Ad hoc sidewalk patios, reduced capacities and masked servers aren’t the only COVID-related changes at restaurants, especially as parts of the country reinstate indoor dining restrictions due to rises in coronavirus numbers. This past summer, a handful of Toronto eateries implemented hospitality-inclusive pricing. That means their menu prices include tips, enabling employers to pay their staff a full salary.
For the upscale Toronto restaurant Marben, which is currently open for patio service and takeout, owner Simon Benstead saw the pandemic as an opportunity to reflect upon how they could improve their employee pay structure. “It’s revealed how vulnerable our staff are to financial downturns without full access to the social safety net,” Mr. Benstead explains. Since Marben’s serving staff used to receive a portion of their earnings through tips from guests, which do not count toward an employee’s earnings if they need to seek employment insurance, the EI payments they receive would be lower.
So Mr. Benstead, alongside Marben’s executive chef Chris Locke, took the pandemic downtime to reflect upon their current payment practices and determine how to best compensate their staff. They calculated that Marben guests left, on average, a 20-per-cent tip and adjusted staff salaries. They also introduced health insurance in the form of a health spending account that covers many medical expenses and an employee assistance program that offers free access to mental health, financial and legal services. Marben raised it menu prices by about 20 per cent on average and explicitly requests that diners not leave tips.
Marben is one of several restaurants that are overhauling how they compensate staff as lockdowns leave many workers, in an industry that relies heavily on tips, without no or little income or other supports. A greater shift to this model could also help pave the way to the more stable careers in the sector.
Marben’s Mr. Locke hails from Britain and has also worked in kitchens in Australia – both regions that do not have a tipping culture. “Coming here, I found that servers and bartenders see their work as short-term, and not a long-term way to grow themselves into a career in the restaurant industry,” he says. While kitchen staff receive a higher base pay than servers, they typically get a smaller percentage of tips (through tip-pooling, where servers give kitchen staff a portion of their tips.) Despite this, back-of-house workers still earn a lower pay overall compared with servers. “You also see a higher attrition rate for cooks. There’s a huge labour shortage in kitchens. It’s been very, very difficult to incentivize cooks to start a career in hospitality.”
The recent Black Lives Matter protests also illuminated the racist origins of tipping culture, which was popularized in the United States after the Civil War. Newly-freed Black slaves often worked service jobs and were paid a meagre sum by their employers, which forced them to supplement their income with tips from largely white clientele. Race also affects the amount of tips a server receives. A 2014 study from Cornell University found that Black servers earned fewer tips from their white counterparts. “We were developing an anti-racism policy for our staff, and we thought, how do you have anti-racism policy for an industry that has a tipping culture that is built on discrimination?” says Mr. Locke.
Marben isn’t the only restaurant to introduce a hospitality-inclusive model. Prominent Toronto restaurants Richmond Station, Ten and Burdock have also eliminated tipping and raised menu prices in order to create a better social safety net for their staff.
But Michelle Caine, chair of hospitality management at Centennial College, is worried how guests will react. “The concern is, will it be so confusing that I’ll just stop going to that restaurant because I don’t get it?” Ms. Caine says. “Are staff going to be confused? Will they lose staff that go to other restaurants? It’s hard to change a systemic culture if only a handful of restaurants change.”
Should widespread tip-inclusive pricing be adopted, Ms. Caine sees the benefits of creating equity between back-of-house staff and front-of-house servers and bartenders, who receive the majority of tips. At the same time, the types of people that are drawn to work as a server or bartender could change given a more equitable compensation strategy. “I believe it’s the cash portion of the job that makes it really attractive for people with careers outside of our industry, like actors and artists, who want to pick up shifts here and there,” Ms. Caine says.
The restaurant business may then move closer toward serving and bartending as career professions instead of jobs to earn a quick buck. Ms. Caine looks to other regions outside of North America where tipping is not standard. “In parts of Europe, serving is a very highly regarded career,” she explains. “You can’t just walk into the job. You need to know all your wines. You need food knowledge. You need to know what you’re talking about. You can make great money and you can support a family on that.”
But not all restaurants have had to go hospitality-inclusive to offer benefits and more stable salaries to staff. When Donna’s, a Toronto eatery, reopened for patio service, co-owner Ann Kim opted to keep tipping but increase the pay of full-time servers from the liquor servers' minimum wage of $12.20 per hour to an annual salary of $40,000. “The idea was to make it so that people weren’t relying on tips for their main source of income,” Ms. Kim explains. “It would be more of a bonus system.”
Ms. Kim also created parity between full-time pay of front-of-house and back-of-house. In addition, while back-of-house staff already had a sick day policy in place, that has now been extended to full-time front-of-house workers. And all full-time staff at Donna’s had already been offered health and dental benefits which were put into place six months after their November, 2018, opening. “We were really happy that we could provide that, but at the same time, why can’t every restaurant offer that?” Ms. Kim says. “Why is it that our industry is so far behind?”
Once her staff were on a full-time, 40-hour work week, she encouraged them to find other ways to support the business if the restaurant was slow. “We’re finding projects for them to use the skills they have outside of serving. Our front-of-house supervisors are both really great at marketing and creating online content for us,” Ms. Kim explains. “It’s been great to utilize those skills to help drive business as well.” Newly-minted front-of-house supervisor
Vidal Wu admits he was hesitant when he first learned about the new pay structure. He was worried about how changes in taxation may affect his take-home pay. But he’s been happy with it so far. “Having more ownership about our work in the business makes me feel like I’m valued as an employee,” Mr. Wu explains. “I feel like that’s as important as having our wages stabilized. I’m happier at work and I feel more motivated.” Since mid-October, Donna’s has been closed to dine-in guests but servers like Mr. Wu are still helping out with processing takeout and delivery orders.
Both Mr. Wu and Ms. Caine expressed concern about the long-term prospects for the tip-inclusive model, looking to eateries in the states that have adopted the policy. “There have been a couple of restaurants in New York, the Union Square group, where they just stopped it after 10 years. They’re going back to tipping,” Ms. Caine says.
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