With tips down, some restaurants have increased server salaries. Will it last?

Before the pandemic, Colleen’s Kitchen operated like most restaurants in Texas – they paid their servers minimum wage tips, $ 2.13 an hour, plus tips.

But in this new world, where business is at its lowest and so few people dine in, owner Ashley Fric began to question whether relying on tips for staff was still a viable model. “The answer in a pandemic is no, you can’t pay someone $ 2.13 an hour and expect guests to come to a restaurant,” she said.

Tips are down 75 to 90 percent nationwide, according to One Fair Wage, a nonprofit that campaigns for higher wages for service workers. Because of this, many restaurants are re-evaluating the way they pay their staff, and many are increasing hourly wages to get people back to work. This is especially true in small and medium sized restaurants in large cities.

“We are seeing a huge change,” said Saru Jayaraman, president of One Fair Wage. “Our organization has been approached by hundreds and hundreds of restaurateurs asking for our help in moving to a full minimum wage. “

In an age when many restaurants themselves are struggling, it’s a challenge for many to figure out how to make this work, financially. For Colleen’s Kitchen in Austin, getting a paycheck protection program loan was a game-changer – it allowed the restaurant to start cutting staff down to $ 22 an hour.

PPP funds also helped keep Farmers Restaurant Group – which has seven restaurants and a distillery in the DC area – afloat – and allowed them to shift staff back to higher hourly wages, even though their business initially fell by 95%.

When they started bringing in employees, “instead of using minimum wage to tip, we just paid everyone $ 15 an hour,” co-owner Dan Simons said. “Whether we brought someone back as a cook, or we brought someone back as a driver, or curb runner or answering machine, we used the same pay, across the board.”

Trident Booksellers and Cafe in Boston was also initially offering $ 15 an hour, instead of the state’s tip-top minimum wage, when they started bringing staff back in May, according to Louie Levinson, who has worked there for three. years. Trident also initially offered to pay everyone 40 hours a week, he said, whether they work as much or not.

“$ 15 for € 40 was great,” said Levinson, who is also a student at Northeastern University. “I was happy to earn this money.”

It still wasn’t pretty much what he used to do with tips, but it was worth getting back to work. Now that Massachusetts restaurants have been allowed to reopen for some indoor and outdoor dining, Levinson earns a little less – around $ 12 an hour, plus tips – and is no longer guaranteed for 40 hours. per week.

Even now that every state has allowed restaurants to reopen for certain indoor and outdoor dining, business is down and most waiters are earning far fewer tips. (Photo by Joe Raedle / Getty Images)

“When they knocked him down it was really tough because I was getting weekly paychecks for around $ 300,” Levinson said. “Which, $ 300 a week for a month, is nothing in Boston.”

He’s starting to get tips again, but far from what he used to do. Partly because the cafe still does only a fraction of its normal activities, and partly because people now pay up front when ordering to minimize contact.

“When people get to that final menu and they see a tip, they might be like, ‘I haven’t received anything yet, I haven’t received any service yet, so I’m not going to tip this. topic, ”Levinson said.“ And then they don’t, and then they kind of just keep going. That’s why the schedule was also very helpful, because there are enough people not giving tip.

Emmanuel Munoz also notes that people do not tip as much as they used to. He works at a restaurant in Williamsburg, Brooklyn that does a lot of curbside pickup and a few alfresco dining.

“There are people who sometimes tip excessively, give you over 20%,” he said, “and that’s great. But you have one, then you have 10 clients who don’t tip you at all. “

The restaurant increased waiter salaries from $ 10 to $ 15 an hour, which was a big help, Munoz said, but even with that bump he earns less than before. He used to earn more, working mostly as a manager – now, with business down, the restaurant doesn’t need managers. And tips don’t make a difference.

“It’s very hard,” he said. He’s struggling, the restaurant struggling. But he had no other option either. Unlike many of his former colleagues, he is not entitled to unemployment.

“We have this situation with these colleagues who can claim unemployment and they don’t come back,” Munoz said. “They don’t want to risk anything. They don’t want to lose unemployment, they don’t want to go out and risk their lives, and that makes sense. But in my case, I have no unemployment and I need to go out and find an income.

This is true in many restaurants across the country, especially those that pay tip minimum wage, which is $ 5 or less in most states.

“A lot of workers say no, I refuse to come home and put my health and that of my family at risk for $ 2, 3 or 4 an hour,” Jayaraman said. “It makes a lot of employers just say OK, I think I just have to pay full minimum wage because either I have a conscience and I can’t ask workers to come back for it when the tips are too low,” or I realized that the workers will not come back to work for this when the tips are so low.

Whether restaurants that started paying higher hourly wages will continue after the pandemic is another question. Some, like Farmers Restaurant Group, have already returned to the peak minimum wage model. Now that restaurants have been allowed to reopen for some indoor and outdoor dining in the DC area, Simons said, it made financial sense for both the business, which is still operating at a loss, and for the waiters, who usually earn a lot in tips. .

“Especially right now, when we can’t generate sales and the customer is sensitive to price increases, the math just isn’t there,” to keep paying servers a higher hourly wage, said Simons. “That’s why the previous structure is actually more affordable for the business. And in the case of my servers, they end up with more money.

Colleen’s Kitchen plans to continue paying employees more in the future – between $ 15 and $ 22 an hour, depending on their job description. To make this sustainable, the restaurant instituted a 20% service charge.

“We plan to continue paying all staff a living wage they can count on,” said Fric. “I think it’s very important for our employees to know what they’re going to bring home that week, or what they’re planning to take home that week.

Munoz hopes the restaurant industry as a whole moves towards paying waiters and other staff with higher, more livable salaries.

“Why can’t I expect my check at the end of the week to cover all of my needs?” ” he said. “Why do I have to wait until Friday night with a full restaurant to see that I can have enough money to save or to rent?” “

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