Food & Drink Mar 30, 2015 at 4:00 am

In Response to the New Minimum-Wage Law, the Lake Union Restaurant Will Immediately Raise Workers’ Wages to $15 an Hour

Ivar's Salmon House is opting for its own version of complying with the city’s new minimum wage ordinance. Jennifer Richard

Comments

1
I always tip in a socially appropriate way (15-20%), even as I feel that the system does not make any sense. So I think it would be a huge and unexpected side-benefit of the 5Now campaign if this model (of Ivar's) took hold the tipping system was generally phased out in Seattle. It just doesn't make sense.
2
Kudos to Ivar's for being aggressive about implementing this. Obviously they were opposed to the idea, so good for them for getting with the program early. Hopefully this works out well for Ivar's employees and all involved.
Agree with @1 that if this beginning of the end of the bizarre tipping culture we have, it's a good thing.
3
So Ivar's wants to give the cheapskates a graceful way out of not tipping? Thankfully I'm not a fan of deep fried fish shavings or - in their "finer" establishments - rubber salmon.
4
@3 that's not what appears to be happening. Now everyone automatically tips as the staff gets a percentage commission on sales.

Does that include drinks? Will the menus spell out this fact? On the surface, for a company that seemed opposed to $15 rather severely, this SEEMS like a fair play and nice model for everyone...
5
So, Jess Spear I applaud Ivars for fully embracing the social experiment and experimenting with the system. This is obviously a reflection on the Jess Spear-envisioned tipless system (she said we should go that way here http://www.thestranger.com/blogs/slog/20… ) because tips lead to sexual harassment of women and make servers uncertain about their wage. Now these Ivars employees have a projection of what their wage will be under the new system and share in the benefit of the business via commission (and stubborn customers who take extra measures to tip).

I can remember making the point in comments here that many of the good servers at restaurants earn more than $15/hr (it's not a "tip penalty") and being chastised as speaking non-truths.... these workers are now on the front lines of trying that out at a semi-formal setting.
6
@3 have you ever been to a place that included a service charge on the bill in lieu of an expected tip? This isn't all that different.
7
@6 - I have and in my experience, this is to prevent large parties from shirking (as employers do) paying the staff...since employers don't really pay waitstaff - they expect customers to pay for that in addition to paying for their meal.

I can't help but feel that this amounts to "neener neener neener, we'll show you. We'll take your tips - at a 21% rate, which is higher than average for sure - and pocket them ourselves...since we've been forced to give you a small hourly increase". This is the real parallel to mandatory tips for parties larger than X (fear of lowball tips).

Having said that: I imagine that the public will continue to tip for good service and it will return to the ideal of being a merit base bonus (though the history does not bear this out). Having eaten in plenty of places in Europe where this is the custom, I'm fine with it. This is just a guess of mine and I'm curious to see how the experiment plays out.
8
The Hernandezes tip 20% and round up, and we do it precisely because of the wage issue, even if the service is less than stellar (everyone is going to have bad days sometimes). A price increase like this, with tipping removed, won't change what we'd pay for a meal.
9
@8, as long as you're trying to make this a debate about tipping, do the Hernandezes tip 20% on the wine with their meal ? Does the $200 bottle of wine mean an extra $40 for the server ?
10
@9 yes, with the caveat that we've never ordered a $200 bottle of wine with a meal (nor would we). But 20% on food and drinks is normal.
11
Hernandez dear, I worked in catering for years, where a 17% service charge was automatically included in the bill. The way they distributed that tip pool was a marvel of mathematics - a portion went to the house, a portion to the manager, a portion to the captain, and the rest was divided up for the waitstaff. (and God forbid you should be off by a penny or so. There's nothing worse than a catering server who feels he's been shafted)

Servers in that situation made very good wages. For instance, at the Four Seasons which paid union scale as a way of keeping the union out, they easily made $25-35 per hour with tip - and that was fifteen years ago.

But catering is very simple: Pretty much everyone is eating the same thing at the same time. It's very seldom you even have to take orders, or really even interact with the guests. Restaurant service is another matter entirely. No tipping on a seafood counter is one thing, but in a dining room it's quite another matter. If they want to retain an acceptable level of service - which is ironically going up what with all the lowbrow demands customers place on waiters these days to take their picture and listen to their problems, and stand by while they deliberate for hours - they are going to have to increase the number of servers on the floor, because there's no real impetus to go that extra mile if there's no tip. Commissions won't make up for that.

12
When you include sales tax, this increase is equivalent to an automatic 23% gratutity, which is a little high Especially since servers will now have no financial incentive to provide good service.
13
Yay! Tipping culture is stupid culture!
14
Quite a bold and visionary application of wages. I'm sure this will be a case study at UW if it succeeds. I would say that the the type of clientele Ivars caters to can absorb the 20% surcharge pretty easily. Also no one commended on the fact their raising their minimum wage to $15 right now, as opposed to phasing it in over the next 4 years. Regardless of the tips this is a huge bump for the minimum wage dishwashers, bussers, etc.
15
Said this yesterday, but I think an interesting study would be how the gradual implementation of rising minimum wages affects the costs of products and resources in Seattle and the region.

What does it do from the the price of fish and chips to King County apartment rents.
16
Yep this is great for the employees and the city. I'll be sure to stop by Ivars for some fish soon.

Servers who don't provide good service will be treated like the rest of us who don't do our job. They will be fired.

There are so many ways servers can juice the tip game and unfortunately, providing good service isn't even in the top five. Generally its by taking advantage of the house, other employees or customers. Eliminating tips eliminates these strategies.
17
@14 The final price of the meal is the same unless you decide to leave a tip, which is discouraged, so there is no 20% increase.
18
If the math is right and most servers make the same off commission as they would on tips, this is great. As a non-WA native, tipping in restaurants is weird because in most states tipped staff make far below minimum wage, like just a buck or 2 an hour, and tipping is to bring them up toward minimum (and well past it in certain places). In WA waitstaff start at minimum. Not to say a good wage for waitstaff shouldn't be minimum plus tips, but if $15 plus commission is similar, that seems a lot more like the owner just paying their staff rather than letting them use table space for a buck or 2 an hour and counting on customers to bring them up toward livable income.
19
I like what Ivar's is doing at the Salmon House. We just got back from Italy, and it was nice to go to restaurants and know that menu prices were all you paid -- no tipping and no added sales taxes. I hope others emulate this Ivar's model.
20
Really glad to see this happen, I will intentionally support restaurants that do this. A worker's pay should not be determined by the individual prejudices of each customer -- it completely undermines any protections of equal opportunity which apply to most other types of wages. Restaurant patrons have the freedom to pay servers less based on race, gender, or sexual orientation. It's a fundamentally flawed system.
21
I applaud Ivar's. I always tip 20-25%. With the wage increases and prices of food about to rise I will no longer tip as I once did. It will be !0% tops. Servers no longer will need tips. Actions have consequences.
22
Originally, I did the math and found that if I cut my usual tip (20%) down to 15% after the wage increase, assuming the costs/bill would increase by 30%, that I would be giving the same amount of money in tip for the average cost of a night out. I'd like to be able to give the same amount in tips and want to make up for that 9-15% difference. You know, just add a 5% on top of what they're supposed to be getting.
24
It is great to see Ivar's trying the no-tip experiment. It seems to work great in Europe, where seldom do I see a place that accepts tips. I'm glad to see it here as I think the tipping process is unfair and has too many expectations.

For example, when a restaurant is super busy and the wait staff and kitchen are busting their asses, the service might be lousy because the management didn't put enough people on the shift. Should you tip less?

Or, it's slack time and you're getting perfect service but the waiter is hardly working. Do you tip more?

And how do you compensate the kitchen staff, anyway?
25
Because of this I will never eat here again.
27
What is it about tipping in a restaurant; when you go into a late night convenience store do you tip the clerk? they are likely only earning minimum wage; they are on their feet all night and at somewhat more risk than wait staff. I have been a dishwasher before in a very busy restaurant and no tips ever came my way and believe me I hustled and busted my ass all night long. The $15.00 minimum wage is overall very fair; the commissions Ivar's offers spreads it out amongst the whole staff which is also very fair. This way the restaurant works as a true team.
28
mistral,

the relationship between tipping and service quality has the been the subject of numerous studies, and the research has consistently shown that the link between tipping and service quality is quite weak and probably spurious. The same body of research shows that there are specific things servers can do to increase average tips, but they're only tangentially related to what we as consumers would typically call "good service" (it's stuff like touching customers on the back or shoulder, writing "thank you!" or drawing smiley faces on the check, and so on. A lot of the findings are summarized here:

http://tippingresearch.com/uploads/manag…

How confident are you this will be a functional pay cut for front of house employees? If they're stuck at 15 indefinitely, as the rest of the city catches up, it eventually will be, but right now they'll be getting a $5.53 raise in hourly salary, and the 8% commission should make up for approximately half the tips they were receiving. Are servers at Ivars, a mid-priced casual restaurant, currently pulling down more than $10.50-11 an hour in tips on average? I suppose it's possible, but from what I know about what's typical in the industry I doubt it.
30
nice, mistral wants the health care system to run on tips. it just makes sense, people!
32
Boy, people sure are attached to their tipping. Lots of pretty silly arguments come out to justify anger over a restaurant going to a simpler system that works fine in many parts of the world.

I applaud Ivar's for this, and look forward to seeing how it works. I have long stopped believing that a tip acts as much incentive for service. People tip what they tip, almost regardless of the service, so making servers' incomes dependent on the luck of the draw in which customers they serve is pretty backward.

I like this for the same reason I like Uber's payment scheme -- I don't want to include stupid, petty calculations of someone's value every time they provide me a service, especially when 99% of the time, I'm just going to calculate it based on what's customary. Just pay them a fair price and get over it.

If you're really so upset about the service you get at a restaurant, talk to the manager. It's a lot more likely to have an actual effect than just stiffing the waitstaff.
33
Huh? By the time I still my server, I will have received all the service, good or bad, I was going to receive for the evening. Of course I would anticipate some hostility if I kept going back as a known stiffer, but that's because I'm stealing a big chuck of their income.

That has nothing to do with what you claimed. What you claimed is the quality of service will decline in a non-tip driven environment. There's no evidence that's generally true, and some real evidence it isn't.
34
I'm a veteran of many restaurants and I see their confusion over the last 5 years, about why they cannot hire and keep quality staff in front or back of house. They wonder why their kitchen fills up with a team of immigrants with no formal training, or felons with serious life problems, and why it doesn't operate like it should. Then I see the restaurants that are functioning making money hand over fist and they pay their staff, they pay them well, above the "usual rate", and they work hard to provide a professional environment. Their employees are happy and they can afford to live in or near seattle where they work. Businesses like Ivar's who are trying to get away with something, usually by capitalizing as much of their employees labor as possible, are failing. That attitude is not popular in seattle in spite of the recent influx of crass texan and socal capitalists. Pay your employees, let them have tips, and it will bring only good things Ivars, and maybe I could stand to eat at your establishment.
35
At least Ivar's is up front about it. When liberal/socialist policies are forced on businesses that increase labor% from 30 to 40+%, businesses have no choice but to offset those additional costs. Ivar's may be in the headline, but every business big and small will have to make a choice: raise prices, cut staff hours, eliminate or cut benefits or, close shop.

Customers also have the choice of going to the people's republic of Seattle to eat at inflated prices. Or eat outside the city limits for 15-20% less.

Like most liberal policies, they came up with a catchy slogan: $15now. Heck who couldn't be in favor of getting paid more. Unfortunately, the real world and most of the United states revolves around an economic system that has made America the greatest economic power in the world. Liberals don't understand economics. They believe that government can impose a regulation that everyone makes $15 per hour and it will have no repercussions. They think the economy operates in a vacuum, when the fact is that the average restaurant bottom line is 4-6%. Not only will the minimum wage be $15 per hour but employees currently making more than the minimum wage will want to be equally compensated. This chain reaction will change the employment landscape in a way that even Shawna and the wise members of the Seattle City Council will regret. At the very least the folks that blindly followed and supported this movement will.

Add a 22% increase to your budget. What choices would you make to pay additional costs?

We all know how this will turn out:
1. Price Increases
2. Benefit Cuts
3. Staff reductions
4. Fewer opportunities for young workers. Businesses will prefer to hire more educated applicants that will flood the market due to wage increase
5. Fewer diners in Seattle due to higher prices
6. Restaurant closures. Many businesses like Subway, McDonalds, Jersey Mikes, etc are lumped into the big business category when they are truly just a franchise with limited flexibility to increase prices.

The Seattle economy should not be subject to a socialist experiment.


37
If $15 is a living wage, I don't understand the opposition to ending tipping. This is a better system than having to rely on the kindness of strangers. If you're so generous that you still want to add 15-20%, I'm sure you will find a way to do so. And you can still come and comment and tell the rest of us how superior you are.
38
So mistral, what about the back staff being stiffed. If the dishwasher isn't tipped does that mean the pots and pans aren't cleaned so thoroughly? If the cook isn't tipped does that mean the steaks are not properly broiled and so on down the line? What you seem to be advocating is a form of extortion; don't leave a tip and next time I'll spit in your food. If you go back far enough into the Stranger archive in the beginnings of the "I Anonymous" section you'll see a perfect example of this.
39
Obviously, the most effective way to let a waitperson know they're not doing a good job is to leave them a clear, unmistakable message that A) they did a bad job, or B) you're a cheap bastard, or C) you forgot, or D) you have some complaint about the restaurant that's totally unrelated to them. I can't believe people would try to abandon this valuable and natural direct-feedback mechanism!
40
This article gives enough of the info for you to model out how this will affect servers.
Based on this system, servers will be worse off if their hourly sales are more than $100 per hour.
Servers will actually be better off if they sell less than $100 an hour. Since a server should have anywhere from 6-15 covers per hour, this means that they would have to be working at a VERY cheap restaurant to be under this $100 hourly sales numbers.
For example, a server who sells $250 per hour on a 5 hour shift will take home $260 under the current system. That same server will take home only $211 in the new system (about $50 less everyday) This loss gets bigger the longer you work and the more you sell per hour.

If you're a server at Ivar's, get out. You're getting a worse deal.
If you're BOH at Ivar's, congrats, you are getting a better deal.

btw I'm assuming that the servers didn't have any of their current tips allocated to BOH staff already.
42
mistral,
Yes it was a creepy place (McChord AFB Officer's Club, 1973 & 1974, $1.68 hr, no benefits no tips) and the place was very busy six nights a week. Tipping was actually pretty good but none of it got past the wait staff. If as you say the better places pool their tips and have a uniform allotment this is fair, but I'll bet most places really don't do this. Some of the higher priced establishment have the waiters collecting all tips the giving kickbacks to the head waiter, host and chef. A small a amount then goes to the bussers and bar backs. Rarely does anything really make it back into the kitchen. That's why you always see job openings for dishwashers and line cooks. As to the extortion, it is what you seem to imply when you say try stiffing a waiter or bartender and see what happens. I presume that when you say stiffing you mean leaving a paltry ti or none at all. I do tip well, especially at places I frequent;
I've even received occasional comped meals.
43
I, too, have been tipping 20%, rounding up, including on drinks, for at least a decade. This model will work well for me. Sadly I don't often get near Lake Union, but I can say that the rise in menu costs, with the understanding there is no tipping, would work well for me. We've always gotten good service, but I always felt that was due to having a good attitude with wait staff, not because of tip.
44
Hey @35, very nice to see you on Slog for the first time. Love your theories! So with the highest minimum wage in the country for several years, all the things you have predicted by now must have come true! And now that you mention it, there is indeed hardly a single franchise restaurant in the City of Seattle. You can wander for miles and not find a Subway. Since hardly anyone eats out any more, I guess that's why there's hardly any restaurants left. Thank goodness we can still go for fish n chips in White Rock, Arby's in Post Falls, McDonalds in Moscow and Applebee's in Gresham. Because you know otherwise, poor restaurant-deprived Washingtonians might just starve.
45
Aheh...and predictably: here are the "ok, you made us give you a raise....the hell if I'm paying for it" crowd.

There was never any way such a wage increase was going to happen without the cost passing through to the cost of the goods. Period. The manouever to redistribute the income from the front of the house to the back (as I noted @7) is pretty cynical, but then I think they are betting (as am I) that the real price increases will be the additional tips people continue to give (despite the tipless policy) to front of the house staff, who will likely not see a net change. It's pretty easy to imagine that wait staff was already doing better than $15/hr in a lot of places...they will likely wind up in a wash. I would imagine overall volume drops, which may hurt wait staff as much as it hurts management.
46
All of these comments, both pro and con, would have their valid aspects and dashes of bs, if not for one small, teeny tiny problem.......
$15/hour is not a liveable wage in Seattle. Not by a LOOOOOOOONNNGGGGGGGGGG shot.

And if I hear anyone complaining about having to pay .50 more for dinner, I'll go punch a baby.
47
I tip 20% when the dining experience meets expectation otherwise 10% but under this way of thinking the "tip" isn't for service. Get poor service? Tough!
The customer has no control over how much of a "tip" to leave because its already factored into the price and isn't even called a tip anymore its become a subsidy.
The business has to raise prices over 20% and rationalize that the customer wont be paying that much more than before the rise. How is this any different from forced redistribution of revenue by government decree?

Enacting a tip-credit would be more rational
48
I love this new policy. Great work on Ivar's parts.

The whole tipping culture is stupid. It's not voluntary.

Now at Ivar, tipping is 100% voluntary. If you want to tip, you can still do that but it should now be 100% merit based.

Please wait...

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