Non Tipping Policy

While tipping is not mandatory in most of the United States, it is accepted at almost all sit-down restaurants, which offer table service and have many servers depend on tips as an essential part of their wage. Generally, the average tip is 15% to 20% of the total meal cost or can be found by multiplying the tax by two (only in states where food is taxed, unlike Delaware). Recently, an increasing number of restaurants have carried out a new non-tipping policy, so their employees will be paid at a higher level and not be subject to minimum wage restrictions and the desire of tipping customers. This new policy will cause the price of entrees to be pushed higher so the restaurant can compensate wait staff employees. The idea behind this is to

He is risking scaring off consumers through significantly higher prices. He also risks scaring off service staff by changing the way they make money. He will end up paying higher credit card processing fees because of higher prices. He will have to renegotiate with landlords who calculate his restaurants’ rent based on a percentage of topline revenue which is standard practice meaning that the real estate suits could reap a windfall simply as a result of higher prices without greater sales. FICA credit, part of a law that gives restaurants huge breaks for paying waiters in tips, which for a group of USHG’s size translates to $1 million to $1.5 million in annual tax credits will also be gone. Meyers is hoping the switchover to Hospitality Included will help dampen the impact of wait staff defections by creating a critical mass of restaurants employing the policy. The rapid change seems likely to help keep customers happy by increasing the prices without scaring diners off. The more familiar consumers become with dealing with tipless venues, the more comfortable they will be with the higher prices required to make the system

The main reason restaurants have been going back to tipping is because they have been wearing away their staff, mostly servers. Restaurants using the no tipping policy are “burning through people”. An average employee at the restaurant will most likely stay less than a year, with some leaving in as little as three months. By fixing this, restaurants need to start paying people more, especially people in the kitchens. When a USHG restaurant converts to hospitality included, its back of house employees will earn no less than $11/hour, with the floor increasing to stay ahead of the New York fast food minimum as it incrementally grows to $15 by 2018. Cooks will start at $14/hour. “What we’re hoping is that increasing wages will act as a magnet towards recruiting, towards getting the right talent in our kitchens, and then stabilizing the back of the house, so we can give the gift of a regular schedule.” (Cambell) Many positions will be on schedules of 50-55 hours per week, with the hours over 40 earning time-and-a-half. All staff who are currently tipped will see their base income fortified by a revenue share program. 79% of the dining room will see their pay increase under hospitality