Per Se ends tipping in favor of service charge

[DoctorPaul]

Per se calls it a service charge: "Beginning September 1st, in lieu of gratuity, per se will be adding a 20% service charge to all guest checks."

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A couple of questions and points to make.

Does NY State/City law provide for 'minimum' state wage law for service personel or ist it like MA where service personel does NOT receive state minimum wage?

Do you really think that restaurant patrons know the difference between 'Gratuity/Tip' and 'Service Charge' ?

I think not. I'll bet that more than 75% of all customers think that this 'service charge' will be paid out to servers (mainly).

Which in turn the establishment does not legally have to, since "Service" in this case is not defined.

Do you believe customers at Per Se will totally and understandably stop leaving a tip, or will they, as most patrons more often look only at the bottom line Dollar amount, still tip? And, even if they understand it, then at what percent?

Also, is it not true, and I stand corrected - as always, that the larger the bill the lesser the "percent" amount of tipping/

Example: Party of six, total bill with tax and beverages $ 900.00

next, three parties of two, each party's bill $ 300.00

I venture to say party of six will tip $ 150.00 (16.7%)

and the other three parties will tip $ 60.00 ea. (20%)

I do "tip" at 20%, never 'after tax', Cocktails and Cordials/Liqueurs and bottled Wine at 15%. Wine above $ 50.00 - 10%, plus $ 10.00 for the Sommelier/Wine Steward. And if there is a "Service Charge" - NO Tip/gratuity.

Does this make me cheap? Remember, I retired after 49 years as Chef. Does that make a difference? You tell me. You can't hurt me - I am not allowed to posess feelings anymore.

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Consumer beware! I agree with Peter. It's time to ask specific questions when encountering such presumption.

My heart goes out to those sincerely desiring to make a living, namely hard working men and women who wait tables and aptly serve their guests. Hopefully, each client will be treated with the respect he deserves from management on down, while being empowered to use his head and heart in rewarding good service. Is this part and parcel of the dumbing down of America? Perhaps it's just another "hidden tax."

In most professions, full disclosure is not only ethical, but mandated and considerate. Let's demand just that!

Edited August 20, 2005 by DoctorPaul (log)

[Carrot Top]

In most professions, full disclosure is not only ethical, but mandated and considerate. Let's demand just that!

Well said, Doctor Paul, and fair enough.

The problem is that restaurants do not have a standard rule of practice that is mandated. Each one is different. . .each one operates as best it can within its budget and profit constraints to try to survive.

And often those profit margins are not terrific, particularly for small independent-type places.

I am sure that someone here can supply the number percentage of how many new restaurants opened go out of business in the first year.

It would be interesting to see if there are other "professions" that have the same percentage.

I am not saying "aye" or "nay" to what you suggest. . .just saying that the restaurant business can not be compared in many ways to "other professions".

Perhaps, if it does become more professionalized in terms of requiring formal educational credentials from all that work there. . .and pay good wages with benefits to all that work there. . .and put in more controls and assurances and mandates. . .it would become more like other professions, and then of course the costs of everyone's meals would go up. But then again, many well-regarded corporations have been outsourcing and going to part-time employees in the past ten or fifteen years anyway, just to survive (supposedly) and they do not have the same precipitous situation as many restaurants.

To my mind, asking that the corner restaurant do this is rather like taking the tack that as far as buying, say, clothing goes. . .that one would only want to buy if assured that the clothing were sweat-shop free, etc etc. This is a wonderful idea. But to really do it, and insist upon it. . .would certainly be difficult for both the buyer and the industry. It is just plain complicated.

Taking this idea a bit further, it must be said that restaurants are in one of the larger categories of employers for workers "without" formal skills. In the US, we have a lot of immigrants that would be out of work if the situation developed so that everyone who worked at a restaurant needed credentials or formal education.

There will always be people in the world "just starting out", there will always be those who need a very basic sort of job. . .and this industry provides that living for many people. Although it is not the ultimately best thing in the world, in my opinion, it needs to be there, this opportunity. That. . .is one of the things that has made this country a wonderful place. . .the fact that one can "start from nothing".

What would be interesting to see. . .just for comparison purposes. . .is a budget from an average independent restaurant. . .one that did not make a ton of money, but that did manage to survive, in the usual way that restaurants do. Take that budget and re-do it including good wages and professional level compensation for all of the staff. Then figure out what the average cost per meal would be.

Then figure out whether the customer would pay for it. Ultimately, this is what it comes down to.

.......................................................................

On the other hand, most "businesses" do not allow access to their operating budgets unless they are a publicly owned company and even then there is only the simplest of records provided to the public. Why should restaurants have to do this? They are there to provide food and service. Any critical response should really be to that food and service, not to their internal financial operations.

Again, unless they are a publicly-held restaurant.

Really, there has to be some line drawn as to what people (as customers) are allowed and encouraged to poke their noses into in this world. The focus of the business should be able to be on providing the best product they can, not on explaining "how things work" for anyone who happens to be curious, or for anyone who wants to be "persuaded" to spend their money at a certain place.

It is very easy, though, to vote with one's feet if the food or the service does not meet one's standards in a restaurant. . .so that option is always there. And the option is always there for businesses to explain how they work, if they wish to. But they should not "have to" unless the consumer's physical or mental health is at stake (and this is covered in restaurants by extensive health code laws)(at least the physical part, who knows about the mental part. . .sometimes the way people relate to food is somewhat nutty ); or if the consumer's pocketbook is directly tied to the operation, as it would be if they were stockholders.

Let the restaurants concentrate on doing what it is they set out to do. Provide their customers with a great meal and great service. There are textbooks than can be referred to on this subject for anyone who wishes to understand the underlying stuff better.

Edited August 20, 2005 by Carrot Top (log)

[scordelia]

Rich, teamwork is not communism. It is an essential part of operating a successful business at anything larger than the scale of a hot dog cart.

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But even with teamwork, some individuals are just better at a job than others. And in my opinion those individuals should be compensated accordingly.

When that "15% must" system was put in place, some waiters made significantly more than others - and that wasn't by accident.

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Sometimes it is by accident. When I worked at a certain upscale Chicago establishment, a certain player from the Bulls (not MJ) liked to frequent this place, and we drew straws to see who had to serve him. This player was very demanding, wanted special things, sauce on the side, etc and never tipped.

Lots of people tip badly (the 6% lawyer in a previous post). My husband for one (well, not anymore, but I was appalled on our first dinner date and gave him a big lecture about the lives of waiters and how the tax law works--surprising he married bossy me anyway).

[pedro]

Can any of you remind me why we tip at all? Would service be better if I spend 100 bucks on wine than 50? Would it be better if I order caviar than chicken salad? Why is 15% or 20% the figure no matter which restaurant or city? This list could go on and on, but a tip which is not truly discretionary is not a tip to me.

[Bux]

Can any of you remind me why we tip at all? Would service be better if I spend 100 bucks on wine than 50? Would it be better if I order caviar than chicken salad? Why is 15% or 20% the figure no matter which restaurant or city? This list could go on and on, but a tip which is not truly discretionary is not a tip to me.

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We tip mostly out of social custom. It's hard to offer rational explanations beyond that. I will say that a waiter serving $75 meals might serve three in the time it takes to serve a $200 meal and the tip on the $200 meal may have to be shared among a larger number of servers.

The problem is that in the US, a tip is not a discretionary addition to a waiter's salary. Waiter's are paid less than the mimimum legal wage as the restaurateur is allowed to assume the waiter will tipped well. There are professions or jobs where one is paid according to the pleasure of the cutomer after the fact. Most jobs assure one of a minimum salary until you're fired. A tip in France or Spain is very different from a tip in the US, and in Japan, to leave a tip is considered insulting.

[pedro]

The problem is that in the US, a tip is not a discretionary addition to a waiter's salary. Waiter's are paid less than the mimimum legal wage as the restaurateur is allowed to assume the waiter will tipped well. T

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Does the law impose a minimum tip?

[Bux]

The problem is that in the US, a tip is not a discretionary addition to a waiter's salary. Waiter's are paid less than the mimimum legal wage as the restaurateur is allowed to assume the waiter will tipped well. T

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Does the law impose a minimum tip?

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No, but the IRS (our income tax collecting agency) requires restaurants to report gross figures and expects tips to be reported as at least a certain percentage of that. Theoretically, as I understand it, a waiter could actually be expected to pay taxes on a greater figure than he actually collects. Of course most diners in the US who pay by credit card, also tip by credit card, so there's a paper trail that exerts its own force these days.

[oakapple]

Per Se is advertising on Craig's List for servers. One wonders whether predictions of a mass exodus among current staff are indeed coming true.

[Todd36]

The problem is that in the US, a tip is not a discretionary addition to a waiter's salary. Waiter's are paid less than the mimimum legal wage as the restaurateur is allowed to assume the waiter will tipped well. T

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Does the law impose a minimum tip?

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No, but the IRS (our income tax collecting agency) requires restaurants to report gross figures and expects tips to be reported as at least a certain percentage of that. Theoretically, as I understand it, a waiter could actually be expected to pay taxes on a greater figure than he actually collects. Of course most diners in the US who pay by credit card, also tip by credit card, so there's a paper trail that exerts its own force these days.

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The IRS has won court cases when waiters unreported cash tips as compared to credit card tips. Courts have held that if in a given restauant, people tip say 10% on cards, they should also be tipping about 10% when they pay in cash.

[jbonne]

an interesting twist on this theme. i was reminded yesterday (by this Seattle P-I article) that several states, including Washington, do in fact mandate that servers are paid the state minimum wage. (Washington's minimum is $7.35/hr.)

yes, this still means that service is a minimum-wage job. it does not, however, mean that it is a sub-minimum-wage job, as is largely the case across the East Coast. To me, this rather substantively alters the "anything less than 20 percent deprives servers of their livelihood" argument.

note also that California similarly has a minimum-wage requirement, with a minimum of $6.75/hr. (it does allow for voluntary agreements to have employees docked for house meals.) worth considering in the context of the French Laundry and Chez Panisse service charges.

in any case, more food for thought ...

[Fat Guy]

42 states, plus DC and Puerto Rico, either allow the tip credit or have a lower minimum wage for tipped employees. Eight states do not allow the tip credit.

The tip credit, however, is not so much about the wages of servers. It does affect wages, but it doesn't make the difference between over and under an annualized income based on the hourly minimum wage. Waiting tables is not a minimum wage job. I don't know of any full-time server in any state who is making anything close to as low as minimum wage -- even in a chain diner, it's a much higher paying job than that, at least that's the case with my friends who worked at places like Denny's and Friendly's in Vermont when I was in college. And of course at top urban restaurants $60,000+ is common and $100,000+ can happen. (If you live in a state where the minimum wage is $5.15, and you work 50 weeks a year for 40 hours a week, your gross income will be $10,300).

Rather, the issue with the tip credit is that it's a thinly veiled subsidy for restaurateurs. Restaurants, unlike most every other type of business (save for in a few other tipped industries), are allowed to have customers pay substitute wages to their employees so they don't have to pay real wages. Of course, this issue exists absent the tip credit as well. It's inherent in the tipping system. But the tip credit makes it worse.

[John Whiting]

worth considering in the context of the French Laundry and Chez Panisse service charges.

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Several years ago, Chez Panisse did away completely with both tipping and service charges, attempting simply to pay a decent wage; but the tax structure was so biased against this that waiters suffered and they opted to go to the present system. Or so I'm told by one of the directors, who hasn't yet misinformed me.

[jbonne]

worth considering in the context of the French Laundry and Chez Panisse service charges.

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Several years ago, Chez Panisse did away completely with both tipping and service charges, attempting simply to pay a decent wage; but the tax structure was so biased against this that waiters suffered and they opted to go to the present system. Or so I'm told by one of the directors, who hasn't yet misinformed me.

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so an equivalent gross income by a server composed of straight wages would in fact have netted them less than the same gross amount composed of wages/service charges?

[Fat Guy]

I'm not sure there's any difference from the server's perspective between a dollar of wages and a dollar of (declared) tips -- they pay FICA and all that stuff on both. From the restaurant's perspective, however, I think there are a few more taxes on income than on service charges -- though I'd defer to a restaurant accountant on that one.

[Sparkitus]

What other services are you allowed to pay for, after the fact, according to your whim? That doesn't strike me as a right; it strikes me as an anomaly.

Amen. And while we're at it, in what other business can you demand something for free for a little inconvenience? Ten minutes in the bar and no free drink? Grow up. More than that, different answer.

True story: I had a table of four having a wonderful time, loved the food (they shared two entrees, btw) and the wine and the restaurant. Check time comes and they're outraged that the wrong bottle of wine is on the check (they have not paid yet, mind you), so I correct the check and return it to them, apologizing for the mistake. They demanded I take 30% off the bill (where that number came from I have NO clue)! I apologized again and again and emphasized that we weren't ripping them off, it was a minor, careless error that we corrected immediately at no cost to them. I also made a point of telling them that I had no intention of adjusting their check on demand, again with an apology. Their response was that the waiter was "going to have to take a hit." and they stiffed him.

I have no idea what that brings to the discussion, but I feel better now.

[Sparkitus]

The fact that fine dining service in France is on the whole better than in the US is, however, a telling counterexample we can offer to people who claim that without tipping service automatically becomes terrible.

I'm not convinced of that "fact." I had such disinterested service at l'Atelier de Joel Robuchon last April (on my birthday, no less) that I was outraged. For the last half of my really expensive lunch ($176 for me alone), my so-called waiter was out in front of the restaurant smoking a cigarette and chatting up a girl. In general, the service elsewhere was about on par or worse than what I experience here in the states - and I saw a LOT of understaffing everywhere, surprising considering their "system."

[Todd36]

This weeks New Yorker has an article about Per Se's new tipping policy.

[pam claughton]

I'm curious as to how much of a hit the servers will be taking. Are they still getting the lion's share of the service charge, or is it evenly divided among everyone? I'd be furious if that were the case, as that is money taken out of the server's pockets.

I'm totally against tip pooling anyway. I would never work in a restaurant that did it, as it is just terribly unfair. I've heard horror stories from servers who have. Good, professional servers can handle more than their co-workers. They also have many more requests from regular customers. Why should one server who may make double the tips of her less skilled colleague have to hand over money that she has earned?

Tip pooling is not as common as you would think. Not in Mass anyway. I've worked in many restaurants over the years, from casual to fine dining, and none had pooling. If the server earns a tip, that tip is hers. You do of course, tip out, depending on the arrangement of the restaurant, a percentage usually to the bar and bus help. No one else.

Sounds to me like Per Se, in their attempt to make service more even, is going to find that it backfires as they lose servers who will not put up with unfair paycuts. The end result, service will decline.

Edited September 10, 2005 by pam claughton (log)

[dvs]

I'm curious as to how much of a hit the servers will be taking. Are they still getting the lion's share of the service charge, or is it evenly divided among everyone? I'd be furious if that were the case, as that is money taken out of the server's pockets.

I'm totally against tip pooling anyway. I would never work in a restaurant that did it, as it is just terribly unfair. I've heard horror stories from servers who have. Good, professional servers can handle more than their co-workers. They also have many more requests from regular customers. Why should one server who may make double the tips of her less skilled colleague have to hand over money that she has earned?

Tip pooling is not as common as you would think. Not in Mass anyway. I've worked in many restaurants over the years, from casual to fine dining, and none had pooling. If the server earns a tip, that tip is hers. You do of course, tip out, depending on the arrangement of the restaurant, a percentage usually to the bar and bus help. No one else.

Sounds to me like Per Se, in their attempt to make service more even, is going to find that it backfires as they lose servers who will not put up with unfair paycuts. The end result, service will decline.

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what'r you? new?? (sorry, i just had to say it... no malice intended...)

french laundry, not to mention chez panise (and a gazillion others), have been operating this way for a while now & they're still getting 4 stars (for service as well as food).

[pam claughton]

I'm curious as to how much of a hit the servers will be taking. Are they still getting the lion's share of the service charge, or is it evenly divided among everyone? I'd be furious if that were the case, as that is money taken out of the server's pockets.

I'm totally against tip pooling anyway. I would never work in a restaurant that did it, as it is just terribly unfair. I've heard horror stories from servers who have. Good, professional servers can handle more than their co-workers. They also have many more requests from regular customers. Why should one server who may make double the tips of her less skilled colleague have to hand over money that she has earned?

Tip pooling is not as common as you would think. Not in Mass anyway. I've worked in many restaurants over the years, from casual to fine dining, and none had pooling. If the server earns a tip, that tip is hers. You do of course, tip out, depending on the arrangement of the restaurant, a percentage usually to the bar and bus help. No one else.

Sounds to me like Per Se, in their attempt to make service more even, is going to find that it backfires as they lose servers who will not put up with unfair paycuts. The end result, service will decline.

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what'r you? new?? (sorry, i just had to say it... no malice intended...)

french laundry, not to mention chez panise (and a gazillion others), have been operating this way for a while now & they're still getting 4 stars (for service as well as food).

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No! Hardly new. But you must admit Per Se, and Chez Panisse and a handful (hardly a gazillion) of others have taken this approach are all high end restaurants, actually more like the pinnacle, the very best restaurants. Chez Panisse and The French Laundry are also located in areas where they stand out as one of the best options for a server to work. In NYC, there are many, many other options for professional wait staff to explore. I think that service at Per Se may suffer some, as their best servers will leave to go where they can make the kind of money that they are used to earning.

Servers are essentially sales people. If you remove tips, and institute a service charge, you remove the incentive to go above and beyond with service. If you know you could be rewarded by an insanely large tip, you will make that extra effort. I think what many people in the restaurant world forget is that most chefs and cooks are in the kitchen because they love food, and are passionate about their job. Most servers have a love/hate relationship with their jobs. Serving the public is probably not what most of them would choose to do. They are in it for the money. Take the money away, and you remove the desire not only to do the job, but to do it well.

Just my take on it. From a former waitress.

Edited September 10, 2005 by pam claughton (log)

[robert40]

I agree in 95% of cases server's have a love/hate relationship with their job.

But I'm not convinced that is the case in a Keller establishment because I think most if not all servers at Per Se consider their job a career and not, I'm really a actor/actress and I'm doing this part time.

Also I believe one may be willing to sacrifice present financial gains and have more long range goals in mind. Because lets face it; the sky is the limit for those employees dedicated to Keller.

[pam claughton]

I agree in 95% of cases server's have a love/hate relationship with their job.

But I'm not convinced that is the case in a Keller establishment because I think most if not all servers at Per Se consider their job a career and not, I'm really a actor/actress and I'm doing this part time.

Also I believe one may be willing to sacrifice present financial gains and have more long range goals in mind. Because lets face it; the sky is the limit for those employees dedicated to Keller.

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I agree for the most part, but think much will depend on how big of a pay cut they will end up taking. If it's too big, it may not make sense for them to stick around, if they could do better elsewhere. Hard to say, am sure it varies with each individual. I can't imagine any of the servers are too thrilled about it though or buy into the idea that it will create more of a 'team environment'.

[slkinsey]

Why should we assume the servers at Per Se will be taking a pay cut at all? Or, if they are, that it will be more than one or two percent? Besides, it has been a fairly standard practice for some time in good American restaurants to add a set service charge for parties of 6 or more.

[raxelita]

They are taking a pay cut, it's a fact. That's why so many FOH staff has recently quit.

[Carrot Top]

*If* (and to my mind that is a big "if" in the likes of a place like Per Se) there were servers who were performing at a much higher or at a much lower level than their peers, then that would have been not only inappropriate for this level of dining but also would reflect very poor management.

My feeling is that indeed, there may have been a "team" of sorts existing there in the first place. A team of professional service people that are dedicated to this field. (It does happen, though it requires a consistent effort made by management through training and support in daily team-building, too.)

The formalization of the service charge will guarantee a steady and reliable income to all members of this team as long as they hit the levels of performance they are supposed to, which is "high". Beyond that, it seems it might ensure them some benefits such as health insurance also.

What could be wrong with that?

Edited September 10, 2005 by Carrot Top (log)