarre and the Italian restaurant Luce, both owned by chef John Taboada are committed to going gratuity-free soon.

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