Hospitality Industry Legal Issues: Restaurants Beginning To Replace “Tipping” With Surcharges Or Higher Menu Prices In Response To “Wage Violation Lawsuits”, Cultural Changes

 “…Front-of-house workers are suing one respected restaurant after another, including Dovetail, last month, accusing them of playing fast and Hospitality Industry Wage Violation Lawsuitsloose with the laws on tips. The charges include sharing tips with workers who aren’t eligible for them and making tipped employees spend too much time on what is called sidework, like folding napkins between meals…One such lawsuit was settled for more than $5 million. Some owners now think they can avoid the suits by eliminating tips…”

“…Another change is cultural. The restaurant business can be seen as a class struggle between the groomed, pressed, articulate charmers working in the dining room and the blistered, stained and profane grunts in the kitchen. The rise of chefs that are also owners has brought a few of the grunts to power. But as the average tip has risen to 20 percent or so from 15 percent, the pay for line cooks, dishwashers and others has stayed low…”

“…The self-interest calculation (for servers) may be different now. Credit card receipts and tougher oversight have virtually killed off unreported tips…”

Sushi Yasuda joins other restaurants that have done away with tips, replacing them with either a surcharge (Atera and Chef’s Table at Brooklyn Fare in New York; Next and Alineain Chicago; Coi and Chez Panisse in the San Francisco Bay Area) or prices that include the cost of service (Per Se in New York and the French Laundry in Healdsburg, Calif.).

These restaurants are numerous enough and important enough to suggest that a tip-reform movement is under way. On the other hand, they are few enough and exceptional enough to suggest that the movement may remain very small, and move very slowly.

Americans have stuck with tipping for years because all parties thought it worked in their favor. Servers, especially in restaurants from the mid- to high-priced, made good money, much of it in cash, and much of that unreported on tax returns. Owners saved on labor costs and taxes. And customers generally believed that tips brought better service.

For more:  http://www.nytimes.com/2013/09/04/dining/leaving-a-tip-a-custom-in-need-of-changing.html?pagewanted=all&_r=0

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