When the O-B House, a downtown eatery in Fort Lauderdale known for its breakfast and lunch menus, went from the traditional leave-your-gratuity-on-the-table to a no-tipping model, it drew the attention of the local press.
Both the Sun Sentinel and Broward Palm Beach New Times, smelling a story among the battered toast and buttermilk pancakes, published stories about the big shift. Implementing the change meant paying a higher wage to servers, who usually rely less on an hourly wage and more on the generosity of guests, and an increase on prices on the menu in exchange for greater predictability of incomes and equitable wages across front and back of house employees. Rodney Ely, co-founder of O-B House, said the change would help them with a competitive edge to “gain and retain new employees.”
And the O-B wasn’t alone in this sun soaked region. Choices Cafe, a vegan eatery with six locations, instituted the no-tipping approach after being inspired by Danny Meyer’s Union Square Group’s attempt to do the same across his 13 restaurants and 1,800 employees in New York. “It has really opened up a dialogue about the practice and roots of tipping, and it brings awareness to the reasons behind the movement,” says Lori Zito, president of Choices.
The movement to eliminate tipping in favor of higher wages for servers, also known as Hospitality Included, isn’t exactly new. Many have attempted to address the underlying issues that create income disparity between employees in the front of house, where an average lower hourly wages can be supplemented with tips, and the back of house, which make an average higher hourly wage but don’t share in the tips received. Additionally, servers with shifts on slow days, or those who work in restaurants of low traffic, even the best attitude may not pay them enough to make a living wage.
“It creates a feeling of unity and empowerment.”
The no-tipping movement has proven to be a flash point in attempting to solve the issue, generating headlines nationally and concern from servers and customers alike. Many restaurateurs have joined the movement only to defect after backlash from their staff and guests. Joe’s Crabs Shack was the first national chain to try the no-tipping model but switched back after only three months.
But in tourist-friendly South Florida, where many visit from cultures where leaving a tip is not customary, there’s a sense that the no tipping approach might have friendlier ground than other regions of the country.
Zito, of Choices, says customer feedback has been overwhelmingly positive and motivates waitstaff to provide good service, making them feel more like owners in the business rather than employees. “It does take a much greater effort on the part of management to keep the team motivated and engaged in this way, but it’s worth it,” Zito adds. “It creates a feeling of unity and empowerment.”
Creating that sense of ownership, or at the very least the perception that staff can earn as much or more foregoing tips for a higher wage, has been a key challenge for restaurateurs adopting the model. The federally mandated minimum wage for tipped employees is $2.13 an hour, so long as those employees’ earn up to the non-tipped federal minimum wage of $7.25 an hour. In Florida the state minimum wage is $8.10 an hour but restaurants can apply a “tip credit,” paying as little as $3.02 per hour to servers as long as their tips equal up to the $8.10 hourly wage. And Upserve’s own survey of more than 1,000 restaurant employees found the vast majority (97%) preferred the sense of control over their income they get by receiving an hourly wage plus tips.
“Knowing it works in this market, and the receptivity in the community we’ve seen, we believe it can be replicated anywhere and everywhere.”
Jomari Perez, a Miami native and former waitress at Miyako Sushi and BLT Prime, told us she received monetary tips at each of her stints, in fact, she says if it weren’t for the higher-than-minimum-wage incentive, she would’ve never pursued a job as a server. At BLT Prime, an 18% automatic gratuity was included on checks to compensate for the low minimum wage for servers. Jomari, however, prefers working for tips. “If I exert optimum service I have the chance of controlling my earning,” she says, finding it unlikely that the increased hourly rate would be enough.
This perception of no tipping in restaurants is a key reasons why the model is difficult to implement.
While several South Florida locations have adopted a no-tipping and haven’t yet turned back, it hasn’t spread like wildfire all over the region.
Combating that perception requires being intentional and clear about how the math adds up, says Marco Franca, the owner of Posto9, a Brazilian gastropub that opened a little over a month ago and was designed with a no tipping model from “day one.” The restaurant is located in Polk County, hours from Miami, and doesn’t get the level of tourism as South Florida.
Still, Franca has all 60 employees on board. The secret, he says, is making the right choices so that it benefits all of the staff. For instance, Posto9 schedules in a way that all staff almost always get 40 hours a week on the clock, providing more predictability. And restaurant veterans who can help raise the bar on service are called captains and receive a higher wage (about $17 an hour on average).
“The communication process and organization structure is very much key in how you do this,” Franca says. “Knowing it works in this market, and the receptivity in the community we’ve seen, we believe it can be replicated anywhere and everywhere.”
Greyceli Marin, of Fort Lauderdale, Florida contributed reporting.