A Pittsburgh eatery has done away with one of the most common practices in the restaurant industry. Bar Marco announced last week that it will eliminate tipping and instead pay its full-time employees a living wage.
Full-time servers at Bar Marco currently make $5 per hour in addition to tips, which is above the state-required minimum wage for servers. But starting in April, the restaurant will instead pay full-time employees an annual salary of $35,000 with health care and company shares.
The idea for this change came to Bar Marco owners about a year ago, when they were looking for a way to offer health care coverage to employees.
Co-owner Bobby Fry told the Pittsburgh Tribune-Review:
“The light bulb went off. If we were going to offer health care, why not offer a complete employment contract and do away with gratuity all together?”
In addition to no more tipping and creating a more regular pay schedule, the restaurant also hopes that the change will help create a more positive work environment for employees. While tipping has been an accepted practice in the restaurant industry for years, having the guarantee of a regular paycheck could encourage employees to stick around longer. And since employee turnover is usually a big part of the food service business, the new format could make a big difference.
Both owners and employees seem confident that the change will work for this particular business. In fact, Bar Marco doesn’t even plan to raise menu prices to cover the change. Instead, it plans to change the reservation system for its Wine Room so it will be able to accommodate more customers.
Bar Marco isn’t the first restaurant to decide there will be no more tipping. In fact, several restaurants have made headlines in recent months for doing the same. However, each one has chosen its own model for doing so. And just because a tip-free system might work for some, doesn’t mean it will for every restaurant out there.
In some settings, customers might not mind slightly higher prices instead of paying a gratuity. But in others, customers might be more likely to go for lower prices and using tips as an incentive for great service. Bar Marco’s management has come up with a system it thinks will work for its customers.
What do you think about no more tipping at restaurants?
Bar Marco
I think tipping has its place, but not as a major component of employee compensation. I like the idea here and suspect that turnover will become virtually non-existent for this restaurant. Being fair with employees creates a virtuous circle that benefits everyone involved.
Annie Pilon
I completely agree. I’ve worked in restaurants and it’s horrible when you work hard for a whole shift and get a couple tables that just don’t tip. Having that guarantee of a fair paycheck would definitely make servers happier/less likely to leave in my opinion.
Aira Bongco
Tipping is more than employee compensation. It is about awarding people who do great work. I don’t know if eliminating it with a fixed pay is a good idea when it comes to the overall quality of the work. They may do good in the beginning but I don’t know how they will do over time.
Annie Pilon
I understand the concept of tipping as a method of motivation for servers. But when they make so little they completely rely on good tips for their pay and I don’t think that’s really fair. Some people just don’t tip/tip so little even with great service. However, if they got paid a fair wage and customers could leave (optional) small tips on top of that for great service, I think that would be fair.
Waiting staff are paid a wage here in the UK, and tipping is seen as an extra for good service. I’ve never really understood why restaurants would not treat their staff with respect and pay decent wages to start with.
Annie Pilon
I think that sounds like a much better system!
Philip Carter
In Australia a living wage is enshrined in our IR legislation. Basically, the idea is that if a business cannot afford to pay a decent wage, it is not viable (no more an argument for lowering wages than, say, the cost of raw materials is an argument to require suppliers to charge less). Our minimum wage is $16.87 ph, most industry awards require significantly higher rates and many employers choose to pay above award rates. We do not tip in most situations and part of our cultural shock overseas is in accepting that tipping is expected.