New Jersey restaurants pay more to attract workers. But here’s why tips aren’t going anywhere yet.
Tim McLoone hand-signs all paychecks for his 10 New Jersey restaurants – over 1,000 checks in any given pay period. At one point during the pandemic, as he prepared for payday, he couldn’t help but notice that some of the checks from some of his staff were shockingly light.
“I would see a name that has been with us for a long time. They make $ 13 an hour and they’ve been with us for maybe six, seven years, ”said McLoone. “And I’m like, ‘What is this? No.'”
The awareness led McLoone to lower dishwashers, hostesses and food prep workers to a minimum of $ 15 an hour across the board. But McLoone never considered changing the salary of tip employees.
“The way everything is currently structured,” McLoone said, “we wouldn’t be able to do that.”
NJ Advance Media reported last week, after conversations with several former restaurant employees, that raising wages and potentially ending the tip system could help address the labor shortage that has besieged the industry. services as it seeks to bounce back from the COVID-19 pandemic. NJ Advance Media followed up with several restaurateurs this week to see if this could happen.
The bottom line? Salaries can go up, and in some cases they already have. But the tipping system won’t go away anytime soon. Restaurant owners say they just can’t afford it, while speculating it would lead to worse service in restaurants and possibly even lower paychecks for waiters in some cases.
The minimum wage for tipped employees in New Jersey increased from $ 3.13 to $ 4.13 in January 2021, and will rise to $ 5.13 in January 2022. If an employee with a tip does not earn 12 $ an hour for a tip shift plus a salary of $ 4.13, the restaurant has to make up the difference.
“Tons of other countries have much higher minimum wages, and fast food chains are still plentiful and popular around the world,” said Jackson, a former server at a Jersey City restaurant who left the restaurant. industry during the pandemic for safety reasons. “Basically, if everyone made $ 15 an hour and shared the tips on the service, you would have much happier workers.”
Greg Cochran, a Jersey City resident and general manager of Murray’s Cheese in New York City, told NJ Advance Media last week that many restaurants are able to stay in business because they “shift a cost of labor. ‘work for your customers’ by making the service staff count. on tips.
But McLoone says that even if restaurants started paying higher salaries to service staff and stopped asking customers to tip, the cost of labor would still come back to customers as menu prices increased. to compensate.
“If they shift the burden to the restaurant, and we have to make minimum wage for everyone?” McLoone said. “That same steak that cost you $ 39 will cost you $ 49. Our margin is tight enough as it is. “
McLoone also believes that removing the incentive to work for tips could impact service quality across the industry.
“I think if people were willing to drop their level of service, then by all means let’s just pay people a flat rate,” McLoone said. “The waiter, or the bartender or the busser, or the runner who all participate in this tip pool, they have to scramble to make their money. It gives the customer a better chance to have a really great experience. I think that’s how it should stay.
Neptune City pizza institution Pete & Elda’s now pays its service staff $ 8 an hour plus tips, moving owner George Andretta said smaller number of customers during COVID was needed and therefore less tips.
But if the floor rose to $ 15 an hour at the same time, what would that mean to anyone already on that rate?
“I would love to do that,” Andretta said. “But if you get $ 15 and someone says, ‘I’ve been working a long time and I’m at $ 20. So if you have five, I must have five, “and then everyone in between, which will kill you.”
Culture Collective, the hotel group that owns popular Asbury Park restaurants Barrio Costero and Reyla, recently adopted a new salary structure that included a company-wide pay rise to $ 12 an hour as well as tips shared for all team members, including dishwashers and cooks.
“Our industry’s pay scale is completely upside down. It’s just 100 years of “Well, that’s how it was done. So let’s keep doing it, ”said co-owner Chris Viola. “When an event like this happens, you have the opportunity to make a change that can last a very long time and potentially change the way people see us as a business.”
That doesn’t mean the decision was easy. Viola says he knew waiters and bartenders who are used to lucrative tips that aren’t diluted by a larger tip pool would be reluctant. This system helps bridge the gap between quiet days in restaurants where little tips are made and the booming Friday and Saturday night shifts that can lead to considerable financial windfall.
This logic is part of the reason Andretta is against ending the failover system.
“If you’re a good waiter and you work in a busy place, you can clean up. There are places where you can work and earn $ 200, $ 300, $ 400 a night, ”Andretta said. “If everyone wants to make $ 20 an hour, now you’re going to come in, you’re going to work four hours for $ 100. Where I bet you get there (now and) in four hours you can win $ 200, $ 250. I think it will hurt him more. “
But Viola says the company believes it was the right thing to do, and it has indeed helped attract hires even as the rest of the industry struggles to staff for the looming post summer boom. -COVID.
“The people we hired were most interested in the clear trajectory of growth, which you typically don’t see in a lot of independent businesses or in the hospitality industry,” Viola said. “So it works really well … I think it makes restoration operations a lot more opportunity driven.”
But even with one of the most progressive pay structures in the industry, ditching the tip has never really been on the table for Culture Collective at this point – being the first New Jersey restaurant to go without a peak could make headlines. positive newspapers, but negative reactions if the restaurant goes it alone.
Many talk about the European model, with higher prices and no tips. But it would take time to condition New Jersey consumers to view the menu this way. Until this day, Barrio Costero and Reyla hope to have found some kind of balance.
“It’s a societal thing. What if they change that here in the United States or even New Jersey or Monmouth County? It is not a battle that I am ready to fight alone, ”said Viola. “But we have found a happy medium so far, which gives the team member, the waiter, the bartender, confidence in the work and consistency of their income, while allowing the consumer to enjoy the experience they have.
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Jeremy Schneider can be reached at [email protected]. Tell us your coronavirus story or send a tip here.