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California Fast Act: What You Need to Know

Jan 03, 2023

One million signatures stopped a new law affecting fast food workers starting January 1 in California. The Fast Act, or Assembly Bill 257, is a law that was signed on Labor Day by the governor of California, Gavin Newsom. The idea behind the Fast Act is to give fast-food employees more input regarding how they work, when they work, and for how much. The act constructed a council of 10 individuals to decide important work conditions such as hourly wages, benefits, working hours, and more.

 

What is The Fast Act?

 

The AB 257 bill aims to support the rights of fast food workers in California. It “was designed to give fast-food employees a seat at the table.” The council can change the minimum wage, raising it from the current $15 per hour wage to $22 in California. Restaurants defined as quick-service, with a minimum of 100 or more locations are the only ones directly affected by the Fast Act. Besides determining how much quick-service workers will be paid in California, the council decides on the work hours, and the environment they will work in.

Fast Act 2023

 

Why is There Opposition To The Fast Act?

 

Support for the Fast Act law is widespread, as shown by the petition signed by 1 million fast food workers and business owners. However, the concern of those who don’t support implementing the Fast Act is fear that the raised wages will increase inflation even higher. California has already seen higher food costs and the rising wages will increase the costs further.

 

San Francisco saw a 10 percent rise in food costs, with a 9 percent increase for food away from home. Save Local Restaurants said any more added costs on food would majorly affect individuals already fighting against inflation costs resulting from the pandemic.

 

Who Are Save Local Restaurants Group?

 

Save Local Restaurants consists of individuals from “small and family-owned businesses, minority-rights groups, workers, consumers, your favorite restaurants, taxpayers and community-based organizations” who are against passing The Fast Food Bill. Group members organized what they call on their website a coalition focused on redirecting the decision of Assembly Bill 257 to give the California voters the right to decide. Save Local Restaurants includes a compilation of three groups; the National Restaurant Association, the U.S. Chamber of Commerce, and the International Franchise Association.

 

The Projected Future

 

Due to a last-minute decision by the courts on Friday, December 30, a hold of the Fast Recovery Act has been issued to determine if the signatures signed in opposition against the assembly bill 257, or The Fast Act are valid, which, if they are found to be, would let the issue become a voters decision. It would move forward, going on the 2024 ballot.

 

It is expected that the signatures from the petition will be verified, putting the issue at a standstill until 2024, which is exactly what Save Local Restaurants wanted when first filing the referendum. The petition is said to have well over the required 600,000 amount of signatures needed, topping out at one million.

 

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Creative Ways to Hire for Your Restaurant

Aug 22, 2022

Post-COVID lockdown, restaurants are building popularity and once again becoming a place of relaxation and fun. To build the business to previous levels, restaurants are trying new menus, phone apps, and customer incentives. However, what they’re missing is the staff. They’ve survived waves of COVID surge, periods of lockdowns, and political turmoil, but restaurant workers are scarce and in serious demand. After losing their jobs during the first wave, many restaurant workers relocated, changed positions, or left the industry altogether. With the restrictions lifted, staffing has become the number one priority for restaurants across the country, said CNN.

Looking to Gen Z

Both local and chain restaurants have made it their mission to staff their establishments adequately. It’s been a challenge, but some new ideas have proven to be effective. Restaurants must be creative when hiring new staff, especially with the influx of Gen Z workers hitting the job market.

According to Forbes, Gen Z values jobs with higher wages, flexibility, equality, similar core values, and mental health resources. It’s no surprise this generation is looking for meaning in their work (as is, likely, most generations), and businesses are tailoring their hiring process to entice them to come on board and stay on board.

One Connecticut restaurant hired high school students through a program called Scholars Making Dollars, said Business Insider. The students get mentorship through the program while holding a part-time job within the restaurant. The same restaurant also hires employees from neighboring states and provides them weekend housing while working. Family members of the restaurant drive the employees in on Thursday and back on Monday. This helps the restaurant and the workers in New York who may have been having trouble finding jobs, said Insider, since many more restaurants closed in New York than in Connecticut.

 

creative ways to hire

Entice Potential Hires

Another way to entice employees is to incentivize them with bonuses. According to the Spokane Journal, a Washington state-based restaurant has been recruiting new employees through referral bonuses for existing employees. Anyone who brings in an employee, whether a friend, family member, or former worker, the restaurant will dole out $200 should the candidate get hired and stay for 30 days. If they stay 90 days, the referring employee receives another $200.

In Miami, a coffee shop got creative by starting to hire current customers, reported the New York Times. Since they already like the business and they’ve seen it in action, owner Camila Ramos has hired employees who were day traders and a former real estate agent. Discovering different pools of professionals might help gain employees for your business who are looking for new experiences and have unique skills to bring to the table. Ramos has, in the past, unflinchingly required three years of experience for her coffee shop but has now shifted expectations to hire valuable workers who may need more training.

Not a last-ditch-effort idea, but certainly a creative one is throwing a hiring party, which is exactly what Taco Bell did in 2019. The parties offered free food, on-the-spot interviews, and employee tuition discounts. They gathered close to 75 in-person applicants and over 300 online applicants just in their Indianapolis location, said CNN.

The workforce has changed dramatically since the pandemic and may continue. Workers are looking for jobs with more meaning and a healthy work/life balance. Restaurant owners can ride the wave with them, keep up with trends and offer the same sort of treatment, wages, and care that they would want from a job.

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Restaurant Unionization: the State of Unions and Restaurants in 2022

Aug 13, 2022

Since their inception, unions have been somewhat controversial, and laws surrounding them vary from state to state. In certain industries, unionization has become commonplace–in educational and protective service occupations, roughly a third of workers are unionized.

Unions have not been as common in restaurants, but they’ve been around since 1891, when the Hotel and Restaurant Employees International Alliance was founded (now called Unite Here.) This historic union’s total number of food service employees is still relatively small, with around 100,000 current members. However, recent developments have paved the way for more unions in the restaurant industry. Here’s what employers need to know about restaurant unionization in 2022.

Union Approval and Membership in Restaurants

As of 2021, a Gallup Poll identified that 68 percent of Americans approve of labor unions, which is the highest the approval rating has been since 1965. However, according to The US Bureau of Labor Statistics (BLS), union membership remains relatively low as of 2021 at 10.3 percent. Union membership is even lower in the food service industry–only 1.2 percent. That said, certain high-profile cases of unionization in the food service industry may be changing future expectations for workers and businesses alike.

What is the incentive for workers in the food service industry to form a union? According to the BLS, union membership in a restaurants is correlated with higher wages. In 2020, nonunion restaurant workers earned a median weekly income of ​$580, while those in a union earned more at ​$690​ per week. Additionally, labor unions typically seek health insurance, pensions, paid leave and other benefits commonly afforded other types of workers for their members.

Unionizing Workers in the Fast-Food Industry

This past December, the Burgerville chain out of Portland, Oregon, became the first fast-food workers’ union in the US. The franchise chain employs 800 people in Oregon and Washington. Their new labor contract called for financial changes such as 75 cents more an hour and allowing workers to receive tips. Beyond that, it provides paid vacation and parental leave, a three-month set schedule, and a lengthier justification process for firing an employee. This is the first fast-food chain in America to cover its employees with collective bargaining.

On July 22, workers at a local Chipotle Mexican Grill filed a petition for a union election with the National Labor Relations Board, becoming the first Chipotle in the U.S. to seek labor unionization. Since Chipotle owns its restaurants, workers there can join together across stores and state borders to build power and force the company to negotiate with the them,” Maine AFL-CIO spokesman Andy O’Brien said. In response to the union formation move of these Chipotle workers, Chipotle Chief Corporate Affairs Officer Laurie Schalow said, “we respect our employees’ rights under the National Labor Relations Act and are committed to ensuring a fair, just, and humane work environment that provides opportunities for all.” If other restaurants follow the lead of this potential union restaurant, it could be a significant development not just for Chipotle, but other national chains and restaurants in the fast-food industry. Although, workers at some restaurants – like McDonald’s – would have more trouble forming a union as parent corporations of franchised restaurants are less likely to be considered joint employers due to a 2017 National Labor Relations Board ruling.

Starbucks Unions Gaining Traction

Around the same time as Burgerville, certain Starbucks locations have seen some movement towards unionization. Two stores in the Buffalo area became unionized at the end of last year. (A third attempted but failed to do so.) In its hometown of Seattle, two more stores are in the process of trying to unionize.

unionization of Starbucks

 

In early December, while voting was still in progress for the Buffalo stores, Starbucks’ CEO Kevin Johnson came out with a message that said to employees “There is only one Starbucks,” pushing back against the inconsistencies that unionization could create for the brand. Despite this, over 30 Starbucks locations are trying to unionize at the moment.

 

Future Implications of Unions in the Restaurant Industry

At the moment, unionization is still pretty small. That said, other employees could look to employees at Starbucks or Burgerville as examples. While Burgerville has seen some substantial policy changes, the changes at Starbucks are still taking shape. Since unionizing, one Buffalo store has already exercised its right to strike, demanding more advanced COVID-19 protections.

If workers at more Starbucks locations and other national chains successfully unionize, restaurant owners may need to consider a future with unions in it. In the meantime, it might be helpful to know if you are in a right-to-work state, which gives less power to unions. If you aren’t, you may also want to familiarize yourself with the extent of collective bargaining laws.

The industry landscape may be changing, but if restaurant owners approach these changes with a level head and legal knowledge in mind, they should be prepared for whatever the future brings.

Look to Synergy for up-to-date news on restaurant labor laws, information, restaurant staffing, training, and technology.

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New Restaurant Laws and Regulations to Know in 2022

Aug 13, 2022

COVID has changed a lot within the restaurant world. As of 2022, there are many new laws and regulations.

Recent Health Regulations

With the recent new variant and surge in COVID cases, the Occupational Safety and Health Administration (OSHA) issued a new standard to employers with 100 or more employees as of  November 5, 2021. First, vaccination is strongly encouraged to protect unvaccinated employees from the risk of COVID-19 infection. Next, employers must establish a COVID-19 vaccination policy for all employees. Each employer could approve a policy offering their staff to either get vaccinated or have regular COVID-19 tests and wear a face covering while at work. This new standard requires restaurants to implement these safety measures.

 

safety measures

 

While OSHA’s new standard applies to all restaurants covered under their jurisdiction, other changes for 2022 have been mandated in individual states.

State Food and Health Laws

In Texas, the legislature approved a bill for on-premise restaurants with a wine and malt beverage retailer’s permit to be issued a food and beverage certificate by the commission if the receipts from alcoholic beverages at that location are 60 percent or less of total receipts. This does not apply to food concessions in sports stadiums or convention centers. It applies to a permittee that operates its own permanent food service facility with commercial cooking equipment on its premises. Economically, serving alcohol may be a wise choice to bolster sales in the face of these restaurant regulations.

A new law about food delivery apps has been amended in the Business and Professions Code in California. In the state, it is now unlawful for a food delivery platform such as DoorDash or Uber Eats to accept tips and gratuity intended for restaurant workers. Food delivery platforms must be transparent and disclose an accurate, clearly marked, and itemized cost breakdown of each transaction. This breakdown is to be provided to the customer and the food facility to regulate the growing app-based food-delivery industry and ensure the employees of restaurants receive the tips intended for them.

food delivery laws

In New York, a 2022 vaccination mandate has been passed. Anyone who wants to work or attend any restaurant establishment in the state must now show acceptable proof of vaccination. This includes documented evidence of completed vaccination at least two weeks before the visit. Any person 12 years of age or older must produce either a CDC vaccine card, a photocopy or digital photo of their vaccination record, or an uploaded image of the vaccination record on an approved mobile application such as NYC COVID Safe App, Clear Health Pass, or Excelsior Pass. Children ages 5-11 must be vaccinated with at least one dose of a COVID vaccine to visit restaurants and other places of business.

In Chicago, restaurants are only able to provide customers plastic utensils, napkins, and similar items upon request. This 2022 local law does not apply to drive-thrus, airports, charity food giveaways, and self-service stations. The ordinance is one of several ongoing legal regulations aimed at reducing waste of single-use plastics in city restaurants.

According to Food Safety News, 45 bills related to food freedom were introduced – 9 of which were enacted into law. The majority of these bills loosen the regulations imposed on both producers and consumers. In South Carolina, SB 506 (Act No. 208) passed and amended the home-based food production law, allowing non-potentially hazardous food to be sold online or via mail-order directly to retail stores and consumers. In Maryland, the annual cap on revenue for cottage food product operations was raised to $50,000. In Tennessee, the state legislature enacted two laws, which shall allow vendors of homemade food to sell without licenses or permits. The purpose of these state regulations is to enhance the freedom of consumers to access homemade foods and foster small business growth. The Georgia state legislature enacted the Georgia Raw Dairy Act. The Indiana state legislature enacted a bill that allows the sale of poultry, eggs, and rabbit by any individual vendor or business that has the proper farmers’ market permit.

There are more restaurant laws and regulations to be aware of for 2022. Whether you are  business owner, employee, or guest, you should make themselves aware of these new changes in state law and local public health ordinances. Regulations in the food service industry are always changing. Your business can stay one step ahead of your public heath department by implementing top-notch food handler training and staying current with the latest in food service sanitation. Follow Synergy on social media and explore our online resources to discover the latest restaurant news developments and tips of the trade.

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TikTok: What Restaurants Need to Know

Feb 08, 2022

TikTok is becoming the fastest-growing media app with no signs of decreasing in popularity anytime soon. While some brands didn’t take it seriously at first due to its light-hearted origins, more food establishments have embraced it since the beginning of quarantine as an opportunity for an advertising and PR presence. In 2020, Dunkin Donuts announced a partnership with TikTok star Charli D’Amelio and added a new menu item called “The Charli.” For Super Bowl 55 in 2021, Chipotle used TikTok  (this article is from 2020 not 2021, so would be Superbowl LIV use roman numerals rather than regular numbers) in a never-before-seen way to interrupt traditional forms of advertising and reach its users throughout the game.

 

While TikTok is great for promoting hype, it’s also an easy way for negative posts about a brand to spiral out of control. Recently, Starbucks fired an employee after making viral TikToks about dealing with demanding customers. Similarly, a recent TikTok trend encourages fast-food workers to expose bad practices in the industry. What should the owners and managers do when a restaurant is called out in a negative TikTok?

 

Do Not Respond Publicly

Unless you have a PR team working with you full-time, it’s not wise to get into a public debate. This could quickly turn into a flame war. While it can be challenging to resist, do your best to respond to negative TikToks with radio silence.

 

Reach Out Personally

Reach out to the person who posted the content in person. See if you can work with them to have them remove it. Be careful about responding to them online, as screenshots could be used against you.  Listen to their concerns. Sometimes employees air grievances over a public channel because they want to feel like their concerns are being validated. Go over social media guidelines for your place of employment and determine if they violated them. If so, consider whether you want to give them a warning or terminate them, but also keep in mind that this could create even more online negativity for your brand.

 

restaurant workers
What are your restaurant’s social media policies?

 

Create a Positive TikTok Presence for Your Brand

Now more than ever, restaurants and other brands embrace the platform and create their own TikTok presence. Combat some of the negativity with positive buzz about your brand. If you create an authentic following and engage with your audience, you will be more likely to have an online community that will go to bat for you if negative rumors emerge.

 

Consider Protecting Your Brand By Editing Commenting Settings

Though many brands have been unsure of how to deal with TikTok’s commenting feature, there are certainly options to be aware of. Consider disabling commenting on specific posts or requiring approval of comments before allowing them to be posted. While some may criticize this as inauthentic, it’s helpful to know in a crisis.

Prevent the Problem Through Employee Training

More businesses are developing a social media contract for employers to sign while onboarding. By signing this contract, the workers are made aware of the consequences of posting negative comments about a brand. If they go against this agreement, they should know what to expect. Beyond the fine print, be sure to reinforce these policies in a restaurant training program. This training will make all social media policies and expectations clear to your entire team.

 

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Why Restaurant Training in 2021 is More Important Than Ever

Feb 05, 2021

The National Restaurant Association released a bleak report last week confirming what many in the industry already knew: 2020 was the most challenging year restaurants have ever experienced thus far.

More than 110,000 businesses closed (at least temporarily), and 2.5 million restaurant jobs were lost since the start of the pandemic.

With these staggering facts in mind, it may be hard for some restaurant owners, managers, and employees to remain optimistic. That said, it has also been a time of incredible resilience, where restaurants found ways to pivot their business models in revolutionary ways. Some incredible innovations have become popular during the pandemic: everything from dining in heated igloos to food delivery robots.

As the COVID-19 situation is evolving, businesses have had to adapt to a moving target. That’s why now more than ever, restaurant training is essential for employees to stay in the game.

 

Taking Part in the Takeout Revolution

The COVID-19 pandemic has more than doubled business for mobile delivery apps, including GrubHub, UberEats, and DoorDash. Experts speculate that people are more willing to pay a delivery fee when they perceive their safety is at stake. That said, mobile apps take a large cut of the sale—anywhere from 15 to 30 percent on average. As a result, some restaurants are beginning to offer their own delivery apart from preexisting apps. A restaurant training program can help train delivery staff for their expanded duties, ensuring better results and happier customers.

 

Staying Sharp with Technology

With surging demand for contactless ordering, restaurants have had to integrate technology into their business models, whether that was part of their original concept or not. Many restaurants have installed self-serve kiosks or apps for patrons to order food. Beyond that, some restaurants are rolling out robotic sanitizing devices or even self-dispensing salad bar robots. Restaurant training programs can help keep staff knowledgeable about the ins and outs of changing technology. Continuing education and training can help staff learn how to troubleshoot common issues with these tech items.

 

Keeping Up with ABC Laws

Early in the pandemic, states had to make emergency adaptions to their ABC laws to keep alcohol-serving businesses operational. This included some states beginning to allow takeout and delivery of alcohol, among other changes. Now that more places are open for on-site or outdoor dining, additional changes have occurred. Some restaurants that previously only had indoor dining had to create outdoor spaces for food and alcohol consumption. With a training program, employees can stay up-to-date on the latest ABC laws and avoid fines or other issues that come with violations.

 

A Safe Return to Restaurants for Hungry Guests

Consumers are looking forward to getting back to restaurants when things return to normal. In an end of year survey conducted by IFIC, 27 percent of respondents said the one thing they most looked forward to was worrying less when dining out, and 23 percent shared they are excited to visit restaurants more often.

“Coop Rules” at The Crack Shack

 

That said, most of the public isn’t ready to go “back to normal” yet. In Axios-Ipsos, around 62% of Americans ranked dining inside a restaurant as a moderate to high risk to their health. That number remained relatively steady from September to October, after being slightly higher in the pandemic’s earlier months. Only 9 percent of Americans ranked it “no risk at all.”

Nevertheless, some may consider inside dining much less risky once they have been vaccinated. This means that an activity that once produced anxiety to the majority of the population will be able to bring comfort and joy once again, and it may be safe to conclude that Americans will be eating out more than ever, making up for lost time.

When customers feel ready to return to restaurants, they will likely do so in droves. As empty tables become filled again, a subscription-based restaurant training program like Synergy Sync can help get your staff ready to maintain safety and professionalism as the number of restaurant patrons grows exponentially.

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Is Your Restaurant Ready for Another Minimum Wage Hike?

Sep 11, 2018

In January the minimum wage in California is going up another dollar an hour! In Arizona, the start of 2019 marks a fifty cent increase in minimum wage. The harsh reality is that when this happens everyone’s wages get impacted. If you plan to pay a dishwasher $11.00/hour which will most likely be $12.00/hour (because you can’t find anyone to do that job for minimum wage), then you’ll need to pay a basic prep cooks $14.00-16.00/hour!  Everyone’s wages will need to go up. What’s a restaurant operator to do? They can’t just absorb the increase, but instead will have to pass it on to the customer by raising menu prices.

California Minimum Wage Across Cities and Towns 2018

Year 1-25 employees 26+ employees
2017 $10.00 $10.50
2018 $10.50 $11.00
2019 $11.00 $12.00
2020 $12.00 $13.00

Source: SwipeClock

Restaurant operators tend to get very nervous when they have to raise menu prices as it often leads to declining guest counts and consumers going to other restaurants to find a better value. How can a restaurant cope, let alone thrive in light of such challenges? Instead of blindly increasing menu prices, it is crucial a restaurant investigates other facets of their operation that are underperforming. Are you overstaffed? Is your menu too complicated? Is your kitchen optimized for cooking?

 

It’s not too early to get a head start to a profitable 2019.  As efficiency experts, Synergy Restaurant Consultants can find real solutions through innovative menu and labor optimization strategies. Synergy provides Productivity Assessments to analyze staff levels, understand labor performance and implement best practices that optimize operations, slash labor costs and boost productivity.

For the last 30 years Synergy has helped hundreds of independent restaurant operators along with regional and national restaurant chains improve the productivity of their staff:

As the founding partner I promise you this:  if you engage us for a Holistic Operations Assessment

  • We will make you money
  • We will save you money
  • We will improve the overall financial performance of your business
  • We will help you to improve the overall  execution of your food, beverage and hospitality strategy

Dean Small

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Seattle Restaurants Face New Challenges on Hiring and Scheduling

Oct 12, 2016

A so-called secure scheduling law will take effect July 1, 2017 for Seattle retail, fast food, and full service restaurant businesses. At this time, Seattle and San Francisco are the two cities in the nation to adopt this predictable pay type of law.

 

What are the key factors?

  • The law is meant to provide better estimates of hours an employee is expected to work
  • Employers are mandated to post employee’s work schedules 2 weeks in advance before a shift – if hours are added or subtracted, employers must pay a certain amount to employee to compensate (there are exceptions)
  • Employees have the right to request a schedule that allows them to balance their other commitments and they have a right to decline any hours that were not posted on the original schedule
  • Employers are required to keep three years of records to show compliance of the law

 

More here: http://www.seattle.gov/laborstandards/ordinances/secure-scheduling

 

Who does this apply to?

  • Retail and fast food businesses with 500+ employees worldwide;
  • Full service restaurants with 500+ employees and 40+ full-service restaurant locations worldwide.

More here: http://www.seattle.gov/laborstandards/ordinances/secure-scheduling

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California’s Minimum Wage Increase

Mar 31, 2016

Today, California Gov. Jerry Brown’s goal to increase the state’s minimum wage to $15 is a reality– as just this Monday a deal was reached between Brown and state legislators and was the measure passed on Thursday. This makes California the first in the United States to approve a statewide $15 minimum wage.

 

Under the measure, minimum wage would be gradually increased up until Jan. 1, 2022. New York Gov. Andrew Cuomo is also following suit for his state, pushing for $15 minimum wage in his latest budget. For full details click here.

 

While this news proves to be a victory for labor unions and many workers, it goes without saying how large of a negative impact the hike will have on restaurants. For example, hiring, employee hours and menu prices may all be affected in order to maintain the wage increase.

 

At Synergy, we implement strategies to help restaurants during these uncertain and stressful times. Please contact us to learn more about our programs.

 

Photo credit: The All-Nite Images license CC by SA 2.0

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The Tipping Point:  5 Things to Consider in the Debate over Restaurant Tipping

Nov 24, 2015

 

By Mandy DeLucia, Synergy Project Coordinator

 

Labor costs are rising and savvy restaurateurs are reevaluating their labor models.  Ever since hospitality guru Danny Meyer surprised the industry with an announcement about moving to eliminate tipping in his restaurants, the industry has been discussing the merits and pitfalls of a tip-free system. We have outlined five important factors to consider as you formulate your own opinion on the debate.

 

1.) Fine dining is better suited to the “service-included” model.

Restaurants with higher prices could have an easier transition away from tipping because customers may not be as sensitive to an added 18% gratuity charge or a 20% increase in prices. As the fast-casual sector continues to thrive, customers are growing used to an experience where they participate in some way in the service model in exchange for a high-quality meal with no tip expectation. Value-focused customers have moved away from casual dining, where mandatory tipping makes the bill more expensive. But in a fine-dining setting, a shift in price from a $30 steak entrée to a $36 one is unlikely to have a negative impact on traffic—provided the guest experience remains positive.

 

 

2.) Moving to a salary model will require a shift in employee evaluation and training procedures.

The tip system minimizes the need to evaluate servers and give them raises. Of course, operators always evaluate servers to ensure they’re doing a good job, but the tip, and not an annual raise, provides that incentive. Similarly, servers are driven to deliver drink refills or offer friendly and hospitable service by the direct reward of a good tip. In a tipless system, management will have to consider giving workers annual raises and pay close attention to overtime, given that they’d be responsible for paying even more in wages if their staff works more than 40 hours per week. As restaurants move to higher wages, the cost of benefits will be higher too. And if tip policies go away, restaurants will also have to reinforce training that encourages servers to deliver good service at all times, regardless of the tip reward.

 

3.) Just because it works in Europe doesn’t mean it’s right for the U.S.

Some will argue that restaurants in Europe don’t rely on tips and yet the system works. However, in the U.S., our system is different and it is not an easy comparison. In order to fully understand the complexity of that assessment, one would need to compare factors such as payroll policies, labor costs, rents, taxes, costs of goods, hours of operations, holidays, employee benefits vs. publicly provided benefits in European nations, even cultural habits and dining times.

 

 

4) Changing technology is impacting the way people tip.

With the shift of liability for fraud forcing restaurants toward using integrated POS systems with EMV chip capabilities, restaurants are finding that the new system is impacting payment processes. EMV handheld readers must sync with POS systems, but transactions can no longer be processed away from the customer. With chip-and-PIN cards, tipping will have to be processed before, not after, the customer pays the bil, which will mean that the server will be nearby while the tip is being decided. With the rise of tablet-based payment systems for smaller or independent operators, guests paying by card are being offered tip options of 10%, 15% or 20% at the time of purchase or must opt-out of tipping completely to finalize a purchase. This can add a layer of discomfort to the transaction as it happens under the gaze of the beneficiary of that tip.

 

 

4) Tipping as a portion of compensation supports small businesses and facilitates start-ups for independent operators.

Of course, management in the restaurant business would like to pay their staff more, and would like to compensate back-of-house employees as well as servers, whether through improved benefits, recurring bonuses, profit-sharing, stock options or real wages. However, small increases on a daily basis hit hard and fast when multiplied out over a number of employees with a number of shifts per week over the course of a year. Small operators can offset labor costs to customers through tipping, which subsidizes an extra $5.12 to tipped workers (the gap between the minimum required rate for tipped workers vs. minimum wage). Tipping also allows servers the opportunity to exceed an hourly rate, rewarding good service but also helping busy restaurants recruit hospitality talent through the prospect of higher earnings.

 

5) Eliminating tipping could result in better food.

In restaurant cultures where tips aren’t part of the business model, line cooks normally make considerably more than waiters. The U.S. has a system that prohibits servers from sharing tips with cooks, dishwashers, and other staff who do not interact with customers. By adding a service charge to every check, operators could help close the divide in restaurants between the tipped and the non-tipped—a change that could benefit staff and customers alike. The checks may get a little bigger, but if a happier, better-compensated staff is making the food a little tastier and bringing the wine a little faster, everyone wins.

 

Remember, too, that a no-tipping model can also lead to better service. As this article in Restaurant Business points out, since Joe’s Crab Shack switched to a set wage, they have had fewer problems with service on big parties, which are a frequent source of business for the 18-unit chain. That’s because servers often balk about having to split the tip with someone who helps them; now a big party is assigned the number of servers it needs.

Tips photo credit: Aaron Stidwell CC by 2.0