Slate | By Jay Porter
For more than six years, I ran a restaurant without tips.
A couple of years after opening the Linkery restaurant in San Diego, the team and I adopted a policy of adding to each dining-in check a service charge of 18 percent—a little less than our tip average had been. We also refused to accept any payment beyond that service charge. (If someone surreptitiously slipped a twenty or two under a water glass, we donated it to a rotating “charity of the month,” usually selected by a staff member or patron.)
We made this change because we wanted to distribute the “tip” revenue to our cooks as well as our servers, making our pay more equitable. Servers and cooks typically made similar base wages—and minimum wage was the same for both jobs—but servers kept all the tips, which could often mean they were taking home three times what the cooks made, or more. In California at that time, it was illegal to distribute any tip money to cooks. (Recent court rulings in the Western U.S. have loosened that restriction somewhat). By replacing tipping with a service charge, we were legally able to redirect about a quarter of that revenue to the kitchen, which reduced the income disparity and helped foster unity on our team.
We had considered just incorporating that charge into the cost of each menu item, but we decided that it was easier for consumers to understand our pricing if we kept it analogous to that of a tipped restaurant. In a similar vein, we applied the service charge only to dining-in checks, since tipping is not yet a firmly established social norm for takeout. We used this service charge as a substitute for tipping from 2006 until we closed the restaurant this year to move to San Francisco.
When we switched from tipping to a service charge, our food improved, probably because our cooks were being paid more and didn’t feel taken for granted. In turn, business improved, and within a couple of months, our server team was making more money than it had under the tipped system. The quality of our service also improved. In my observation, however, that wasn’t mainly because the servers were making more money (although that helped, too). Instead, our service improved principally because eliminating tips makes it easier to provide good service.
Read the rest of this article on the Slate: What Happens When You Abolish Tipping?
What is your opinion on this system? Would you like to see this done in all restaurants or do you think it would hurt servers and their income in the long run?