DeRusha Eats: These Restaurants Have Banned Tipping, Raised Wages
MINNEAPOLIS (WCCO) -- For more than 100 years, we went out to eat. We got the check. We did some math in our heads and decided how much to leave as a tip. There's a gratuity line right on your bill, where you get to help pay the wage of the server.
But visit Victory 44 in north Minneapolis or the new Upton 43 in the Linden Hills neighborhood, and at the bottom of the menus you'll get a separate printout that explains they're not accepting tips.
"I think it's the business' job to compensate them fairly," said chef and owner Erick Harcey. "Now your money is going into the dish. There's no gratuity line."
With political leaders discussing minimum wage hikes and owners looking at disparities in pay across restaurant staff, Harcey is on the front edge of a national examination of the best way to pay servers.
"The last minimum wage increase hit," Harcey said, "we thought, 'How do we get in front of it?'"
Right now servers in Minnesota are getting $9 per hour minimum wage, plus whatever they make in tips.
At Upton 43 and Victory 44, starting servers will make $17 per hour, if the server works 40 hour weeks, it's a salary of about $38,000 per year.
"A great paycheck," said Harcey, noting that he'll be adjusting people's pay upwards if they get specialized training, or if they are outstanding employees.
St. Paul coffee shop Kopplin's banned tipping and raised wages in February of 2015, but Victory 44 and Upton 43 are the first two full-service restaurants in the Twin Cities to go to this model.
Even though much discussion has been made about the challenges of paying cooks and dishwashers, Harcey said the new system will eliminate the disparities among servers caused by the time of their shift.
"They may make a ton of cash on a Saturday night, but they come in Monday morning and by the time their shift is done they've made $17," Harcey said.
The question is whether diners will miss the control offered by the ability to tip, or be startled by higher prices on the menu. At Upton 43, it was easy to just launch a menu with new prices. At Victory 44, prices all went up.
"There's a range. At a minimum there's 18 percent. We thought that was a pretty standard gratuity level," Harcey said.
So Victory 44's popular Perfect Burger went from $14 early last year to $17.
But Harcey isn't worried about charging that much for a burger.
"If I had my way, I'd charge $30," Harcey said. "It's a delicious burger."
The truth is, if you tip 20 percent, the change from $15 to $17 actually saves you a little money, he pointed out.
At Upton, there was no drama about price changes, the menu launched with starters from $14 to $16 and main courses around $30.
"Our price points with the gratuity built in are competitive with other restaurants," Harcey said.
The change is allowing him to give a benefit beyond paid time off or paid sick time: He said he hopes to store up money to pay staff members their salary when the restaurants close for the holidays.
"We hope it becomes mindless," Harcey said. "You realize what you ordered, you pay for it, you go home, and hopefully come again the next day."
He said he hasn't had trouble hiring staff members, at least not so far.
"They know their income ahead of time," Harcey said. "They're working better, they're happier, there's less stress."
If customers insist on tipping, Harcey says that money will be donated to a charity.
Upton 43
4312 Upton Avenue S, Minneapolis 55410
Victory 44
2203 N. 44th Avenue, Minneapolis 55412
