Court Ruling Shuts Kitchen Staff Out of Tip Pools, Prompts Some East Bay Restaurants to Consider Going Tipless | East Bay Express

Liz Sassen (center), co-owner of Homestead, says that if she goes without a head, she no longer has to worry about legal decisions related to tipping. Credits: Bert Johnson / File Photo It has long been the practice in restaurants across the country for servers to “tip” at the end of a shift and give a portion of their tips to the buses and bartenders – and often the kitchen workers like them Line chefs and dishwashers. After all, a good twist deserves another, and for a waiter whose tip is often tied to the timeliness and skill of the kitchen team, it only seems decent to spread the fortune.

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The turning point

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Based on a recent 2-1 ruling by the Ninth Circle Court of Appeals, this type of tipping arrangement is now illegal – at least in cases where a restaurant is trying to make it mandatory. The case in question (Oregon Restaurant and Lodging Association v. Perez) is of particular concern for restaurants in California, where some restaurateurs have taken advantage of the previous legal gray area to give their chefs and dishwashers extra cash. Here in East Bay, at least a few restaurateurs said the recent court ruling could cause them to rethink their compensation model – perhaps to take an all-encompassing, center-less approach.

The background to all of this is a growing industry-wide feeling that there are unsustainable wage gaps between employees in front of and behind the house in restaurants. For my February 18, 2015 cover story, “The Tipping Point,” which examined the impact of Measure FF’s impending minimum wage hike on local restaurants in Oakland, restaurateurs told me it wasn’t uncommon for a server to have more than Earned three times As much as a typical line chef, if tips were taken into account. The increase in the minimum wage, from which servers in particular benefited (earning the minimum wage plus tip), only exacerbated this inequality.

Jay Porter. Credits: Bert Johnson / File Photo At the time, some restaurateurs in Oakland, including Sal Bednarz (Actual Cafe, Victory Burger) and Preeti Mistry (Juhu Beach Club), said raising the minimum wage would likely make them even more aggressive in their consolidation policies of tips to ensure cooks and dishwashers reap some of the rewards of change too. In an email, Bednarz said he found the court ruling “worrying” and that it likely brings him “one step closer to smooth service” – although he still has deep concerns about how successful this is in reciprocity restaurants like these would be the one he’s running. Meanwhile, Jay Porter (The Half Orange, Salsipuedes) said that although he believes the federal court ruling will eventually be overturned, he is currently considering charging a 20 percent service fee in lieu of tips.

In some ways, fears about the legal and financial implications of the court ruling provide some level of confirmation to the small handful of restaurants in Oakland that have had no problem responding to the minimum wage increase. At Homestead, co-owners Fred and Liz Sassen abolished tips last March and increased their prices across the board by 20 percent – a move they can use to distribute this income as they see fit. The result was that cooks and other back-of-house workers received a sizeable raise. Servers, on the other hand, were paid significantly less as soon as tips were removed from the picture.

Of course, one of the reasons the tipless movement still hasn’t started in the Bay Area is because it’s not without its challenges – especially when it comes to keeping seasoned waiters. Homestead’s Liz Sassen admitted that immediately after the move, the restaurant lost almost all of its staff in front of the house – an understandable development given that a tipped server at another restaurant nearby might be $ 10 or $ 15 more per hour earned. And even now she’s struggling to hire the most experienced servers who know they can make big bucks by getting great tips. Instead, the restaurant’s new approach is to hire less experienced staff and simply train them in advance.

But Sassen said she has no regrets: “I can look my line chefs in the eye and know that they are getting a fair cut,” she said. Since the restaurant replaced these first employees, there has been almost no turnover – a product that, in Sassen’s opinion, represents an improved staff culture. And of course the restaurant remains unaffected by current and future legal provisions relating to tips.

Many restaurateurs have spoken about how difficult the minimum wage increase has made it to do business. She said she wanted her to know that with the no-tipped model, we don’t struggle too badly.

Ultimately, however, Sassen believes that despite the court ruling, most restaurants will just keep doing what they do. In fact, at Juhu Beach Club, Mistry said she would be comfortable continuing with her tip-sharing guidelines as it was not mandatory. When hiring, it is made clear to all of their staff that the expectation and culture of the restaurant is for the waiters to cut their tips at the back of the house. However, the servers are free to choose how much they want to determine, and Mistry herself never touches her tip.

Similar to Sassen, Mistry said the most important thing is to create a sense of camaraderie and fairness among her staff – both in front of and behind the house – so that when the group of six arrives ten minutes before closing, the chefs feel like she does benefit.

Even so, Mistry believes the tipping model will eventually become the norm. “I’m looking forward to being a part of it,” she said.