Seattle skyline

Much like in other parts of the country, such as in Minneapolis and southern California, the rising costs of labor elicit various reactions in Seattle. However, many restaurateurs take the voter-approved increase in minimum wages as a social justice-minded signal to innovate and elevate the perception of the foodservice industry.

One response to the increases has been to go tipless. Opened in late 2015, Optimism Brewing in Seattle chose to be tip-free from the start. Co-owner Gay Gilmore firmly believes that wages should not be subject to “the whim of the customer.” Instead, her employees “do a good job, not for a tip, but because they love the product and the brewery.” Gilmore also cites other reasons to go tipless, including that tipped workers are disproportionately female, that tipping has a racist history, and that, as the posted information at Optimism explains, “tips do not ensure good service.”

Many restaurateurs take the voter-approved increase in minimum wages as a social justice-minded signal to innovate and elevate the perception of the foodservice industry.

Plus, for Optimism, they have to think about the beer brewers as well. “I would hate for our brewers to make less money on an hourly basis than the people who put it in a glass,” says Gilmore. Though Gilmore admits that some customers are unsure of the tipless policy at first, she says, “Some people have never taken the time to think about what makes tipping so awkward and strange. And once people take the time to hear some of the reasons, they are enlightened.”

Similarly, Seattle Coffee Works also wanted to ensure that roasters weren’t outstripped by baristas. Owner Sebastian Simsch says, “The conversation got shifted, based on Seattle’s [increased] minimum wage. It was, in a really good way, kind of our fire starter. If we have this environment, this is really our opportunity to get rid of tips.” Already desiring to provide better compensation to his employees, the city’s wage increases validated a transition to a tipless model, which he believes sustains higher wages and competitive benefitsand ultimately, more predictability for his employees. “People tip based, not on their experience today, but their experience yesterday,” says Simsch, especially in a coffee shop where customers often tip via the point-of-sale system before receiving their drink.

Known as the City of Goodwill, “there’s more social justice awareness in Seattle,” says Joe Fugere, founder and CEO of Tutta Bella. That awareness makes it easier to promote livable wages. For ten years, Tutta Bella employed tip-pooling as a way to encourage teamwork and raise wages, but in 2016, the Ninth Circuit Court of Appeals invalidated this practice. Fugere had to find a new strategy for his five Italian restaurants, so Tutta Bella instituted a 20 percent service charge, all of which goes directly back to the staff, and is distributed using a tier system.

“People tip based, not on their experience today, but their experience yesterday…”

“We’re able to pay our kitchen a little higher, and we’re able to pay our servers well. When considered over a pay period, the slow nights balance out the busy nights,” says Fugere. With the service charge, Tutta Bella servers make well over minimum wage, and customers experience a seamless transaction. Though the charge actually costs the business moreservice charges are considered income and taxed accordinglyFugere says it’s “good for the guest, good for the employee.”

Restaurant staff management just got easier, employee turnover just became a thing of the past.

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Much like Optimism, Ghost Note Coffee implemented a tipless model from the outset. “Maybe the first thing we decided on, we want to treat our employees better than anyone else,” says owner Christos Andrews. Instead, Ghost Note adds an automatic 10 percent gratuity to each sale that helps fund higher wages, paid time off, and other benefits. When tips contribute to an employee’s salary, “we’re putting so much faith in people, and we have no idea where they stand or what they value,” says Andrews.

In the three months that Ghost Note has been open, reaction to the gratuity charge has been positive. “I was worried that it was going to be so against the grain, that we’d have to tell everyone about it,” says Andrews. “We’ve gotten a surprising amount of support and understanding.” Andrews agrees that Seattle’s political stances contribute to this, saying “I don’t think I would have the guts to do this elsewhere.”

“Before, we had to choose between the people and the business. Now, there’s nothing more empowering than paying people better.”

New ideas sometimes come with new headaches, though. At Tutta Bella, a small, but vocal minority opposed the service charge, and they’ve voiced their disapproval on Yelp. “That’s been a little bit of the struggle, a minority with a strong voice,” says Fugere, though plans are already underway to incorporate that feedback by offering a “service promise.” Ghost Note has also experienced a handful of disgruntled online reviews as a result of their gratuity charge. At Ghost Note and Optimism, they display statements explaining what their policies are and why they have them, a strategy that seems to appease most customers  “Every day, we have people with a dollar, looking for the tip jar,” says Andrews, which he views as an opportunity for conversations about wage disparity. For Seattle Coffee Works, the tipless model is new, and not yet tested. They just transitioned two of their shops and opened a third store, also tipless, on May 1, 2017. Simsch calls it a “massive experiment,” but says so far, the vibes have been good.

Goodwill and good vibes aside, these diverse approaches seem to be working. Whether driven by the minimum wage increase or simply by the desire to do good (or perhaps both), livable foodservice wages are becoming a reality in Seattle.

As Simsch says, “Before, we had to choose between the people and the business. Now, there’s nothing more empowering than paying people better.”

Kaitlin Throgmorton crafts content for small businesses, nonprofits, and magazines in Seattle, Washington. She’s long been a foodie, probably ever since she insisted to her kindergarten class that artichokes were her favorite food, when everyone else said pizza. Now she spends much of her free time finding the best food and drink (especially coffee!) wherever she goes.

  • Mark Shaw

    International Journal of Hospitality Management
    Volume 70, March 2018, Pages 9-15
    International Journal of Hospitality Management
    Discussion paper
    A within-restaurant analysis of changes in customer satisfaction following the introduction of service inclusive pricing or automatic service charges?
    Author links open overlay panelMichaelLynnaZachary W.Brewsterb
    https://doi.org/10.1016/j.ijhm.2017.11.001
    Ge

    Highlights

    Restaurants receive lower online customer ratings when they eliminate tipping.

    Customer ratings decline more when tipping is replaced with service-charges.

    Customer ratings decline more when tipping is replaced at less expensive restaurants.

    These findings provide a strong argument for the retention of tipping.

    Abstract

    Many U.S. restaurants have recently adopted no-tipping policies or are considering doing so. This study examines the effects of such moves away from tipping on restaurant’s online customer ratings. The results indicate that (i) restaurants receive lower online customer ratings when they eliminate tipping, (ii) online customer ratings decline more when tipping is replaced with service-charges than when it is replaced with service-inclusive-pricing, and (iii) less expensive restaurants experience greater declines in online customer ratings when replacing tipping with either alternative than do more expensive restaurants. These findings provide a strong argument for the retention of tipping, especially among lower- and mid-tier restaurants.
    Keywords
    Tipping policynw
    Customer satisfaction
    Online ratings

    In Turn Being a Professional Waiter spanning 3 decades… I disagree with that Statement …for Making 15 dollars and hour with a 20 % Service Charge where my Employer Takes 50% . I am make making 10,000 Dollars less with Higher sales