When Sous Beurre Kitchen opened in the Mission in February, Mauschbaugh followed the example of five Bay Area restaurants that abandoned tipping in late 2014. He printed all-inclusive prices on his menu, which allowed him to pay his kitchen staff well above minimum wage and offer health insurance.
This October, though, Mauschbaugh abandoned the tipless model and issued pay cuts. “We got overrun with taxes, and it became unsustainable,†he said.
Whether or not to accept tips has become a discussion point for restaurateurs all over the Bay Area and, increasingly, the country. Spurred by voter-driven minimum wage increases and the difficulty of finding qualified staff, growing numbers of local restaurants are opting for all-inclusive prices or fixed service charges. In the process, these early adopters have encountered a host of unintended consequences. Some restaurants have adjusted with small tweaks. Others — including two of the original five — have given up the tipless experiment.
The move toward tipless dining is sparked by rising labor costs, which have restaurant owners scrambling to figure out how much they can absorb and how much diners will cover. Restaurant insiders readily acknowledge that “front of house†staff (servers, bussers and bartenders) make much more — sometimes three or four times more — than “back of house†staff such as cooks and dishwashers. The new minimum wage laws passed in 2014 did nothing to resolve this discrepancy. Waiters at higher-end restaurants see the same increase in their base wages as, say, dishwashers, but receive $20 to $50 or more an hour above that in tips. Labor laws can make it tricky for employers to institute tip pooling, distributing tipped income among the entire staff.
Some of the brand-new restaurants that opened with tipless models have returned to tipping or adjusted their strategy as part of their initial price adjustments as they figure out how to become profitable. After two months in business, Cala adjusted its prices by adding a fixed 20 percent service charge to what had been considered all-inclusive prices before; general manager Emma Rosenbush said the main complaint she receives is from diners who would like to see an additional tip line on the credit-card statement so they can increase the percentage.
