Per Se ends tipping in favor of service charge

[pam claughton]

Many restaurants already offer health insurance without cutting into servers tips. What is wrong with Per Se's scenario is that they are having their pay cut, but they are still expected to perform at the same level.

That is not a team approach, and I see quite a bit wrong with it. They are not being rewarded for a job well done, they are being punished with a decrease in income.

[raxelita]

But the front of house staff was already pooling. And they had benefits.

[slkinsey]

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

Who says "so many FOH staff has recently quit?"

I would also be interested to know if it is a mathematical fact that total compensation will be lower under the new system when averaged over, say, a year.

[robert40]

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

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Thats strange because I have heard just the opposite from a 'very' reliable source.

[raxelita]

I sez, because I know personally servers who recently quit, and know from them of more. Obviously they can't be absolutely positive that their wages over a year will be less, but their hunch is enough that they quit.

[robert40]

I sez, because I know personally servers who recently quit, and know from them of more.  Obviously they can't be absolutely positive that their wages over a year will be less, but their hunch is enough that they quit.

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Some yes. But all in all it turned out not to be as bad as first expected.

[Carrot Top]

I sez, because I know personally servers who recently quit, and know from them of more.  Obviously they can't be absolutely positive that their wages over a year will be less, but their hunch is enough that they quit.

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I am curious, raxelita. Was there a stable team at Per Se with the servers according to the people you know who quit?

And also curious to know where they are going to next. . .?

[slkinsey]

I sez, because I know personally servers who recently quit, and know from them of more.  Obviously they can't be absolutely positive that their wages over a year will be less, but their hunch is enough that they quit.

Two thoughts on this:

1. Knowing of a few servers who quit and hearing from these same disgruntled servers of more doesn't exactly constitute convincing evidence that there has been a wholesale or statistically meaningful exodus of talent from Per Se's FOH -- or, indeed, whether this turnover is meaningfully different from their usual tunover.

2. Were I in Keller's shoes and some servers quit because they had a hunch that their wages might be less over a year, I'd be glad to see them go.

[raxelita]

I can say that they were happy with their jobs and otherwise would not have left. There is/was a great deal of comraderie among the staff such that much ceremony (outside of the restaurant) surrounded the group departure.

I'm not trying to agitate, nor do I wholly stand against Keller's policy. However, I think though it would have been easier for the entire staff to open the restaurant with that policy. An abrupt cut in salary, even if it is a percieved one, is hard for any employee to take. I do know that Per Se lost some good people because of it.

edited for clarity.

Edited September 10, 2005 by raxelita (log)

[pam claughton]

I sez, because I know personally servers who recently quit, and know from them of more.  Obviously they can't be absolutely positive that their wages over a year will be less, but their hunch is enough that they quit.

Two thoughts on this:

1. Knowing of a few servers who quit and hearing from these same disgruntled servers of more doesn't exactly constitute convincing evidence that there has been a wholesale or statistically meaningful exodus of talent from Per Se's FOH -- or, indeed, whether this turnover is meaningfully different from their usual tunover.

2. Were I in Keller's shoes and some servers quit because they had a hunch that their wages might be less over a year, I'd be glad to see them go.

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You'd be glad to see them go? Why? If they were excellent servers who simply could no longer afford to work there, you'd be glad to see them leave? Sorry, but I see nothing wrong with leaving because your pay is cut. That is not a reflection on the employee as being less than loyal, it's an individual choice as to whether or not they can afford to take a pay cut.

Edited September 10, 2005 by pam claughton (log)

[dvs]

I sez, because I know personally servers who recently quit, and know from them of more.  Obviously they can't be absolutely positive that their wages over a year will be less, but their hunch is enough that they quit.

Two thoughts on this:

1. Knowing of a few servers who quit and hearing from these same disgruntled servers of more doesn't exactly constitute convincing evidence that there has been a wholesale or statistically meaningful exodus of talent from Per Se's FOH -- or, indeed, whether this turnover is meaningfully different from their usual tunover.

2. Were I in Keller's shoes and some servers quit because they had a hunch that their wages might be less over a year, I'd be glad to see them go.

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You'd be glad to see them go? Why? If they were excellent servers who simply could no longer afford to work there, you'd be glad to see them leave? Sorry, but I see nothing wrong with leaving because your pay is cut. That is not a reflection on the employee as being less than loyal, it's an individual choice as to whether or not they can afford to take a pay cut.

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loyalty? again, (and i remember, you've been a waitress) what'r you new??

whether anyone would like to admit it or not, it might be that working for TK & LC is worth the hassle of the tip pool. OR that this tip pool not only provides the FOH staff w/ insurance, but ALSO the BOH. sharing the wealth in such a prestegious (sorry about my spelling) establishment should be seen as pretty durn noble...

[pam claughton]

I sez, because I know personally servers who recently quit, and know from them of more.  Obviously they can't be absolutely positive that their wages over a year will be less, but their hunch is enough that they quit.

Two thoughts on this:

1. Knowing of a few servers who quit and hearing from these same disgruntled servers of more doesn't exactly constitute convincing evidence that there has been a wholesale or statistically meaningful exodus of talent from Per Se's FOH -- or, indeed, whether this turnover is meaningfully different from their usual tunover.

2. Were I in Keller's shoes and some servers quit because they had a hunch that their wages might be less over a year, I'd be glad to see them go.

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You'd be glad to see them go? Why? If they were excellent servers who simply could no longer afford to work there, you'd be glad to see them leave? Sorry, but I see nothing wrong with leaving because your pay is cut. That is not a reflection on the employee as being less than loyal, it's an individual choice as to whether or not they can afford to take a pay cut.

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loyalty? again, (and i remember, you've been a waitress) what'r you new??

whether anyone would like to admit it or not, it might be that working for TK & LC is worth the hassle of the tip pool. OR that this tip pool not only provides the FOH staff w/ insurance, but ALSO the BOH. sharing the wealth in such a prestegious (sorry about my spelling) establishment should be seen as pretty durn noble...

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I think you missed my point. Which is simply that choosing not to participate in the new system does not mean you lack loyalty.

Also, health insurance should not come out of tips...it should be paid for by the restaurant. If many lesser restaurants can afford to do it, surely a more expensive one like Per Se can as well.

Bottom line is Per Se is just another restaurant, not the Holy Grail. There are other great restaurants that one could work at that would not require a significant pay cut for the privelege.

Again, just my opinion. Interesting to note I think that most of those who see nothing at all wrong with this new division of tips, have never actually worked for those tips...as a server. If you had, you'd likely have a very different take on this.

Edited September 11, 2005 by pam claughton (log)

[slkinsey]

Pam, what I said was:

2. Were I in Keller's shoes and some servers quit because they had a hunch that their wages might be less over a year, I'd be glad to see them go.

I personally cannot believe that Keller, et al. are selling this new program to the waitstaff as a cut in total compensation. Indeed, I cannot but believe that they are selling this new program to the waitstaff as an overall long term improvement over the old system -- and, of course, they have data from the French Laundry to back up what they are saying.

The fact is that no one really knows whether the servers are going to make substantially more money or substantially less money under the new program. And if there are some servers who are so heavily invested in the "independent contractor" system that the mere fact that the system has changed and they think they might make less money is enough to make them jump ship. . . yea, I think Keller is better off without them and would be happy to see them go. Why? Because they may be excellent servers, but they're not team players. Not for this team anyway. Not if they're not even willing to give it a try. And the fact is that a place like Per Se will be able to attract other excellent servers who are team players and who want to play on that team.

Since Per Se has been pooling tips since the day it opened, I have a hard time believing that total compensation will be significantly less under the service charge system. Let's look at the numbers and construct what would be a very bad result under the service charge system. Let us suppose a server is bringing in $75,000 a year at Per Se under the tip pooling system. Let us further suppose that total compensation goes down by five percent under the service charge system. These numbers should both be on the high side. So, with a 5% decrease in total compensation, the server would make $3,750 less on a yearly basis. Not an insignificant amount of money, but $5,937 a month instead of $6,250 shouldn't put too many of them in the poorhouse -- and it is a worst case scenario.

[Fat Guy]

If the pool is also being shared with the kitchen crew, the potential for reduced income in the front of the house is greater. I imagine there will be a definite and substantial reduction in income. There will also likely be an increase in security, predictability and workplace hospitability. These things tend to trade off. It's no surprise that, for the current generation of waitstaff, immediate maximization of income is the priority -- the system has created that situation. But for other servers, there may be other priorities. And some people's preferences may change as they are exposed to other systems.

[seanw]

Having worked under both systems, as a chef, i find it extremely difficult to accept the N. American model. A person with any degree of intelligence, experience & passion for what they do should feel undervalued by the inherent inequality. Kudos to Keller, i have constantly questioned the system only to find the general response being "that's the system!". The double-standards shown by hypocritical restaurant owners is tiring, why should anybody want to be a chef, when you could be a server(less hours, more money)- the weakness of such a system, certainly in areas where hardly any to no skills training exists, is that a bunch of people who should be doing something else find the proposition of serving lucrative, get rid of them. Have people who care about the profession work together. Much lip service is paid to the notion of teamwork without the added complication of unequal incomes- either be poor together or moderately well off together, should not be an issue. I continually find it amazing how some servers still try & justify their position to me a chef, i believe they seek credibility from the almost institutional framework of the system & any threat to such will result in disaster for restaurants.....bullshit. So an enlightened approach should be encouraged, especially by the diner who can support the coke habits of both front & back of house(kidding!)

[pam claughton]

Having worked under both systems, as a chef, i find it extremely difficult to accept the N. American model. A person with any degree of intelligence, experience & passion for what they do should feel undervalued by the inherent inequality. Kudos to Keller, i have constantly questioned the system only to find the general response being "that's the system!". The double-standards shown by hypocritical restaurant owners is tiring, why should anybody want to be a chef, when you could be a server(less hours, more money)- the weakness of such a system, certainly in areas where hardly any to no skills training exists, is that a bunch of people who should be doing something else find the proposition of serving lucrative, get rid of them. Have people who care about the profession work together. Much lip service is paid to the notion of teamwork without the added complication of unequal incomes- either be poor together or moderately well off together, should not be an issue. I continually find it amazing how some servers still try & justify their position to me a chef, i believe they seek credibility from the almost institutional framework of the system & any threat to such will result in disaster for restaurants.....bullshit. So an enlightened approach should be encouraged, especially by the diner who can support the coke habits of both front & back of house(kidding!)

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In a perfect world, your scenario is appealing, that all workers would be equally paid and would equally work hard and enjoy their work.

Unfortunately, it is not reality. The reason servers make more money is supply and demand. If you tried to hire servers at a significantly lower wage, you would not be able to do it....not if you wanted quality service. With servers, it really is all about the money, it certainly is not because they love to wait on people, unlike most chefs who do derive more pleasure from their work. The greatest pleasure from waiting tables comes at the end of the shift, when you count the money.

No one has really mentioned what the new division of tips will be at Per se, does anyone know if it is really significantly less to the servers? I read somewhere that tips averaged 22% at Per Se, so already that's 2% missing right off the bat, with the new service charge being implemented at 20%. It could be offset though, by people tipping additionally, which good tippers will generally do anyway.

Pam

[Carrot Top]

With servers, it really is all about the money, it certainly is not because they love to wait on people, unlike most chefs who do derive more pleasure from their work. The greatest pleasure from waiting tables comes at the end of the shift, when you count the money.

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What a shame. And nary a server to deny it?

Well, best wishes anyway to those who decided to leave Per Se for the undoubtedly higher wages and better self-image they surely will find elsewhere.

Did we ever hear where it was they were going?

Or was the thing so terrible to bear that they just had to leave. . .new job offer in the wings or not?

Edited September 11, 2005 by Carrot Top (log)

[TPO]

Even after all these pages, I still am not sure why the service charge makes servers' jobs more secure. To me, the server is still taking the risk, not the restaurant.

I think a service charge is a good idea because, as others have said, in no other line of work does the consumer get to choose how much an employee should be paid after they have received the service. But I also can't think of any other line of work where a person's hourly wages change every day based on how busy they are.

To me, a fair system would be the servers paid a very good hourly wage with benefits and maybe a commission for upselling or going above and beyond what is expected of them. That way, the restaurant is assuming the risk of making enough money to cover those salaries, and the server is guaranteed the same rate of pay no matter how many people choose to dine at their restaurant each day.

[dvs]

FACT: 99% of restaurants in san francisco DO NOT pay their employees insurance. they may contribute, but they still take $$ out of the employee's check to make up the balance due.

please let me know where restaurants DO pay for insurance... i might just consider a move.

[Rebecca263]

I just have to add my worthless opinion here, as service work and the pay thereof are very dear subjects to me. From my own personal experience in food service and in other service industries, I say, BRAVO to Per Se, and I'm sure that after the change has become routine, the pay will be where it was before, if not higher, for the heightened sense of team work it will bring.

[mugsy]

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

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you need to get your FACTS right!

[seanw]

Pam- with all due respect the reason why servers are paid more is because the restaurant patrons allow them! I believe your supply & demand analysis holds little credibility(other systems exist) surely it is because of the support & maintenance of an imperfect system, which of course benefits the patron, that creates inequality. Also i find it incredibly ludicrous that restaurants should make the discrimination of FOH & BOH so obvious- how can they been viewed independant from one another??? The problem is deeply entrenched in the system, i find it extremely diificult on a humane level to accept the theoretical validity of the system- I think it would be sage to consider the repercussions of development of the restaurant sector if it does not become more equal- Europe is struggling to maintain a consistent quality staff because of market forces( certainly in France the difficulty in attracting young French recruits is becoming apparent- Long hours/low pay,why not do something else!) & has developed under a different model which is by no means perfect but at least does not create the division inherent in the US model. French attempts to encourage young chefs into the sector have relied upon reducing the hours worked & creating more leisure time, but also attempts by Ducasse & others to highlight regional cuisines & skills as an important component of tradition, that have to be valued & not lost(personally i see this as crucial, we all enjoy doing things more if they have a perceived value!) Opportunities exist for patrons to formulate their own ideas of how people should be compensated, all i suggest is that we deserve better than what exists now & that perhaps their needs to be consideration of future opportunities if good quality personnel are to be enticed into the fold-

My 2 cents.

[scordelia]

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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Actually, it was recently changed to 17% of gross receipts by the IRS. So keep that in mind when you are tipping. Your server will pay income tax on 17% of your bill no matter what you tip.

Honestly, the European system is better. I like having the service built in with the option of leaving a discretionary tip for excellent service. Also, waiters get a good wage--it is a profession and an honest one.

[Bux]

. . . .

Actually, it was recently changed to 17% of gross receipts by the IRS. So keep that in mind when you are tipping. Your server will pay income tax on 17% of your bill no matter what you tip.

. . . .

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I should consider leaving 19% and sending 1% to the IRS as contribution.

Actually, that 17% is probably a minimum. With most tips being left on credit cards, the paper trail is so great that most tips may be reported straight away by the owner.

[pam claughton]

Pam- with all due respect the reason why servers are paid more is because the restaurant patrons allow them! I believe your supply & demand analysis holds little credibility(other systems exist) surely it is because of the support & maintenance of an imperfect system, which of course benefits the patron, that creates inequality. 

Europe is struggling to maintain a consistent quality staff because of market forces( certainly in France the difficulty in attracting young French recruits is becoming apparent- Long hours/low pay,why not do something else!)        My 2 cents.

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Well, the ultimate solution would be to pay servers a set wage that they would be happy with. However, can that implemented? Where will the money come from to pay that wage? Will it fall on the restaurant owner who will then have to raise prices? Or will it go into a 'service charge'?

I still say it is an issue of supply and demand. Servers expect and will demand a certain level of income. If they don't receive it, if wages are too low they will seek other work, just like your example in Europe, which is also a supply and demand issue as illustrated. Long hours/low pay, why not do something else? Well, that is how it is with servers. They will do something else, unless the money is there.

I don't know what the solution is, but a precedent has been set that servers expect to make a certain amount. It will be hard to take that away from them, and not lose something in the process.

Pam