Twin Cities chefs listen when New York City restaurants rethink tipping policies

Scratch anyone in the restaurant industry — owners, chefs, servers, cooks, dishwashers, investors, regulators and, of course, diners — and you'll find an opinion on the practice of tipping.

It's a time-honored tradition. It's ruining everything. It's rewarding. It's demeaning. It's the country at its free-market best. It's the country at its income-inequality worst.

"The status quo is definitely flawed," said Russell Klein, chef/co-owner of Meritage in St. Paul and Brasserie Zentral in Minneapolis. "What's worse is that there's no real consensus on a way to move forward."

Still, the conversation definitely changed last week. Restaurateur Danny Meyer — he's the Meryl Streep of the dining world, a near-universally admired industry luminary presiding over a much-lauded collection of restaurants — announced that he's dropping the tipping system at his 13 New York City properties, which include such landmarks as the Union Square Cafe and Gramercy Tavern.

Kaboom. The Internet lit up brighter than Donald Trump's poll numbers. The topic has clearly been the No. 1 subject of conversation in the local restaurant industry.

"We were all wondering who among the big players would go first," said Alex Roberts, chef/owner of Restaurant Alma in Minneapolis. "Danny is so careful, and so deliberate, and it's so great to see that kind of leadership out there. This isn't a story about greed, about increasing profits. It's about creating an equitable workplace, and about the well-being of our industry."

Gavin Kaysen, chef/owner of Spoon and Stable in Minneapolis, was relieved to see that Meyer is the restaurateur who broke the ice.

"If there's one person who can come out and do this, I'm glad it's him," he said. "I don't know if what they're doing is right, or wrong. But I'm confident that he and his team have put a substantial amount of work behind what they're doing. Everyone in this industry is watching to see what happens."

The change will be rolled out over a year, starting in late November at the Modern, Meyer's popular restaurant at the Museum of Modern Art. Menu prices will rise at least 20 percent to cover costs, and customer checks will no longer include a line for adding gratuity.

"There will be one total, as if you were buying a sweater at Brooks Brothers," Meyer told the New York Times.

In a memo on his company's website, Meyers noted that a primary reason for the change is to compress the wage chasm between tipped servers and other staffers.

"The gap between what the kitchen and dining room workers make has grown by leaps and bounds," Meyer told the Times, adding that, during his 30-year tenure, "kitchen income has gone up no more than 25 percent. Meanwhile, dining room pay has gone up 200 percent."

Meyers' company, Union Square Hospitality Group, employs 1,800 people and serves upward of 40,000 meals a week. As the plan rolls out, wages will rise in traditionally non-tipped positions in both the front and the back of the house, and previously tipped employees will earn the minimum wage ($9 in New York) plus participate in a revenue sharing program.

Sabato Sagaria, Union Square Hospitality Group's chief restaurant officer, told the website Eater that tipped employees should earn the same as they did under the previous system, and that projections show that nearly 80 percent will see their pay rise.

In an online note to his customers, Meyer noted that the cost to diners "won't differ much from what you pay now," but added that the change will be significant for his employees. "We will now have the ability to compensate all of our employees equitably, competitively, and professionally," he wrote. "And by eliminating tipping, our employees who want to grow financially and professionally will be able to earn those opportunities based on the merit of their work."

Meyer is hosting a town-hall meeting in early November in New York City, a venue for his customers to share their feedback.

"I'd do anything to be there," said Lucia Watson, who sold her eponymous Uptown Minneapolis restaurant in January, just short of its 30th anniversary. "It sold out within an hour, and then the waiting list filled up. They should telecast it. This is such a hot issue, and it's something that I've been thinking about since Day 1. It affects everyone."

The wage gap issue is no different in the Twin Cities. Job-hunting line cooks have their pick of $12- to $14-an-hour jobs on Craigslist; tipped servers in upscale restaurants can routinely pull in $20 to $30 an hour above their $9-an-hour minimum wage. The inequities are causing seismic fractures throughout the industry.

"Cooks are the tradespeople of this era," said Roberts. "If you went back 100 years, there were probably 10 cooks or less for every hundred stonemasons, bricklayers or carpenters. Today, that's reversed, maybe even more so. This is the trade of our times, but the pay isn't reflecting that in a healthy way."

Meanwhile, a handful of Twin Cities restaurants are quietly tweaking the tipping process.

At four-star Travail Kitchen & Amusements in Robbinsdale, most diners purchase their seats in advance, using an online ticketing system that includes the tasting-menu-format meal plus tax, gratuity and a processing fee, all in a single prepaid transaction. Prices range $78 to $123 per person, depending upon the day and the time.

The restaurant made the switch to ticketing — and standard gratuity — just under a year ago. "And no one blinked," said chef/co-owner Mike Brown. "None of the feedback we received was about tipping. It was more like, 'Um, I'm buying a ticket to go to a restaurant?' "

The restaurant has a unique organizational chart. Everyone who cooks — or bartends — also acts as a server, a tradition that began when the restaurant opened in 2010, "and we couldn't afford to hire servers," said Brown. Everyone outside the restaurant's ownership team shares pooled gratuities.

"At Travail, we've blurred the distinctions between the front and the back of the house," said Brown. "But the reality in most other restaurants is, the workload is the same, except that in most cases you end up with cooks working in the back making $12 an hour, and people in the front making $20 or $30 an hour. How can there be such a class difference? It's such a touchy subject."

It's not exactly an apples-to-apples comparison — a coffeehouse and a restaurant have fundamentally different staffing issues — but tipping is tipping, right?

In January, Kopplin's Coffee co-owners Andrew and Amanda Kopplin took the radical step of removing the tip jar from the counter of their popular St. Paul coffeehouse and instituted a wage increase for their 10 employees, a move that was funded by raising menu prices by roughly 20 percent.

Ten months later, the verdict is a resounding: So far, so good.

"I'd say 95 percent of our customers really like it," said Andrew Kopplin. "I think that it's because they like the simplicity. There are no hidden or unspoken costs. What they're buying, it costs what it costs, like every other product in the world."

He said the change is also popular with employees.

"They like the predictable paychecks," he said. "In the old system, no one wanted to close, because that's when it's slower, and the tips were lower. What I hear from them now is, 'When I show up for eight hours of work, I know exactly what I'm going to get paid for eight hours of work.' You know, like just about every other job in the world, although that's not always the case with food service workers."

It's a no-tipping zone at the recently opened Co-op Creamery Cafe in Minneapolis, the Seward Co-op's first excursion into the world of full-service restaurants.

The member-owned cooperative emphasizes fair pay and equitability in its employment practices, and when it came to launching a restaurant, "We couldn't figure out how tipping would fit into that policy," said manager Chad Snelson.

Service staffers are paid on the same basis as the cashiers, stockers and other employees working at the co-op's two retail store locations.

Diners are greeted at the door with signage describing how the menu's prices reflect the no-tipping philosophy.

"Explaining to people how we pay for it is our biggest challenge," said Snelson. "If they don't see that right away, there's a possibility of sticker shock." Not that chef Lucas Almendinger's prices are over the top: At lunch, a grass-fed beef burger is $14, and dinner entrees average $22.

Snelson said there are concessions to the competitive restaurant industry. Evening servers are paid a higher wage than daytime servers, for example. And while servers aren't swimming in tipped income, all are eligible for the co-op's health insurance program, store discount and other nonsalary benefits.

Snelson reports that he did not have difficulty attracting qualified job candidates, and employee turnover has been low. Another plus: "Without that giant pay disparity, the front-of-the-house/back-of-the-house dynamic is definitely different here," said Snelson.

Diners can choose to tip, sort of. It's a donation to a local nonprofit; the beneficiary changes monthly (in October, it's the We Win Institute). Snelson estimated that roughly 20 percent of the restaurant's evening diners leave a donation.

"Lots of people are uncomfortable not tipping," he said. "I am."

Follow Rick Nelson on Twitter: @RickNelsonStrib