No-tipping trend now at more restaurants, with mixed results
PORTLAND, Ore. — When the bill comes after a meal, there's no crunching numbers for the tip — just pay and go.
A small but growing number of restaurants are doing away with the tipping model that's long been the norm in the United States. It's an effort to even disparate pay among restaurant staff and offer them more predictability, as well as a means to cope with rising minimum wages and other industry changes. While restaurants that have eliminated the entrenched practice have seen mixed results — and some ended up abandoning the experiment — a number of restaurants are still trying it.
"Primarily we wanted to take the reins of compensating our employees," said Andy Fortang of Le Pigeon in Portland, Oregon, which eliminated tipping in June.
Le Pigeon raised its prices an average of 20 percent and now compensates workers with a mix of base pay and a percentage of the night's food and beverage sales. Cooks, dishwashers and other "back of the house" employees got a slight pay increase, and waitstaff, bartenders and other "front of the house" staff took a small cut, but everyone shares in the success of a busy night.
"The staff in our restaurants are well-trained, intelligent individuals and they are passionate," Fortang said. "It seems fair they be paid an award for that, instead of just leaving that to someone who may or may not leave a tip."
Some restaurant owners see tipping as a flawed system. Aaron Adams, who owns the no-tips Farm Spirit in Portland, says it creates a "weird dynamic" between the customer and server. His hope is to keep raising pay so his staff can support their families and buy homes.
Tipping also creates a pay gulf between restaurant staff. Researchers at Cornell University and Ohio State University found that in large metro areas, the median weekly wages of front-of-house employees exceeded those of back-of-house employees by 29 to 80 percent. At fine dining establishments, where the gap is largest, that means a median of $792 versus $441.
Servers in some states also contend with laws that let employers pay less — sometimes below minimum wage — and allow tips to make up the difference.
But minimum wage hikes began to raise restaurant expenses and threatened to widen the pay divide by increasing the base wage for tipped workers. A chef shortage grew more severe. And for several western states, a court upheld a federal rule that prohibits tip-sharing among all staff members, which used to be commonplace.
Only a handful of U.S. restaurants have adopted the no-tipping model, the National Restaurant Association says. It hasn't always been a success.
Thad Vogler of Trou Normand and Bar Agricole in San Francisco did away with tips at the beginning of 2015 but brought them back 10 months later because he kept losing staff to competitors that did allow tipping. Joe's Crab Shack, a national chain, reduced its no-tipping experiment from 18 restaurants to four after a poor response from customers and staff. Robert Merritt, CEO of parent company Ignite Restaurants, said the system needs to change, but "customers and staff spoke very loudly and a lot of them voted with their feet."
Still, Union Square Hospitality Group, which owns Gramercy Park Tavern and other restaurants in New York, is eliminating tipping at all its properties by the end of 2016 and said thus far guests have largely received it well. And a handful of notable Portland restaurants announced plans this summer to adopt the model, based on the success of restaurants in Brooklyn and Los Angeles.