Debate over the minimum wage and income disparity has created growing tension in the restaurant business about how to pay workers—namely, how to handle tips. America’s culture of tipping servers—the standard is now 25 percent in some markets—means that waiters in upscale restaurants are making far more than those in the kitchen who prepare the food, according to a talk at the Food & Wine Classic in Aspen.
The tipping system has been the target of some criticism recently, and some restaurants are trying to do away with it. A panel of restaurateurs and cooks featuring Barbara Lynch (of the Barbara Lynch Gruppo), Michael Chiarello (Coqueta, Bottega), Jonathan Waxman (Barbuto), and Danny Meyer (Union Square Hospitality Group) discussed problems with the current tip system at the event.
There’s a need, Chiarello said, to balance pay better for talented young cooks making near minimum wage with some of his waiters who are now earning $90,000 a year, as tips can total $250 a night. The Seattle Times reported that in the first quarter of 2014, tips added an average of $31.50 an hour to a server’s paycheck at at El Gaucho Hospitality. While servers are rewarded for exceptional service, cooks end up making less “to make their food great every time,” Chiarello said.
Meyer—who tried to eliminate tipping years ago until his servers rejected the idea—pointed out that just as customers may unfairly penalize their servers with a bad tip if the food isn’t satisfactory, they may also reward them when the food exceeds expectations—both things the waiter does not control. So the tips don’t correlate with what’s actually going on at the restaurant.
Recent state-level changes in the minimum wage (which will be $15 an hour in Seattle)—while benefiting untipped workers, for example, in fast food—are forcing restaurant owners to reconsider how all their workers are compensated. Chef Waxman said it doesn’t make sense for a server in one market to earn a minimum of $15 an hour before tips, and one in another market to get $2.13, the federal minimum for tipped workers.
Here’s a video of the event. The discussion about tips starts at 59:10.