Tipping’s Days May Be Numbered
Oakland’s minimum wage hike prompted more area restaurants to eliminate tipping. Is this the beginning of the end?
Meredith Melville and staff at Bocanova, which imposed a surcharge.
Photo by Heather Finnecy
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Last year, when Bocanova restaurant in Jack London Square added 20 percent to the subtotal of guest checks in lieu of a tip, nearly all the hosts, servers, and bartenders quit. Though not all of them fled right away, the turnover left management scrambling to replace and retrain. Meanwhile, customers complained: via OpenTable, Yelp, and email.
Still, co-owner Meredith Melville believes she and her partner Rick Hackett did the right thing. When confronted with a jump in minimum wage from $9 to $12.25 per hour, they had to do something.
Measure FF, sponsored by Lift Up Oakland and approved by voters in 2014, took effect in March 2015 raising Oakland’s minimum wage. It also raised potentially unintended consequences in the full-service restaurant industry. Employees in the “front of the house”—servers, bartenders, barbacks, hosts, runners, and bussers—generally get a chunk of their pay in tips. In California, these workers also receive full minimum wage, so their hourly take can far exceed that of the kitchen help, or the “back of the house”—line cooks, prep cooks, and dishwashers. Plus, at Bocanova, as at some other Oakland restaurants, back-of-house workers—including dishwashers—were already paid higher than minimum wage, leaving them unaffected by a mandated increase.
Melville had witnessed this growing wage disparity throughout the decades in Bay Area restaurants. As the prices went up, and the average tip percentage went up, so did the servers’ earnings. “Servers could work almost half the hours but take home twice the pay of the kitchen,” she said, “and cooks work really hard.”
The tricky wording in the California law about pooling tips essentially excludes kitchen staff from participating. So Bocanova got creative. Of its new 20 percent charge—as at Jack’s Oyster Bar, which Melville also co-owns—16 percent, called the Lift Up Oakland Surcharge, goes exclusively to the wage of all hourly employees, both front-of-house and back-of-house workers. The remaining 4 percent goes to the individual server or bartender.
A year later, Melville reports that customer complaints are far fewer. One Yelp reviewer found the surcharge system “more civilized” than conventional tipping. Melville is proud of the current staff and believes the system fosters a career path in the restaurant industry.
Allison Hopelain, co-owner of Camino restaurant on Grand Avenue, thinks the days of tipping are over. Though she concedes, “It might take a while.” At Camino, Hopelain and partner Russell Moore had often talked about doing away with tips, and considered it when California’s minimum wage went from $8 to $9 an hour in July 2014. “We didn’t feel the world was ready,” Hopelain said. This time, they didn’t wait. In January 2015, Camino upped prices approximately 20 percent, advertised a “no-tipping system,” and began paying all employees a set rate. The most exciting part was giving raises to back of the house, Hopelain said, for a more “level playing field.” She believes the no-tipping policy adds to the overall sense of teamwork while also providing a predictable wage. And she says it’s more like “normal business.”
The thing is, though, the U.S. restaurant industry has never operated like normal business. Traditionally, servers acted more like entrepreneurs, running their mini business tableside and taking a risk on daily income. A server was part salesperson, part performance artist, part ambassador, caregiver, neighbor, confidante—all rolled into ringmaster, running the show. Extracting the sales and performance elements out of earnings flips that role, and not everyone is interested in the switch.
Career server Jill Ifshin, who waits tables in Oakland and Berkeley, relies on her professional prowess honed from a lifetime of experience. She worries that receiving a set wage or a portion of a surcharge might dampen the incentive to excel, saying, “It gives everyone an award just to participate.”
But many Oakland restaurants appear to have raised their prices to counter higher labor costs, and restaurants without tipping clearly represent a minority. Tracey Belock, co-owner of Chowhaus in Montclair, considered adding a surcharge to her prices but decided to forgo it. Despite feeling “spread too thin,” she said, “It was best for us—to keep great staff—to take the hit ourselves.”
Last summer, 113 Oakland businesses—including 29 designated “food service”—participated in an online survey conducted by Sepi Aghdaee, a graduate student at Mills College Lorry I. Lokey School of Business and Public Policy. Results of the study suggested that the minimum wage hike affected food service businesses more than other industries; and overall, minimum wage was not identified as the “biggest challenge faced” for doing business in Oakland.