You may have seen the signs on tip jars: “Tipping," they say, "is not a city in China."
It's not even a policy in China. Or in much of Europe. Nor in Latin America, according to Marco Franca, executive director of Posto 9, a Brazilian gastropub slated to open in Florida in December.
Months before opening, Franca knows Posto 9's servers won't live on tips. Instead, all employees will be salaried and receive health, dental, vision and life insurance through the company. They'll also get performance-based incentives. Franca hopes it will slow turnover, a huge problem in the restaurant industry.
Franca says it's a commonsense approach. The traditional restaurant practice of tipping “is destined to die," he says.
A recently released Restaurant Trade Survey says 18 percent of restaurant operators have already adopted the no-tipping trend, with 29 percent saying they plan to follow suit.
Restaurateurs like Danny Meyer have eliminated gratuities for a variety of reasons. For starters, the model subjects server's pay to the whims of customers.
Not all diners have been receptive. Joe's Crab Shack tested out a no-tipping model last year, but recently ended the practice. Company representatives said 60 percent of their customers believed it eliminated incentive for good service.
But Franca says believes that if you prioritize the needs of your employees over those of your clients, then your employees will take care of your clients for you.
So does Alethia Mariotta, owner of the Tarragon Bar and Rosmarin restaurant at Hotel Providence in Rhode Island, who instituted a no-tipping policy in February.
“We believe this is the future of hospitality," she explains.
At both Tarragon and Rosmarin, menu items cost a flat fee, inclusive of labor, tax and other service-related costs. All employees make an hourly wage, and a bonus structure adds incentives for servers.
Feedback from customers has been generally positive. But not every guest understands most servers make a tipped minimum wage, which can differ from state to state.
Mariotta says the practice takes the guesswork out of dining, since customers don't need to calculate gratuity. It also lessens the risk for servers, who could walk away with nearly nothing on slow nights, and levels the playing field for all restaurant workers.
“Often what people don't understand about the tip system is that it's grossly unequal to the people in the back of the house... the people who are actually making the food," Mariotta explains. These workers often log long hours yet take home far less cash than servers.
Equality is high on the list of reasons Andrew Hoffman eliminated tipping at his Berkeley restaurant Comal in 2014. His other restaurant, The Advocate, opened in August 2015 with a no-tipping system.
Hoffman says it's important to chip away at the wage discrepancy between kitchen and service staff. “We didn't think our restaurant would be sustainable in the long term with a wage gap continuing to grow," he says.
“We strongly believe the restaurant industry will go through a lot of change in the next several years," he says. “If new restaurants from day one begin to implement this principle, this is going to catch on like a tsunami."
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