Over the weekend the Chronicle's Jonathan Kauffman took a deep dive into the topic of tip-pooling, explaining how California is now one of seven states that have a universal minimum wage that applies whether you're a tipped employee or not. In 43 states, there are still two minimum wages, with one far lower that applies if you're a tipped worker like a server or bartender, meaning that in many cases those workers are not being paid much more than cooks once tips are added in.
Across the country, it's common for servers and bartenders to tip out their less well compensated coworkers, like bussers, food runners, and hosts, who nonetheless contribute to customers' experiences. But increasingly the topic of how to pay kitchen staff a living wage has become front and center for Bay Area restaurant owners especially, both as servers are making ever larger gratuities as overall prices increase, and as it becomes increasingly difficult to staff kitchens when affordable housing especially for someone making little more than minimum wage has become scarce. San Francisco may be one of a number of progressive cities nationwide who are instituting a local minimum wage that's scheduled to hit $15/hour in 2018 (it goes up to $13 this year), and now the California statewide minimum is set to hit $15/hour by 2022, according to an agreement announced by the governor today. But when it comes to pooling tips, things enter a gray area when you get to line cooks and dishwashers, who are not technically in the "chain of service" and it has remained illegal, nationwide, for managers to share in tips.
Thus at places like Aatxe and State Bird Provisions, you have "back of house" staff like cooks delivering plates to diners and serving diners directly at chef's counters, thereby making them, more clearly, part of the service staff.
Comal owner Andrew Hoffman was just quoted last week on this topic, in a piece for San Francisco Magazine, pointing out the added wrinkle of how to create an equitable wage structure if minimum wage for both the front and back of house rose to $19. "It’s not that paying the dishwasher $19 is going to bankrupt you," Hoffman said. "It’s if you pay him $19, what are you going to pay the sous chef? That’s the part that people forget about."
But as the Chron piece explains, a decision by the Ninth Circuit in February has complicated matters for California restaurateurs engaging in this hybrid sharing of gratuities. The case pertains only to Oregon, and that state's law regarding tip credits that are applied against the minimum wage something that doesn't exist here in California. But nonetheless it creates an awkward potential legal precedent in which the court declared cooks and dishwashers to be outside the "chain of service" in one nearby state, and it makes restaurant owners here afraid of being sued down the line. (Just look at the two lawsuits filed against Michael Chiarello and his restaurant Coqueta earlier this month, one of which alleges illegal tip pooling and underpayment of wages to servers.)
At restaurants like Comal in Berkeley and Salsipuedes in Oakland, there's now a 20-percent automatic service charge applied to all checks, which allows the restaurants to share the wealth however they like and get around any vagaries in the law. In the case of the latter restaurant, owner Jay Porter instituted the charge immediately after the Ninth Circuit decision.
Expect to hear plenty more on this topic as it all shakes out, and as restaurants across town begin to follow suit with automatic service charges. It's a tense topic, especially for those who feel strongly that gratuities should be tied to service and at diners' discretion. Unhappy customers who feel ripped off after paying the mandated fee despite mediocre service are going to protest by not returning to the restaurant and talking shit on Yelp thus there've been several recent flip-flops on this practice as restaurateurs run scared.