When Kristen Kilty and Kathleen Taricani-Hickey opened The Cormorant in Newburyport in December, they were committed to a radical policy: “No tipping required.” Their intent was to simplify bills for customers, and to make certain that every employee — the wait staff and kitchen staff — was paid above minimum wage.
“We did this so that our employees had an idea of what their paycheck would look like, so they could count on their pay and they could live their lives accordingly,” said Kilty.
Kilty and Taricani-Hickey represent the changing face of the restaurant business. They knew their biggest challenge would be the industry’s ongoing labor shortage.
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“How do you hire staff members? How do you keep them?” said Taricani-Hickey. “We thought if we create sustainability for our staff, then we’re creating a more holistic solution. We would retain them, and that would produce better service.”
They had also heard the doubters, who claim they can earn wages far exceeding the minimum wage of $15 with the traditional tipping model. “We’ve had people tell us, ‘I can make way more money being a waitress,’” said Taricani-Hickey. “And you can.
“But there are only so many high-end restaurants in Newburyport, or on the North Shore, or in Massachusetts,” she said. “They’re not going to have a winning day every day, 365 days a year. That’s not reality.”
Others argue that a 20 percent tip ensures good service. Kilty disagreed. That attitude, she said, implies “that the server works for the customer versus the server working for the restaurant.
“I want to think that every person that I put on the floor is going to give the best service,” said Kilty. “It diminishes them as a human being when they say, ‘I’m only going to work hard for you if you give me a good tip.’”
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The Cormorant’s “no tipping required” policy is clearly advertised on table-top displays. All employees earn between $17 and $20 an hour, and full-time employees accrue paid time off. They don’t currently have health care coverage through work, though Kilty said: “We definitely hope to get there. That’s part of the plan.”
Server Isabella Sollazzo, a 23-year-old from Haverhill, said she’d “love to see the industry adapt, becoming more career-based, including shifting from a tipping model to a no-tip model.
“Personally, getting paid a ‘regular wage’ does not affect my service,” said Sollazzo, who makes $20 an hour at The Cormorant. “I want to work for places that are highly regarded, where going above and beyond to make sure the customer enjoys their time is an expectation, not an overachievement.”
Tipping is as American as apple pie. It’s also the reason that restaurants can pay wait staff and bartenders the “tip wage,” or “alternative minimum wage,” an hourly rate ($6.75 as of Jan. 1) far below the state’s minimum wage of $15. State law requires employers to make up the difference between the alternative minimum wage and the $15 hourly minimum wage if tips fall short, so every employee is guaranteed at least $15 an hour.
Stephen Clark, president and CEO of the Massachusetts Restaurant Association, said his organization supports whatever tipping or fee model works best for each individual restaurateur. But the organization’s website notes that a survey “of tipped employees from industry publication Upserve determined that 97 percent prefer the current model of base wage plus tips over straight hourly compensation.”
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“We still see value in having a tip wage in a full-service restaurant,” said Clark. “Those employees who are tipped are the highest-paid in the restaurant. So we don’t want to see a change in that model.”
State law also prohibits tips earned by wait staff and bartenders from being “pooled” or shared with kitchen staff, who are paid at least the $15 minimum wage. That’s led to the growing implementation of “kitchen fees” — typically 3 percent to 7 percent — earmarked for the back-room staff.
Those fees, though well-intentioned, haven’t been well-received. In an informal poll on the North Shore Eats Facebook group, administrator Greg Bates reported that 13 percent (110 voters) supported the fees, while 87 percent (686 voters) didn’t. One member complained that his tab now “looks like a Verizon bill.”
Matthew Soleyn of Nashua works in Boston and dines out often. He said the fees “are causing way too much confusion.”
“They should just account for the costs of running the business in the prices they put on the menu,” said Soleyn. “Often the fees aren’t very clear, sometimes only being noted in fine print on menus or on some sign on the door.”
At restaurants applying a surcharge, patrons should only tip on the total cost of food and drinks, removing state taxes and additional fees from the equation, said Jodi R.R. Smith of Mannersmith Etiquette Consulting in Marblehead.
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“Historically, tipping in the United States was for low-paid service jobs,” said Smith. “The tip was to [incentivize] the worker to behave politely and appropriately in order to secure a larger tip. There is a myth that ‘TIPS’ was an acronym for ‘To Insure Prompt Service.’
“There’s been a very slow trend in the hospitality field to have no-tip restaurants,” she said. “There are some major benefits. No tipping allows management to smooth the divide between front and back of house. No tipping treats the wait staff as skilled professionals.”
Another option is the “administration fee” or mandatory service charge. Joshua Lewin and Katrina Jazayeri, co-owners of Juliet in Somerville, and Rachel Miller of Nightshade Noodle Bar in Lynn, add a fee of 20 percent on each bill, in lieu of a tip. That fee allows restaurants to sidestep the law that prevents sharing tips “under any circumstances,” said Lewin.
Customers can still leave a gratuity even if no tip is required, or if their bill includes an administration fee. “Many customers find it part of the entertaining experience to give great tips to a great server that made their day,” said Bates. Kilty and Taricani-Hickey said any tips collected at The Cormorant are shared equally among the staff, based on hours worked.
Whether a restaurant has a no-tipping policy, or an administration fee, both alternatives provide customers cost certainty, said Lewin. And employees in those restaurants have wage certainty, said Taricani-Hickey.
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“We’re in this interesting economic movement right now, where we understand that skilled labor needs it’s own dignity,” she said. “Whether that’s a cook or dishwasher or house server, it’s not necessarily the job of a high school teen anymore. It’s the business owner’s responsibility to figure out how to navigate that.
“Change needs to happen. We’re pushing it forward. We’re taking less profit so we can pay it forward to our staff.”
Brion O’Connor can be reached at brionoc@verizon.net.