Reimagining the Value of Labor in Food Service

A case for equalizing income across the house

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. - Pete Wells, NYT Restaurant Critic

In 2015 a movement began to make waves in the restaurant industry—a movement of

education about the prevalent class disparity in the restaurants of our major cities. The

first big splash came from acclaimed New York restaurateur Danny Meyer, when he

abolished tipping in all his restaurants and instituted a flat rate service fee. From there,

long time anti-tipping advocates added their voices, highlighting class problems that

remain invisible in the department of labor statistics. The Atlantic and Washington Post

both ran extensive articles on the issue and potential solutions that year. The revolution

was coming; we were all going to achieve livable wages and equality within our little

portion of the world.

But, the revolution died down and for a lot of my fellow line cooks at that time, their

dreams of cooking professionally died along with it. Talented individuals somehow

seemed to lose interest in toiling in sweltering high-end kitchens for mere peanuts.

Aspirations of opening innovative bakeries and restaurants—concepts that we used to

share eagerly with anyone who would listen—were now replaced by the terrified silence

of workers with multiple-job exhaustion and financial insecurity.

This disparity comes from the differing income sources of front-of-house (FOH) and

back-of-house (BOH) employees. Convention dictates that the restaurant pays BOH

employees an hourly wage according to stagnant minimum wage standards.

Meanwhile, individual customers primarily pay FOH employees via the “tip pool” or a

similar system. These employees earn less than half the local minimum wage before

tips, which leads to financial instability when the business fluctuates throughout the

seasons and even weeks. The business then becomes incapable of paying for quality

labor and will suffer from high turnover and training losses as the market continues to

weaken. Simply put, everybody loses.

The system I outline below offers a way to guarantee a livable base pay rate for all

employees. In addition, it provides equal access for all employees to the bonus earnings

of a busy weekend or holiday. These earnings increase when restaurants retain the

skilled labor necessary to capitalize on these peak times. All facets of the operation

improve individually and create a restaurant that is more successful overall.

A minor restructuring that marries the concepts of wage and gratuity is the simplest

solution. Rather than having the business pay the BOH and the guests pay the FOH,

Vincent Bistro has combined both systems to give everyone the maximum take home

earnings of gratuity pay coupled with the income stability of standard payroll. After

reviewing our means and general payroll spending, we decided $20/hr is a reasonable,

working base pay rate for ALL employees within our business—a fair wage that is often

unattainable through traditional means. To achieve this seemingly unrealistic standard

of pay, we use the same strategies developed by predatory business owners that

normally maximize profits for the business and its investors, and instead use them to

distribute value back to the laborers.

The first step, unscrupulous as it may sound, is to legally define all gratuity collected by

the business as donations, enabling our staff to share more equitably. At the end of the

night, FOH staff calculate the total of all gratuity collected and divide it among all

working employees. This amount equates to an hourly pay rate, usually $10-15/hr.

Payroll funds then kick in from the business to ensure everyone makes at least $20/hr

for their time. If, on busier nights, gratuity exceeds $20/hr for employees, the hourly pay

rate increases to reflect those earnings. For example, on Saturday, September 19th,

Vincent was able to pay all employees—from host stand to dish pit—just shy of $34/hr

for a standard 7hr shift. That night, our dishwasher earned approximately $238 instead

of the $105 he would have received at Chicago’s minimum wage for exactly the same

amount of work. On slower nights with less business and therefore less gratuity, we

offer “shift cuts,” a common practice of eliminating working hours when less labor is

required. Thus far we have found that most of our employees are able to appreciate an

extra day off work rather than stress about missing a day of income when their shift is

not needed.

So, we can clearly see the benefit from the BOH perspective, which is where I’ve spent

most of my career. But let’s not forget about our essential counterparts out front taking

care of our guests and serving our food on the clean plates from the dish pit. Normally,

a server at Vincent earns the city-mandated minimum pay of $6.40/hr. This is

considerably higher than the federal minimum of $2.13/hr, but still a negligible rate

compared to costs of living, especially as much of that disappears into payroll

deductions such as taxes. On top of that pay, the FOH also averages 20% of sales as

gratuity. Standard weekend nights will see about $5,000 of sales through beverage and

food, generating an additional $1,000 in gratuity shared by a staff of five tipped

employees, each earning $200 gratuity plus $44.80 in pay for that busy shift, equating

with the Saturday example above.

Under the new system, servers can still expect this kind of pay from busier nights with

increased gratuity, but also they can also rest assured that all their time spent on the

clock is being paid out at a minimum rate of $20/hr, even in decreased business. This

pay system creates a sense of teamwork across the house divide, increases a sense of

earnings unity, and instills pride in one’s place within the microeconomy. By combining

income sources for all employees, we have both stabilized and equalized the income of

our employees.

Of course, paying employees $20/hr on nights of decreased business can seem risky,

but according to our last Profit and Loss analysis, over the last three months, direct

payroll has averaged approximately 34% of business expense—just 4 points above the

30% industry standard of labor spending. This percentage shows that, while earning

has stabilized and increased for the staff, payroll spending has remained largely

unchanged from more traditional models. From the laborer’s perspective, BOH

employees are able to earn their fair share of gratuity and FOH employees are able to

plan their finances more reliably, rendering the best benefits of both systems accessible

to all employees with fewer potential pitfalls.

Our system of integrating income sources allows employees to choose, even to

specialize in, the tasks they like performing rather than the ones that pay the most or

demand the least. This system motivates the individual simultaneously to become a

greater part of the community and to take more pride in their work. Clean dishes, great

food and drink, and charming service are all equally important factors in a quality

experience dining out. And when every employee has a share in succeeding at every

part of that experience, we all win. It’s time restaurants all paid reliable and livable

wages on both ends of the house.