A San Fransisco brunch restaurant called Zazie has started offering its employees at least $15 an hour plus benefits by raising menu prices but eliminating tipping.
Menu prices at the eatery rose by about 25%, just a bit above the 20% amount often expected for excellent service at full service U.S. restaurants.
Thanks to this, it pays employees at least $15 an hour and offers everyone paid sick leave, health and dental insurance without any employee contributions, paid parental leave and even a 401(k).
Owner Jennifer Piallat told Upworthy she knows the higher prices might turn away some customers but feels her staff deserves to be compensated for their work.
The restaurant has seen a slight drop in business, particularly during the Sunday brunch rush, but Piallat doesn’t seem phased about it, noting it cuts down wait times for a better overall customer experience.
She also notes that many of those who stopped coming in may not have been the type to tip 20% or higher anyway or simply aren’t doing the math to see the new prices aren’t all that much more once you consider there’s no tip.
Some diners even noted the new menu prices don’t seem unreasonable, especially when considering it essentially includes tip.
In the U.S. many restaurants pay their employees an hourly rate below minimum wage. Once tips are added in, most states require the restaurant to adjust the hourly rate up to minimum wage if the employee didn’t earn that.
However, customer tips often make up the difference and the restaurant isn’t out any more cash.
Often tips are “pooled” and shared among all staffers, meaning that one person’s efforts at earning a higher tip from customers doesn’t necessarily benefit them significantly.
For employees covered under the tipping system, which can include front of house wait staff, bartenders and some back of house workers as well, this can provide financial challenges.
While many restaurant workers are able to make decent money from tips, it’s highly dependent on the venue and evolving social norms around tipping. There are countless stories of diners ringing up hundreds or even thousands of dollars on their bill and leaving no or a very small tip.
Because of this, many restaurant workers who rely on tips have unpredictable incomes, which can make budgeting and saving hard. Eliminating tipping like at Zazie means that employees can expect to know what they will make based on how many hours they are scheduled for.
Proponents of eliminating tipping and passing along higher costs to customers argue that tipping is a way for restaurants to get around the minimum wage “loophole” and that either way, customers still end up footing the bill.
However, others say that tipping should remain optional and reflect the discretion of the customer. They argue that tipping helps encourage harder work and better service and that not everyone should have to pay higher prices.
The restaurant industry was hit hard by the coronavirus pandemic — with thousands of restaurants closing. As restaurants have begun seating eat-in diners again, it’s been challenging to hire and retain reliable staff (something that was already challenging for most in the industry).
Many workers who got laid off from restaurant closers opted to leave the industry altogether and even those who remain are faced with increased risks of COVID-19 exposure and having to essentially “police” safety protocols put in place by governments or owners — a process that can often turn heated and even violent.
Because of this, many restaurants are struggling to find enough staff — with some even having to temporarily close because they simply don’t have enough staffers available to operate.
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