By Marion Lynch
You’ve just finished a meal at your favorite local restaurant. Your server brings your check. Now it’s time for some arithmetic. To tip on the total, plus tax? To tip on full cost of that pricey bottle of wine on the bill, or is that too much? Maybe the service was under whelming? It’s time to get out your calculator.
For those who are frustrated by end-of-dinner mathematics, bill-paying in certain New York City restaurants will soon be easier.
Famed restaurateur Danny Meyers, CEO of Union Square Hospitality Group, which operates iconic Manhattan restaurants including Union Square Café and Gramercy Tavern, announced last week that tipping will be eliminated at the group’s restaurants by the end of the year, and menu prices will rise, in order to improve wages among kitchen staff.
Meyer’s move is being closely watched by restaurants in New York and New Jersey, but are area restaurants ready to make such a change?
Chef Nicholas Harary, chef/owner of Restaurant Nicholas in Middletown, says he is ready to embrace the policy if it comes across the river.
“It’s a good thing,” he said, adding that he believes it will improve salaries for cooks, who don’t benefit from tips.
The standard pay for servers in New Jersey is $2.13 an hour, who count on tips to earn a living wage. An elite few make substantial incomes.
Cooks don’t have the advantage of supplementing their pay with tips. They’re paid an hourly wage, sometimes starting at the minimum of $8.38, with pay for line cooks averaging $10-$12 an hour.
Cooks, Harary said, are paid on a percentage of food sales. Since the recession began in 2008, most restaurateurs have been reluctant to raise prices even though food costs have risen.
“They’ve been artificially held down,” Harary said, and as a result the pay for kitchen staff has remained stagnant.
His cooks are highly skilled and in many cases spent years in school to learn their trade. The hours are long and the work is challenging.
Three years ago, he looked at the low pay that cooks were paid at Restaurant Nicholas, and gave them raises
“I decided that I’m going to make less money this year and raise the pay of my cooks,” he said. “Now they are the best paid cooks around.” Getting and retaining qualified kitchen help is easier now.
There’s no difference to the customer price-wise, he says. A customer who tips $20 on a $100 check will still pay $120, without the math calculation at the end of the night.
The state will see an increase in tax revenue from the higher checks, and servers will be recognized as professionals, rather than relying on the generosity of customers to make a living. A steady salary will help them when they apply for a mortgage or a loan.
Tim McLoone, owner of a dozen restaurants, including the Robinson Ale House in Red Bank, McLoone’s Pier House in Long Branch and the soon-to-reopen Rum Runner in Sea Bright, doubts a no tipping policy will work for him.
He and his management team are aware of the pay inequities that exist in the business, and have taken some steps to change it.
“Nobody here is making less than $10 an hour,” he said. That includes hostesses and other front of house workers who traditionally made $8.50.
McLoone questions whether Meyer’s metrics will work in the long run. “He’s raising prices by 21 percent, but says he is giving 21 percent raises,” he noted. In his book, that won’t add up.
The formula could work well in high-end restaurants like Nicholas, where a dinner check hovers around $100 per person, he said, but in more moderately priced eateries a 20 percent price increase won’t cover the raises.
And not ever y server is making a good living, he said. On a good night in a high-end restaurant, a server can make $400, he said, but at lunchtime on a slow day in a typical restaurant, he or she is lucky to make $30.
Like Restaurant Nicholas, McLoone raised wages because of the inequities in the system.
“A lot of people who work for us in the kitchen work a full shift and leave for their other job,” he said.
McLoone wanted to give kitchen staff a share of the tips, but it is illegal. That’s when he decided that raising their pay was the best solution.
The benefit for McLoone’s is more consistency in the kitchen, with fewer employees leaving in search of a bigger paycheck.
Marilou Halvorsen, president of the New Jersey Restaurant & Hospitality Association, said her organization will host a roundtable discussion next month to build consensus on the issue among the member restaurateurs.
In preliminary polling of some of the state’s restaurant owners, Halvorsen believes that a move to eliminate tipping won’t work for everyone.
“If you pay wages to all your workers, what does that mean for taxes, insurance and other payroll expenses?” she asked. “Not only is it an increase in the wage, it is also an increase in payroll costs.” With profit margins for most restaurants in the “single digits,” Halvorsen said the change poses a challenge for many owners.
The restaurant and hospitality business are heavily labor dependent, she said, and any increase in labor costs cut heavily into those slim profits.
The minimum wage for tipped workers is $2.13 in New Jersey, and if tips don’t bring the hourly wage to the state minimum wage of $8.38. But Halvorsen said the average tipped employee makes “far more” than minimum wage, with servers making an average of $16 $18.
Few, if any kitchen workers in Garden State restaurants make minimum wage, she said, and with the exception of entry-level employees, pay is at least $10, with prep cooks earning about $17.
Chef Nicholas Mercogliano, president of the Jersey Shore Chefs Association, says many chefs are leaving the business, and low wages are just one reason.
Chefs, he said, work long hours, weekends and holidays. “You’re always on your feet, you’re getting burned, and it’s very fast paced and a high stress level.” With skilled sous chefs making only $15 an hour in some area restaurants, it’s hard to make a living in New Jersey.
He anticipates there will be an exodus of line cooks from New York restaurants to the fast food industry as minimum wage rises to $15 an hour, over the next three years.
