Recently we implemented an 18% service charge in lieu of traditional tipping to more equitably distribute gratuities to our entire team, many of whom have been completely divested from the pandemic. It was a policy we aimed to implement for some time, and the current environment made the decision inevitable as we saw an already broken system cast an even brighter light on the inequities. As a team we firmly believe in this direction. We are pleased to share here the thinking and background that brought us to this point. We appreciate your support and business and thank you for allowing our team to move forward on a brighter path.
For a long time restaurants have been places of inequitable pay where the people who serve the food earn significantly more per hour than the people who cook it. This is especially true in Oregon where servers make the full minimum wage as opposed to a reduced wage as is the case in most other states (in some cases lower than $3/hr). Make no mistake, we are glad Oregon does not have a “tipped wage,” and we are also glad that Oregon is raising its minimum wage. The increase in the minimum wage, however, further exacerbates the already glaring pay discrepancy between tipped and non-tipped workers. It is different in every restaurant, but in a full service environment servers make $20 to $35 more per hour than their kitchen counterparts. The difference has become so great that tipped employees often make more as per hour than the managers who supervise them. The work is all similar, equally challenging and stressful, and it requires strong communication and teamwork. The overall guest experience results from the collective talents and hard work of every person working within it the restaurant – whether guests see and interact with that person or not.
The demographic differences between tipped and non-tipped workers is fairly stark. For the most part immigrant workers and employees of color tend to be in non-tipped positions while U.S.-born employees with more education tend to be in the tipped roles. Because of the higher pay tipped workers receive they have opportunities to work less hours and attend school, be home with family and take care of their health while many non-tipped workers work multiple full-time jobs daily to make ends meet. The system keeps back-of-house workers in a stagnant, unhealthy cycle while promoting the advancement of their front-of-house counterparts.
No one in these positions now had anything to do with creating this system, and in fact our team is committed to seeing a change. Restaurants as businesses are incentivized by the federal government to maintain the status quo. To encourage restaurateurs to train their tipped employees to report tips, the government gives all restaurants a generous tax credit on the tips servers report. Restaurant owners win, tipped employees win and back-of-house workers receive the short end.
Over the years we’ve made small changes to mitigate the inequities, but it all remains duct tape on a broken system. Much of the issue falls in the legal treatment of discretionary tips. By law a discretionary tip belongs to the server. After all the rules were made at a time when a tipped employee made a lower-than-low wage and the government wanted to ensure their tips were protected. It was sound policy at a time when the hourly base wage difference between a server and a cook was large. As certain states like Oregon move away from the traditional restaurant pay structure, however, the federal policy now only serves to memorialize a restaurant system that leaves the most vulnerable among us behind.
To take a big step forward in changing this system requires a pivot in thinking and some sacrifice from us all. Our tipped employees are willing to step into an unknown system, the restaurant is willing to forgo a large tax savings, and we’re asking our guests to embrace a different way of thinking about tipping. Going forward we will be placing a 18% service charge on each check in lieu of the traditional tip. Between the service charge and the price of food and drinks, that pool of resources allows us to distribute everything to all of our team members in a more equal fashion. Our servers will make an hourly wage higher than what Oregon’s minimum wage is climbing to plus a commission on their sales. Our back of house employees will share much more significantly in the resources of the business, increasing their hourly pay and reducing the pay gap between positions.
While we expect nothing more than what is on the check guests still have the option to leave more if they feel it warranted. Any tips beyond the 18% service charge go entirely to the server. Just as we never expect guests to pay for food they do not enjoy, the same is true for the service. We hope you continue to provide us with feedback on your experience and allow us to correct any missteps. We’ve always been committed to proving you with an exemplary experience of the highest quality, and to us that starts with ensuring our full team is being compensated fairly and provided with equal opportunity to live an all around healthy life. The pandemic has been near catastrophic for us like so many others, and if there is one bright spot it is the opportunity to emerge having left behind a system that even further exaggerated that devastation for such a large chunk of our workforce. Thank you for supporting us and other local businesses that support our community in return. We are grateful to have your business.