Pandemic encourages some restaurants to end tipping
Paul Fehribach, owner of Big Jones in Chicago’s Andersonville neighborhood, has wanted to eliminate tipping at his restaurant for years.
He didn’t like having the whims of customers determine how much his waitstaff got paid. Even when tips were generous, it felt wrong that the kitchen staff earned much less in comparison.
But relying on customer tips to subsidize servers’ wages underpins the restaurant business model in the U.S. and is embedded in the cultural fabric. Fehribach worried customers and employees would balk if his restaurant was among the first in Chicago to abandon that structure.
Then came the pandemic.
With restaurants forced to close their dining rooms, Fehribach had a clean slate. He started paying his tipped workers an hourly wage they could live on, and when dining returned last summer, the tipping system didn’t.
“It’s wrong, it’s always been wrong,” Fehribach said. “Our workers deserve the security of knowing what they are making when they come to work.”
Big Jones is among a handful of restaurants in
Chicago moving away from the long-standing practice of paying some workers less than minimum wage if customer tips make up the difference.
The restaurants are raising prices, adding service charges to bills, or finding new sources of revenue so they can raise wages and become less dependent on tipping. It’s a risky move, both financially and culturally, but some restauranteurs say they are emboldened to try because of the disruption caused by the pandemic.
Big Jones, which specializes in Southern cuisine, since June has added a 20% service fee to dine-in bills and orders placed with a live person, and 10% to online orders. That revenue goes to payroll, allowing Fehribach to raise the hourly wage of servers to $18 to $25 per hour, depending on experience.
Kitchen staff also got a pay bump, to $16 to $20 per hour, and he hopes to raise wages more once business picks up.
The change has dinged his bottom line for now, but as dining room capacity restrictions loosen and sales improve he expects it will make financial sense and also allow him to offer everyone health insurance.
While a few customers have posted nasty reviews online, the feedback largely has been positive, Fehribach said. Some customers still want to tip on top of the service fee, so he plans to bring back the tip line to credit card slips to give the option.
Garrett Allain, 37, a server at Big Jones for nearly three years, said he is earning about the same with his higher hourly rate as he was making with tips before the pandemic. On some busy nights he might make $50 an hour in tips, but there would be slow nights when he’d make barely anything at all, so “it balances out,” he said.
Servers at higher-end or longtime president and CEO, Willie Logan, is a fixture in Opa-locka. He was the city’s mayor from 1980 to 1982 and a state representative from 1982 to 2000.
But Opa-locka and the nonprofit have been on shaky ground lately: On Feb. 16, Pate sent a letter threatening to evict the nonprofit from a cityowned building, known as Town Center One, claiming the nonprofit owes the city $300,000 in rent dating back to 2019.
The nonprofit disputes the figure and recently met with Pate to try to resolve the matter, but the two sides are still at odds. Logan is set to address it publicly at a city commission meeting Wednesday.
“I find it mighty strange in timing, where your name and the CDC is connecting and they owe us $300,000,” Pate said to Pigatt during the March 4 commission meeting, adding that a personal relationship between Pigatt and Logan may be playing a role.
Pigatt said there was nothing untoward going on, and emphasized that the manager is solely responsible for any issues related to the CDC’s lease.
Logan did not respond to a request for comment.
Nikisha Williams, the nonprofit’s chief operating officer, referred questions about the ACLU matter to Logan. As for the lease, she said she’s “hopeful that we’ll work it out at the end of the day.”
NO SOLUTION IN SIGHT
It’s not clear if, or how, the tensions between Pate and Pigatt might be resolved.
Pate emailed Pigatt on Jan. 6 to suggest a mediation session led by former high-volume restaurants can make a lucrative living on gratuities, but at small or inexpensive restaurants or in poorer neighborhoods, they barely scrape by.
One Fair Wage, an advocacy group pushing to end the subminimum wage, has been trying to draw attention to the discriminatory aspects of tipping.
Studies have shown Black servers receive less in tips than white servers even when customers rate the service the same. Since the pandemic hit, Black restaurant servers were more likely than servers overall to report a steep drop in tips and experience retaliation for enforcing mask rules, according to a February report from One Fair Wage.
Many restaurants are reluctant to abandon the tipping system and worry how they would manage if local or federal policy eliminates the subminimum wage.
“If the labor cost goes up substantially, we will be forced to increase prices,” said Manish Mallick, majority owner of Rooh Chicago, which serves progressive Indian cuisine in the West Loop. “How will the guests treat that? A lot of guests already say pricing is really high.”
Miami-Dade County Commissioner Barbara Jordan, “to address issues that directly affect our professional relationship and the progress of the Great City of Opa-locka.”
In response, Pigatt said it would be more appropriate to discuss the matter publicly at a commission meeting. Last week, he said the matter would be added to the agenda of a March 31 workshop about the commission’s priorities for the city.
It’s also not clear whether the feud might affect Pate’s tenure in the city. Pate was a finalist in recent months for the police chief jobs in Fort Lauderdale and in Milwaukee, Wisconsin, though other candidates won out.
At last week’s commission meeting, Pigatt suggested Pate may be preparing to sue the city after he finds work elsewhere. Pate bristled at the comment.
“You just made an allegation that I’m trying to set the city up for litigation and look for another job,” Pate replied. “I’m done with you, Mr. Mayor. I have nothing else to say.”
Vice Mayor Veronica Williams, who was first elected in November, tried to play something of a mediator role during the meeting. It was Williams who first brought up the issue publicly, saying she was troubled by the situation.
But so far, nothing has been resolved.
“Right now,” Williams said, “it does feel like both of you are in some type of wrong.”
Aaron Leibowitz: 305-376-2235, @aaron_leib