Is the unequal system of tipping hurting the ability of restaurants to hire qualified cooks in mid to high-end establishments?
Warning! This article is written from a chef’s perspective…if you are a server then be prepared to get pissed off. But also, please keep an open mind and try to read the article objectively as if you were not in the business.
Are good cooks choosing to become servers, or choosing a different industry entirely, because the wages for cooks are too low? Is it time to scrap the tip system and move to a service charge system so cooks can be equally compensated with the servers?
Today’s graduate from the Culinary Institute of America will have a tab of about $112,785 or more to pay off. Yet the national average wage for a line cook in 2012 was $13.64. Meanwhile, servers will usually earn 2 or 3 times the annual wages of a cook. According to Bill Guilfoyle, an associate professor at the Culinary Institute of America, “At the most exclusive New York restaurants, servers and others out front can make $75,000 or more a year, while the kitchen staff might have to settle for $30,000.[1]”
In the May 2011 Occupational Employment Statistics Report, the Bureau of Labor Statistics showed that restaurant cooks earned an average wage of $11.25 per hour, or $23,410 per year assuming a 40-hour work week. The lowest-earning 10% of restaurant cooks earned wages of $8.06 per hour or less. Their median income was $10.61 per hour, and only the highest-earning 10% earned wages of $15.46 or better.
Of course a number of variables affect these numbers, including type of workplace and geography. Full-service restaurants were the largest employer of line cooks, paying an average wage of $11.12 per hour. Hotel cooks received an average of $13.36 per hour, while limited-service restaurant cooks only earned $9.98 on average. Cruise ship cooks earned among the best wages, averaging $17.72 per hour.
The 2010 StarChefs.com Salary Survey Report showed experienced line cooks earned an average of $28,662, or $13.78 per hour. In 2011 the average increased slightly to $13.89, and then in 2012 the wage dropped to a five year low of $13.64.
Some will say that restaurants should pay cooks more, but restaurants cannot afford to pay line cooks the significant difference between server’s and cook’s wages without passing that cost on to their customers. The average net profit of a typical restaurant is only about 5%, plus or minus 3%, so there’s really no playroom for them to eat the cost of paying higher wages to cooks. And passing that significant cost onto customers is not a good business solution.
I’m going to wade into this age old battle between the front of the house and the back of the house. Cooks will probably love me, waitstaff are going to hate me, and managers are going to be irritated because I’m bringing to the surface an issue which “stirs the nest”. An issue which needs to be dealt with but for which there is no easy solution.
So, what’s the problem?
In essence, the kitchen staff is under compensated for the work which they do while the waitstaff are overcompensated. Wow, I can hear the front of the house screaming! But are they upset because it’s a false statement? Do you think servers are better, work harder, or in some way deserve more than the cooks? If so, would a server have a job if there were no cooks?
Here is my goal…
At the end of the day when all things are counted including tips, number of hours worked, overtime, benefits, and so on, the line cooks should earn at least the same hourly wage as the servers. And it is not that hard to fix. Although policies vary by establishment, the servers in most restaurants are already required to tip out other staff, such as the bussers, the host, the maître d’, and/or the bartenders. Sometimes they are required to tip the cooks, other times it is done voluntarily, but at most places it is not done at all. A big part of the reason for this discrepancy is that the IRS has termed cooks as a “non-tipped” job description (more on this below).
I respect the work which waitstaff do and I consider servers to be very important to a successful restaurant…but while they are important they are not essential. (I hear more screaming!) Cooks on the other hand are essential to a successful restaurant, and as the “essential” element of the operation they deserve equal wages as those who are simply “important”. Some will say, “I have customers who come in just to see me.” Or, “You don’t know how many times I have had to save a customer because of poor food.” That is true, and that’s one of the things which make servers important to a successful restaurant. But that does not make you essential. Answer me these two questions. 1) Can you have a restaurant without servers? Answer: yes. 2) Can you have a restaurant without cooks? Answer: no. Would you go to a building just to visit and talk to a server that you like and pay some kind of a bill but never get any food? Of course not! No cooks, no food, no servers. This is why cooks are essential while waitstaff are simply very important to a successful operation.
Now that the front of the house is pissed off like an angry hornets nest poked with a stick, and the back of the house is giving high-fives, let me clarify my perspective.
I do believe the waitstaff are extremely important to a successful restaurant. They have skills which most kitchen staff do not have, such as the ability to deal with people who deserve to be given the finger rather than treated politely. The servers are able to up-sell items and bring in more revenue, push specials, make unhappy guests leave happy, fix errors made by the kitchen, smooth out an over-sat restaurant and the resulting wait both for a table as well as for food, are familiar with food & wine pairings, and many other special skills. I recognize and value these skills which servers have, and I would not want to do the job that you do. It is not my intent or purpose to demean, devalue, or suggest that waitstaff are not valuable. My point is, they are not more valuable than the cooks, and as such, do not deserve significantly higher wages than the cooks, especially since waitstaff would earn nothing without the cooks.
Some of you will say, “Well if you don’t like it in the kitchen then become a server.” That’s not the point of the conversation. We do like it in the kitchen. The question is, “Why aren’t cooks compensated accordingly?”
It is not the server’s fault that this situation has come about. It is the fault of the US government getting in there and regulating things, trying to tax tips and saying that cooks have a non-tipped job description. Years ago it was common for servers to tip-out the kitchen after each shift, but the government now says cooks do not belong in a tip category and should not receive tips! Who the hell are they to make that determination?! Bureaucratic imbeciles!! And changing that bureaucracy is so full of red tape that it would take years if not decades to change. So I think the solution is to eliminate the tip system and go to a service charge system instead. This would allow the house to evenly distribute tips among all food service professionals, both front and back of the house.
What is the Service Charge System?
Instead of guests leaving a tip, a service charge is automatically added to every guest check, usually somewhere between 15% – 20%. The house collects the service charge and then redistributes it to all staff (including the kitchen) as it sees fit.
What is particularly interesting about the tipping system is that, while customers say they like being able to control how much money goes to the staff, surveys show that most people tip the same percentage almost regardless of service, except in the case of REALLY bad service. Really great service statistically increased the tip by only 1.5%.
Also, the tip system is inherently skewed. Attractive women serving men make better tips, and attractive men serving women make better tips. Other tipping discrepancies based upon race, “smiley faces”, and the weather can be seen here.
What are the benefits of moving to a service charge system?
Server’s wages will become more consistent.
A service charge system essentially pools tips for redistribution among all staff. The server’s wages will be more consistent and not as dependent upon such things as good customers, bad customers, good sections, bad sections and so on.
Teamwork will increase.
Since servers will not be dependent upon tips, their service teamwork will increase because it will be focused upon the entire health of the restaurant and not just upon their tables. Making them more willing to help each other out and serve the interests of the restaurant itself rather than their own pocket.
Thomas Keller has stated that when he instituted the service charge system at The French Laundry the waiters were worried, but “ultimately, the system proved instrumental in fostering an undeniably unified restaurant staff.”
It will become easier to get and to keep quality cooks in the kitchen.
Better wages will attract more qualified cooks to the kitchen, making it easier for them to make a living wage in this industry. In turn, this can increase the number of qualified applicants for kitchen positions which will increase competition and result in better cooks in the kitchen and therefore better, more consistent food served to the guests.
There will be less animosity between the kitchen and the servers simply because there will be greater equality in wages.
I forbid the servers to discuss their tips in the kitchen. Nothing will piss the cooks off faster than to have a waiter say, “I just got a $300 tip because that guy loved his steak!” It is unethical, unprofessional behavior.
In some ways, customer service will actually increase.
- Servers will be less likely to pressure management to let them go home simply because it’s slow…and then as soon as they leave you get slammed and are short staffed.
- Servers won’t fight to be the only one to take a big table hoping to get a big tip. Instead, they’ll help each other on big tables because they know they’re all sharing the tip.
- Servers will not fight to get the most customers (padding their tips) which usually results in poorer customer service.
- Servers will work for the good of the restaurant rather than for getting the most cash.
Your kitchen staff will be more happy!
With better wages cooks will be more loyal, and more likely to stay long-term, which will result in less turnover and less expense in training new staff. And let’s face it; training new cooks takes more time and money then training new servers. If you have a grill station, sauté station, pantry station, and so on then new cooks need to learn each of these stations. It can take many weeks to learn the various stations, all the recipes and prep associated with them. Training servers through the different sections on the floor does not change their job duties like it does in the kitchen. It is therefore generally less time-consuming and less expensive to train qualified servers than to train qualified cooks.
What are the arguments against switching to a service charge system?
The servers will have less incentive to provide great customer service.
My response: that’s bogus! Quality service is a matter of good training, proper discipline, a good work ethic, professionalism, and pride in your work. Does a cook need an incentive to prepare a medium rare steak correctly? No. Treat them just like the kitchen staff…train them properly, and fire them if they refuse to do a good job. Servers are professional staff…don’t treat them like prima donnas.
The guest check average will go down because the servers will sell less.
My response: not necessarily. There is still incentive to push high-end items and to upsell because at the end of the day it still drives more cash into the server’s pockets if they up-sell. This is also another training issue. Give the worst sellers better training…if they fail to perform then give them the worst shifts, or replace them with better staff.
The establishment will lose some servers if we change to a service charge system
My response: probably a true statement, especially if there is a large disparity between the front of the house and back of the house wages once tips are considered. But, you may also gain a more professional waitstaff with less drama and more of a teamwork oriented staff between front and back of the house. Customer service may increase, and therefore customer traffic may increase.
Additionally, as the disparity between the front and back of the house wages continues to increase, restaurants are increasingly faced with the possibility of losing quality kitchen staff. So either way you may be faced with the issue of losing staff over this issue. Or in the case the kitchen, it will become harder and harder to find qualified, quality staff. Great service with crappy food is not a recipe for success.
Your other alternative to alleviating the wage disparity is to increase the wages to the kitchen staff and then increase the prices on your menu. Yeah, we know that’s not going to happen! That would increase the cost to the customer, while the service charge system simply puts the cost (by including the average tip) up front, at no extra cost to the typical guest.
You will lose customers by going to a service charge system.
Each operation needs to carefully evaluate their own situation. However, if you determine that your average tip is 20% and you decide to set up a service charge at say 18 or 19% you can then sell it to your customers as a way to offset the wage disparity between the people serving their food and the people actually cooking their food, and that if they are a normal tipper that this system will actually save the average patron money. But you also must be clear in describing what the service charge goes towards, because customers will want to know, and the waitstaff needs a cohesive response to the question.
Without the tip incentive servers will become lazy and do less work.
This is the challenge of every manager at every job in every company which does not have tipped or commissioned employees. It is a challenge which the kitchen already faces and successfully deals with. Ultimately it is the job of the management to properly train their staff and weed out those who do not meet the standard. The waitstaff already know how to do the job properly. If anything, management will have to work harder for a while to maintain and enforce the standards upon the staff. Professionalism, self-discipline, and pride in your work. If they refuse to do the job properly then replace them.
Restaurants who have Decided its Time to 86 Tipping
World renown Chef Thomas Keller at The French Laundry, CA and Per Se, – NYC
Chef Alice Waters at Chez Panisse – CA
Chef Daniel Patterson at Coi – San Francisco
Briarhurst Manor Estate, Manitou Springs – CO
Atera – NYC
Chef’s Table at Brooklyn Fare – NY
Chef Grant Achatz’s two Chicago restaurants Next and Alinea
The Turquoise – San Diego
Sushi Yasuda, The Modern, Union Square Café, Gramercy Tavern – NYC
Tom Douglas’ The Carlile Room, Palace Kitchen, and Dahlia Lounge – Seattle
Ivars Restaurants – Seattle
Walrus & the Carpenter, The Whale Wins, Barnacle – Seattle
The Ram Restaurants – Seattle
El Gaucho, Aqua – Seattle
21 Trendy Restaurants article includes:
– Black Star Co-op – Austin
– Abrusci’s – Denver
– Packhouse – Newport, Kentucky
– Craft, Dirty Candy, Riki – NYC
– Girard – Philadelphia
– Bar Marco – Pittsburgh
– Bar Agricole, Comal, Ippuku, Manos Nouveau, Sous Beurre Kitchen – CA
– The Public Option – Washington DC
How is a service charge system different than a tip system as far as the IRS is concerned?
Starting January 1st 2014 a service charge is considered by the IRS to be part of a wage and as such the employer must withhold appropriate taxes. In theory, this makes no difference to the server because by year’s end they will have the same amount of pocket cash…assuming that they didn’t cheat on their income taxes by declaring less in tips than they actually received (they wouldn’t do that would they?!)
Are These The Final Days Of Automatic 18% Tips At Restaurants?
How the IRS Automatic Gratuity Ruling Impacts Restaurants and Employees
Things to consider before changing to a service charge system
What percent service charge will you use?
It is suggested that you evaluate your average customer tip percentage and use that as a guideline for your new service charge.
How will you determine which staff get what percentage of the service charge?
The goal is to bring more equity between FOH and BOH wages.
What are the tax ramifications of this change?
Definitely consult with your tax advisers regarding this. There are definitely different rules about who’s responsible for reporting the appropriate taxes.
Will you allow additional tips above and beyond the service charge?
If so how will you deal with that tip? Many places taking a service charge approach will not even allow tipping. Others may take the tip and put it into a general pool which is distributed via lottery or some other method.
How do you communicate this change your customers?
It needs to clearly be on your menu that tipping is not required, or allowed, depending on your perspective, and that a service charge is in place instead. You also need a cohesive, detailed explanation to give to customers. All the servers need to give the same message, and not something like oh they’re taking money out of our pockets. Posting the policy and the details of the distributions on your restaurant website can be very helpful. Below are a few examples of that.
Examples of Service Charge Policy Statements and/or Alternatives
Chez Panisse response to a news article request regarding their service charge
Casa Nueva
Add a Tip Line for the kitchen – Alimento restaurant in L.A. has implemented this approach
Further Reading
Chef Thomas Keller eliminates tipping at Per Se
A Pittsburgh Restaurnat Just Banned Tipping and Replaced it with Something Better
A Progressive Argument for Putting an End to Tipping
I got rid of gratuities at my restaurant, and our service only got better
Tipping is an Abomination – what affects a guest’s reasons to tip
Leaving a Tip: A Custom in Need of Changing?
Tipping and Its Alternatives: A Comparison of Tipping, Service Charges, and Service-Inclusive Pricing
After I banned tipping at my restaurant, the service got better and we made more money
Check Please – the history and illogical side of tipping
Service Included: 11 Restaurants Where Tipping Isn’t Customary
Tip Levels & Service – PDF on the weak relation between quality of service and tipped amount. Includes 14 behaviors servers can do which statistically increase their tips, regardless of service.
Who Gets the Tip, or “If our server just made $60 cash from each of five tables in one hour, why did I go to law school?” – a must read
A Brief History of Tipping
The Futile War on Tipping
Danny Meyer Eliminates Tipping at all of his restaurants – 10/2015
As Minimum Wages Rise, Restaurants Say No to Tips, Yes to Higher Prices – NY Times 8/2015
Why Seattle May Be the First to Ban Tipping– Esquire 6/2014
Tell me your thoughts!
Should we change to a service charge system?
Do the servers deserve more cash than the cooks?
Would a service charge system increase teamwork: on the floor as well as between front and back of the house?
Is there a different/better solution to equalize wages between FOH and BOH?
Comments from before Site Migration
All are great points to consider. By recording Service Charge Revenue, the dining establishment is not legally obligated to pay out the service charge, whereas a gratuity is 100% intended for the person in which it was given. By recording a service charge; revenue is increased, a paper trail is created, the income is recorded on a paycheck thus the IRS gets their FICA every two weeks this will keep the employees and restaurant in good standing with the IRS…which can lead to another great debate for restaurants in gaming properties. https://www.irs.gov/pub/irs-pdf/p4268.pdf. With little margin after month end, changing from the customary system to a service charge or auto gratuity system in a restaurant with established clientele and employees could be the difference between keeping the lights on, or closing the doors. Management must analyze their business plans and make some decisions. Can this policy fullfill the void created by increased wages? Remember you could be increasing FOH wages by a little as 400% depending on if your state allows the Federal Minimum for Tipped Employees or not. My opinion, this policy would be best suited for a new independent concept where guest history and expectations, employment history and expectations, are zip. The state in which it operates would have to have a minimum wage much higher than the federal min. for tipped imployees. The guest matrix would have to be one which is not so value driven on quantity of food, but the quality of their whole dining experience and has the expendable income.
The disparity between FOH and BOH income is staggering. After working both on and off for many years I finally decided I want no part of the BOH and the misery, pressure and negative atmosphere. If I have another option that includes moving around, happy people, socializing and being appreciated its a no-brainer. Implementing a service charge instead of tipping sounds frightening to servers and one might be inclined to think that hourly wages should be competitive if tipping is eliminated. Still, I can see that it is the beginning of a trend and we ought to get used to it instead of fighting it. Line cooking, (after farming and live musicians in some cases), is the most underpaid, under-appreciated, static, hunched-over, dangerous, pressured and stressful job of all.
Reading this article is thought provoking, though I do have to point out that there are educated choices to make in both sides of the house. There are more than enough people, articles, and career statistics that warn potential chefs about the cost of culinary school and the reality of the earnings they will make after completion.That being said, they do have a ladder to climb in most any situation, and after years of service and learning, there is a potential to make excellent salary and benefits. Servers, on the other hand, most likely went into that side of the house because of the money as well.They also typically do not get benefits and, in most restaurants, they outnumber the back of the house staff at least two to one. The numbers make it so tipping is a viable way to keep cost down for the restaurant. I do not dispute that restaurant chefs and line staff typically seem underpaid, but this isn’t a new system, it’s the status quo. There are a number of restaurants that break this trend by doing various things such as tip pooling and even getting rid of tips all together with varied amount of success.
I come from the front of the house mostly, but I do have experience in the kitchen. In fact, I like the kitchen a lot more, but the wages were so low for entry level that I did not, and in fact could not, continue to live and pay bills and follow that side of things.
I actually have to go to work now. At any rate, it was a thought provoking article. Thanks.
DREW – In states where the “Tip Credit” minimum wage is used to pay servers a significantly lower minimum wage, then I agree that the arguments I put forth in this article are mute in all but a few of the best high-end restaurants. The primary point of the article is that servers should not earn significantly more than the cooks, which has been the case at many of the high-end restaurants I have worked at in WA. And to your point, WA does not use a Tip Credit system…the minimum wage for everyone is about $9.15. That $7/hr difference adds up quickly!
Without any real statistics, I would guess that the article would apply to maybe 5% – 10% of restaurants which have servers. For the rest, 86ing tipping would not make sense.
JACKIE – I totally agree. My point is that at the end of the day the cooks and the servers should earn approximately the same wage, based upon a month’s earnings, or even upon a year’s earnings if needed to balance seasonality of business. In “Tip Credit” states where tipped employees earn a significantly lower minimum wage it may not make sense to move to a service charge system, and it certainly would be wrong to make servers earn significantly less than the cooks (after wages and tips are added).
In WA where I live, the minimum wage is $9.15 for everyone. So in a mid to high end restaurant with good business levels the servers can make BANK! Hence, the reason for the article.
Although well researched and written, this article does not address the use of the “Tip Credit” wage that some states allow restaurants to compensate their service staff with. I believe that this issue undercuts the validity of the author’s argument. This wage, $2.13 per hour(plus tips), is allowed under federal law only if the server makes up the difference (total number of hours worked *$7.25) in tips ($2.13+ tips = $7.25 * number of hours worked). If/when the server does not make enough in tips to equal the amount of money they would have earned for the number of hours worked being paid minimum wage, it is up to the server to bring this to the attention of the restaurant management, which will then have to pay the server the difference between the amounts. While all of the facts concerning what servers are tipped, cited by the author, suggest the server would have no problem making more than enough money, I suggest that for every Next, Chez Panisse, and Green Derby there are over 2,000 restaurants where the check average is barely $10. When servers are no longer paid this wage the discussion on the removal of tipping can begin with earnest.
I am coming from a servers side of things. I’m not upset about what I read, and do feel this should be implemented. It sounds like the writer of this article is maybe from a high end restaurant if he is stating the servers are making $70k annually. Since I didn’t see any statistics for people in the service industry, I will just lead my past serving job as an example. Since it isn’t stated, restaurants only pay servers $2.14 an hour. If this service charge system was implemented and tips distributed equally, then that means it would only be fair to lower the hourly rate of the cooks so foh and boh make the same amount per hour. Then when there are dead nights for the restaurant and hardly any guests the boh can suffer as much as the foh in trying to pay their bills. If you are willing to take that risk, then keep pushing forward. I am pretty sure there are a lot of cooks out there that would prefer to keep making their $13 an hour instead of chancing every day.
The first time I visited Australia from Canada, there was virtually no tipping at all. Now, there is some tip jars at the front of restaurants. I have seen other customers pass by a table and scoop the tip from the table into their own pockets. Then the server thinks the customer did not leave a tip! Double whammy! Anyway, what happens if a service charge is instituted, fair to all staff, front and back, but the service is horrendous! What’s a customer to do then? In Canada we pretty much tip according to the efficiency of the wait staff. If the meal is not cooked properly we send it back to the kitchen. So, what to do? I think tip splitting is fair.
a very succinct, perfectly stated article, bravo
Hi,
Who are you? You are amazing!!! I honestly couldn’t have said it better and clearer myself. Literally every aspect of this is well thought out, planned to please not only the staff but its also there to increase customer satisfaction as well as being beneficial to the establishment as a whole. This is the solution, and with no disrespect at all, but servers have no right to complain about this. Chefs are trained for this, this is their career and they all spend a crazy amount of hours at work and give up so much, this isn’t just a job to them its a dream, a passion, a creative outlet for most. To take that away from so many chefs around the world because its a terribly low paying trade, would n’t be fair. Not to mention, we need to fight to keep food alive!! We need to teach the next generation and the one after that, all about the amazing magical things food can do and become.
I feel the world’s becoming more fast paced, all about convenience foods, fast foods, processed foods, frozen and microwaveable. Skills at home are becoming less and less necessary. Soon people won’t be baking with their grand-children they will be buying cookies from the store. Children are becoming less aware about where food comes from, the connection between food and nature, and how to respect it.
This might seem a little off-topic, but its not. We need to encourage food knowledge and production. And we also need to respect this industry in all its areas.
Miss LA Claydon
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Your article is well read and thought out. As being a server to manager FOH tips should and always be based on the level of service & the quality of the food served. There have been many a times where i have endured bad service from food not being put through to kitchen to waiting 1hr before having an order taken yet the food has been sensational. Do i tip the server hell no, I ask to speak to the Head Chef and pass them the tip to distribute.
I live and work in Australia your lucky if you receive a tip regardless of service/food quality. However working in Europe is completely different. Tips aplenty, but those tips were put into a jar and split between the two FOH & BOH who worked that day.
Unfortunately US Hospitality industry doesn’t pay the people who make their businesses viable. Paying someone $2.50ph plus tips is not a wage. I hear it all to often and experienced it myself, where employees expect a tip. A tip is a gratuity which at the end of the day is a thank you for your service and food quality. Not an expected thing. If I was given bad service and bad food why should I tip? .
My hourly rate in Australia for my staff is $27ph hour regardless of how busy it is. Tips are split all the same if you recieve one. We have a wage budget which is 18 to 25 % revenue and food cost 12% then add your overheads still looking at 60%-50% profit back to owner of business. Why? Because without chefs, wait staff, bar staff, office staff , maintenance staff you wouldn’t have a business.
The real argument should be paying employees correctly not peanuts.
Staff can make or break your business look after them!