lansbury

A guy in Portland who owns several bars and restaurants is opening a new one. He is in the process of renovating the property and apart from the fact it will have 99 Oregon beers on tap, it will be a non tipping establishment. Prices will be adjusted to cover for the staff being paid a proper wage. An example he gave was beer would be a $1 a glass higher than other Portland bars.

He was on TV and went on to say in other places the servers with tips average $30 an hour. But dishwashers and others only make minimum wage, so I guess tips are not shared. In the new place everyone would get above minimum with servers getting $18 an hour. My first thought was he is going to have a line for the other jobs, but if servers are making on average $30 with tips and he is paying $18 he will struggle to get good ones.

I will certainly go eat there and be happy to pay a higher price and not have to tip. But I wonder if there will be sufficient employees willing to embrace the new non tipping era.

Michael

Recently there has been several restaurants in the news that have become no tip restaurants.

Why some restaurants are doing away with tipping - The Washington Post

However I can see some problems with no tip restaurants. Often there are certain days and hours that are busy where waiters make a large amount of money on tips. Often those are the times that waiters wouldn't want to work (Friday and Saturday nights) but instead vie for those hours to make a large amount of tips. During those hours, they have to work very hard and probably take a lot of abuse from customers and management but they are compensated by the large amount of tips they receive.

With no tip restaurants, waiters will then likely try to work the easy shifts during days that they would want to work and if they have to work the hard late Friday and Saturday night shifts, they will likely look elsewhere for a job that has an easy shift.

When a waiter is paid a fixed salary, I can imagine many will start complaining about being overworked just like most people do in most jobs. When waiters are on tips, waiters make sure that tables are ready as quickly as possible but with no tip, more customers means just more work. When I lived in Europe, just trying to get the bill often took 15 minutes or more but in the US, the bill comes as soon as you put up you hand since the waiter wants the table cleared to get more customers.

Pulaski

As he has other bars and restaurants I suspect he may turn his "no-tip" establishment into a gateway to jobs in other locations. Prove yourself in the no-tip restaurant and then move up to a tipping location.

Michael

I suspect that is what basically happens in tip establishments. New hires probably get the worst shifts where tips are low but if they prove themselves to be quick, efficient, and please customers, they get promoted to better shifts where tips are higher.

username.exe

I'd be interested to see how the customers react to this.

Would the average American be comfortable with finishing their meal, paying the bill and departing the restaurant without leaving anything for the server?

RoadWarriorFromLP

This will fail, as the no-tip places here usually do. The net costs will be higher (with an extra dollar tacked on to the price of each drink, the cost of a round at this place will be more than it would be with standard pricing plus a tip), the best staff will go elsewhere, and the owner will be tempted to manage his costs by maintaining a lower level of staffing, further compromising the service.

Michael

When I was living in Switzerland, a waiter claimed that his restaurant took 15%-20% of the bill and paid the staff that worked those hours from that plus a salary. It was supposed to incentivize the staff but you still had to say garçon a half dozen times to get the waiter's attention.

Pulaski

I find the quality of service in restaurants highly variable, despite the almost uniform tipping expectation. The trick that this restaurateur has to pull off is to keep service standards within the normal range (I would say above the 25% restaurants with the poorest service, at least). Given that he already apparently has several bars and restaurants, I am going to assume that he knows his market and knows what he is getting into, especially in the Pacific NW where minimum wage issues have been getting lots of publicity.

Michael

He may also think he can save money by doing that. The Oregon legislature is considering raising the minimum wage to $15. By now paying waiters $18 and other staff $15, he may think he will get a head start by basically paying an inevitable raise of minimum wage to $15. This may be his test restaurant to see if he gets away with it. Sometimes things aren't as they seem.

$15 minimum wage gaining traction at Oregon Legislature

In Oregon there isn't a sales tax but if a restaurant did the same in California, the consumer would pay sales tax on the added charge where now they don't pay sales tax on tips.

scrubbedexpat091

Not sure a no tip place would work here. Owners love the low wage they pay and wan't customers to make up the difference. Serving wage is 1.25 or so below the min. wage.

Fast food however is not exempt from min. wage so they pay at least min. wage, but in most area's closer to 11-13 per hour as they can't find reliable workers or anyone at min. wage.

Part of the reason why fast food is not much cheaper then a chain burger place, only 1-2 dollar difference. Typical combo at Mcd's is 8-10 dollars.

Pom_Chch

Here in New Zealand there is no tipping. All hospitality staff are paid minimum wage or above (about $15NZD/hour+). I've always thought the notion of paying staff a poor wage with the expectation to be topped up by the customer (regardless of quality of service) quite tight fisted by employers and unfair on the customers. Strange method of doing things and I can see why some establishments are thinking differently now.

Michael

Waiters that are making $50-$100 per hour on a busy night or when someone orders an expensive meal with expensive wine don't think the system is bad. If there was a poll of waiters, I suspect the majority would rather have current system since they are guaranteed minimum wage if their tips plus salary isn't at least minimum wage but can make a lot more on a good night.

Pom_Chch

But what about the waiters on the flip side of that? I wonder how many there are of those waiters you mention vs how many waiters who are just serving drinks behind a quieter bar not making much in tips. I guess that would all depend on where you are in the country, type of establishment, days you are working etc. Of course if you work in a high end bar, club or restaurant on a Friday or Saturday night then you're gonna be laughing. I'm guessing it will be a different story for those working in a quieter place at less busy times.

Pulaski

A good part of the problem is that while someone might make $50-$100/hr for three hours on Friday and another four hours on Saturday, they might only work for 20 hours all week, or even less. So a high hourly rate doesn't necessarily translate into a particularly good income. It is great if you only want part time work, and can cherrypick the "high yield" hours, but otherwise not so much.

BEVS

No tipping? A sweeping statement & one that is simply not true. Tipping is at 10% .


I will also state here that $15 NZD is a very poor wage. However many NZers find themselves in these circumstances, working all hours and certainly do hope for tips and perks to help them survive financially.

In NZ there is a surcharge on these types of services for bank holidays and the like. It is stated it is to cover the cost of bank hol payment to staff. In reality ? ..............


edit to add.....

...actually it has made me feel quite cross as I know plenty that live from less than hand to mouth on NZD $15. It misrepresents the actual. They have to put in stupid hours , at any time to try and make a living wage. At least in hospitality there is the chance to improve on the wage via tips if you prove to be good at your work. In other occupations we call it a performance based bonus scheme.

For those not in the know. Within hospitality and I spent a large part of my life and so did my parents working in this area, 'tips' do filter down. In simple terms , you place them in a communal box and they are divided out to ALL staff.

The NZ system is exactly like the UK system in the way it works.