Leaving a Tip: A Custom in Need of Changing?
At Sushi Yasuda, a 40-seat Japanese restaurant in Midtown Manhattan, owners include the cost of service in the price of the meal.By PETE WELLS
Try one of these techniques if you want better service in restaurants:
1. Become very famous;
2. Spend $1,000 or more on wine every time you go out;
3. Keep going to the same restaurant until you get V.I.P. treatment; if that doesn’t work, pick another place.
Now, here is a technique that is guaranteed to have no effect on your service: leave a generous tip.
I’ve tipped slightly above the average for years, generally leaving 20 percent of the total, no matter what. According to one study, lots of people are just like me, sticking with a reasonable percentage through good nights and bad. And it doesn’t do us any good, because servers have no way of telling that we aren’t the hated type that leaves 10 percent of the pretax total, beverages excluded.
Some servers do try to sniff out stingy tippers, engaging in customer profiling based on national origin, age, race, gender and other traits. (The profiling appears to run both ways: another study showed that customers tended to leave smaller tips for black servers.)
I could go on against tipping, but let’s leave it at this: it is irrational, outdated, ineffective, confusing, prone to abuse and sometimes discriminatory. The people who take care of us in restaurants deserve a better system, and so do we.
That’s one reason we pay attention when a restaurant tries another way, as Sushi Yasuda in Manhattan started to do two months ago. Raising most of its prices, it appended this note to credit card slips: “Following the custom in Japan, Sushi Yasuda’s service staff are fully compensated by their salary. Therefore gratuities are not accepted.”
Sushi Yasuda joins other restaurants that have done away with tips, replacing them with either a surcharge (Atera and Chef’s Table at Brooklyn Fare in New York; Next andAlinea in Chicago; Coi and Chez Panisse in the San Francisco Bay Area) or prices that include the cost of service (Per Se in New York and the French Laundry in Yountville, Calif.).
The chef Tom Colicchio is considering service-included pricing at one of his New York restaurants, paying servers “an hourly rate that would be consistent with what they make now,” he said. “I think it makes perfect sense. I’m not sure my staff is going to think it makes perfect sense.”
These restaurants are numerous enough and important enough to suggest that a tip-reform movement is under way. On the other hand, they are few enough and exceptional enough to suggest that the movement may remain very small, and move very slowly.
Americans have stuck with tipping for years because all parties thought it worked in their favor. Servers, especially in restaurants from the mid- to high-priced, made good money, much of it in cash, and much of that unreported on tax returns. Owners saved on labor costs and taxes. And customers generally believed that tips brought better service.
The self-interest calculation may be different now. Credit card receipts and tougher oversight have virtually killed off unreported tips.
Another change is cultural. The restaurant business can be seen as a class struggle between the groomed, pressed, articulate charmers working in the dining room and the blistered, stained and profane grunts in the kitchen. The rise of chefs that are also owners has brought a few of the grunts to power. But as the average tip has risen to 20 percent or so from 15 percent, the pay for line cooks, dishwashers and others has stayed low.
At Coi, in San Francisco, Daniel Patterson, the chef and owner, levies an 18 percent service charge to be “shared by the entire staff,” the menu notes. One of his motives was to level out the income disparity that tipping creates between the kitchen and the front of the house, he said.
“Neither one is more important than the other,” Mr. Patterson said. “So it doesn’t make sense to me that servers would make three to four times as much as cooks.”
A second change has been howling outside the door. Front-of-house workers are suing one respected restaurant after another, including Dovetail, last month, accusing them of playing fast and loose with the laws on tips. The charges include sharing tips with workers who aren’t eligible for them and making tipped employees spend too much time on what is called sidework, like folding napkins between meals.
One such lawsuit was settled for more than $5 million. Some owners now think they can avoid the suits by eliminating tips.
“You abide by the letter of the law and do a service charge,” said Nick Kokonas, an owner of Alinea and Next. “That’s the only way you can take that income and spread it out to the staff.”
Restaurants that move to a surcharge or service-included pricing pay much more for labor, losing a sizable payroll-tax credit on tipped income.
Still, Mr. Kokonas said: “It’s worth it, because as soon as you grow to a certain size these days, and you’re high profile, everyone starts examining what you do. It’s not good enough to say, ‘These guys are making $100,000 a year and they’re treated really well and they have full health care.’ That’s irrelevant. It’s ‘Did they get paid overtime for their sidework?’ ”
Mr. Kokonas’s restaurants and others call the extra fee a service charge. The term is misleading if the money goes to workers who don’t serve, and lawyers warn that in New York State, that would be illegal.
Justin Swartz, a partner at Outten & Golden, a law firm that represents employees, says that in New York State, the fee should be called something like an administrative charge, or rolled into menu prices.
Even that won’t make restaurants entirely lawsuit-proof, particularly if some customers insist on tipping anyway. “You’re right back to square one,” said Carolyn D. Richmond, a lawyer at Fox Rothschild who advises many prominent restaurateurs. This summer, after consulting her and running the numbers, David Chang decided against service-included pricing for his Momofuku restaurants in New York.
“It’s a change in legislation that we need, and a change in the American diner’s view on tipping,” Ms. Richmond said. “And that’s even harder than changing legislatures.”
But the diner’s views may be changing. This is in part because restaurants like Per Se have taken the lead, but also in part because those lawsuits have corroded our faith that our tips will go where we want them to.
Even if we believe the argument that workers’ lawyers are going after technical violations of archaic, Depression-era laws, they have brought to light a major peculiarity of the restaurant business: they depend on tips to make their payrolls. The temptation to treat that money as general revenue can be hard for some to resist.
Since the suits began, “people think restaurants are just hoarding that cash,” Mr. Chang said.
But forget the cheats; the suits have also reminded us that many employees share our tips. So, if we leave 10 percent to signal our unhappiness with our server’s tone of voice, we may be hurting other workers, from the host who seated us by the window to the sommelier who suggested that terrific Sicilian white, to the runner who delivered the skate while it was still hot. How much longer can we insist that it’s our privilege to decide whether we want to pay these people?
“A service charge and a salary brings the profession back into the bright sun of the professional mainstream, instead of the murky half-light in which restaurants used to exist,” Mr. Patterson said.
He is a true believer, but he can’t convince everybody. In 2010 he tried an 18 percent service charge when he opened Plum in Oakland, Calif. Perhaps because Plum was less expensive and more casual than Coi, diners rebelled, and he dropped the charge.
The new system may not be right for customers at value-oriented places like Plum, at least for now. But it’s time for all of us who go out to eat to think twice about our habits. Tipping doesn’t work, and it doesn’t feel very good anymore, either.
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