Don’t keep the tip: Pittsburgh restaurant trades tips for salaries

As Bar Marco gains recognition for being the first restaurant in Pittsburgh to pay servers by salary, industry employees and experts wonder if the move actually helps wait staffs.

This April, Bar Marco, located in the Strip District, will ask patrons not to tip servers and will, instead, pay their serving staff a salary. All full-time employees, including cooks and bartenders, will receive a salary of $35,000, health care benefits and company shares. 

Kevin Cox, co-owner of Bar Marco, said he thinks server salaries could encourage waiting staff to stick with one restaurant. 

“There’s a lot of turnover and a lot of jumping around in the restaurant industry,” Cox said. 

Cox said he and the other co-owners are seeking wage stability and long-term benefits for employees, many of whom have worked at Bar Marco for multiple years. 

According to the U.S. Department of Labor, Pennsylvania’s hourly minimum wage is $2.83 for tipped workers. This is higher than the federal minimum wage for tipped workers, which is $2.15. Consumers have always been expected to make up the difference in tips until a few individually owned restaurants across the country started refusing tips. 

The discussion began when an employee mentioned hearing national news of restaurants making similar moves, Cox said.

Restaurants that pay servers a salary will employ fewer people  and increase menu prices to make up for costs, according to James Craft, a professor of business administration.

Price hikes may not serve as a deterrent to consumers in expensive restaurants, Craft added.  

“I go [to expensive restaurants] with the expectation of paying a lot of money, anyway,” he said.

Instead of tacking on a service fee for menu items, Cox said, Bar Marco will “add more depth to the menu and start serving dishes that require more skill to make.”

The most desirable payment methods for staff at restaurants can still vary as significantly as in-house recipes.

While some restaurants are adopting a salary or management-paid hourly rate, Craft predicts a majority of the industry will stick with the current tipping standard.

Clientele at upscale restaurants won’t mind an increase in prices if the owners start paying the staff minimum wage, Craft said, especially if more restaurants choose to follow this trend. Less-expensive restaurants, where the clientele are accustomed to low prices, however, will probably stick to standard tipping, according to Craft. 

Another consideration is that servers may not like having a salary. 

Bar Marco owners seek to provide employees with wage stability, but others in the restaurant industry say tipping is one of the primary appeals of serving.

Without tips, servers would treat their jobs differently, according to Katie Vilord, who waits tables at Mad Mex in Oakland.

“There’s just no incentive for people to work as hard [with a salary],” Vilord said. 

While servers in restaurants with wealthier clientele enjoy collecting tips, the average restaurant worker is typically not this fortunate. 

In March 2014, the White House released a report, “The Impact of Raising the Minimum Wage on Women and the Importance of Ensuring a Robust Tipped Minimum Wage,” to push lawmakers toward minimum wage reform. According to the report, servers are three times more likely than the rest of the American workforce to live in poverty. 

Mike Hartman, a server at Waffles INCaffeinated in South Side, enjoys working at restaurants because of the flexibility and said a change in payment would probably mean longer hours. 

“It would be just like any other job,” Hartman said. 

Hartman said he would simply find another job if his employers decide to pay a fixed salary. After working as a restaurant server for over 20 years, from large franchises to family-owned joints and higher-end restaurants, he still prefers to count his tips. 

“You’re going to have no motivation to make sure you’re taking care of your table because you’re getting paid an hourly rate,” Hartman said. 

Xaz Walker, who works with Hartman at Waffles INCaffeinated, feels differently. After working as a server for three years, Walker has grown accustomed to receiving roughly $130 a day in tips. Yet she still disagrees with the payment method and said a salary would not reduce her incentive to provide good customer service. 

“I don’t like that customers are in charge of how much money I take home,” Walker said. “I’m one of those people who just takes pride in my job.” 

Many waiters, like Walker and Hartman, have worked at several different restaurants. 

In November 2014, the Bureau of Labor Statistics published the “Job Openings and Labor Turnover Survey News Release,” which found that food service held an industry turnover rate of 5.6 percent, the second-highest rate among all industries. The entire private sector turnover rate during this period was 3.7 percent. 

Christian Kamensky from Munhall has worked as a bartender, server and server’s assistant in the foodservice industry. He began his career at Buckhead Saloon in Station Square. Since then, Kamensky has held a variety of serving positions at eight different restaurants, including McFadden’s and Town Tavern. 

“I just go where the money is, you know?” Kamensky said. “That’s where you end up staying.” 

In eight years of waiting, Kamensky has served customers who gave him generous tips, while others didn’t leave any tip at all. 

“Not everybody, but a select population come into the establishment, think they’re owed the world and should be waited on hand and foot. People treat waiters like animals. There’s no respect,” Kamensky said. 

Kamensky added that if management decided to give him an average hourly wage, rather than tips, he would not do his job well. For him, serving is not a profession, but a short-term occupation. 

If his boss offered a $35,000 salary, he said he’d stay with the company “because of job security.”

According to Craft, more expensive restaurants tend to have lower turnover rate. 

For Bar Marco, some employees have been working at the restaurant since it opened in 2011. 

Justen Burrell has been waiting tables at Bar Marco for two and a half years. He called the $35,000 salary “standard for a place like [Bar Marco].” In May 2013, the Bureau of Labor Statistics reported that waiters and waitresses on average make an annual wage of $20,880.

Burrell, who also works at the restaurant’s wine bar, looks forward to the restaurant’s changes. 

“People don’t realize what a big deal it is for waiters to have health care,” Burrell said. 

For him, benefits like health care provide incentives to remain loyal to the company. 

Cox said he’s all for a health care plan for the employees at Bar Marco. 

“Hell, you know if we’re going to go this far [by paying a salary], we might as well go all the way and treat [serving] like a true profession,” Cox said.