Short-staffed restaurants now take tips for kitchen staff
Line cooks and dishwashers are finally starting to get a slice of the tipping pot – and a small but growing coterie of restaurant bosses say it’s a good deal.
Ten months ago, as a nationwide labor shortage ravaged the industry, North Carolina-based restaurateur Patrick Whalen began collecting tips for his kitchen staff in a desperate attempt to stem the turnover and keep the doors open.
While skeptics predicted friction from customers and servers, Whalen says the idea has since snowballed into what he believes is a smart business model.
Its five fine-dining restaurants, including three Church and Union restaurants in Charlotte, North Carolina, Charleston, SC and Nashville, Tennessee, have collected $591,000 in tips for kitchen staff since April. His company, 5th Street Group, has meanwhile matched up to $500 a day in tips at each location – shelling out $486,000 to bring the total back-of-house haul to nearly $1.1million. dollars.
If all of this sounds like madness in an industry with razor-thin margins, Whalen says his offbeat bet has given him a major edge over his competitors as the industry scrambles to recover from the pandemic.
“We’ve been able to meet the huge pent-up demand for restaurants because we have next to no business,” Whalen told the Post, adding, “It’s the most important thing I’ve ever done. “
Also consider the fact that Whalen — seeking to ensure that its servers don’t end up making less money than before the new tipping initiative — has forked out an additional $200,000 to fill the server tip pool in cases where customers shared the tip between the kitchen and the front of the house.
To convince skeptics that he’s not losing money, Whalen tweeted his restaurants’ weekly earnings as well as how much his staff earned in tips.
Since the start of his 10-month experiment, his revenue has topped $20 million, according to the latest tweet from his @tip_kitchen account.
Whalen has sparked the interest of other restaurateurs with its new strategy. Ryan Marks, owner of Chicago-based Legacy Hospitality, said he plans to roll out a tipping program in the kitchens of his three high-end restaurants — The Vig, The Whale and Welcome Back Lounge — after speaking with Whalen .
“It always bothered me that on Saturday our cooks get fired shit and get the same amount of money as a Tuesday,” Marks said. His servers, meanwhile, will “struggle to work on Saturdays” because they will earn more when the restaurants are busy, he says.
John Pope, general manager of the company that owns the famed Cavalryman Steakhouse in Laramie, Wyoming, said he added a line to customers’ bills this summer to encourage them to tip kitchen staff.
“The big resignation compelled us to act,” Pope told the Post. “We asked our clients to help us correct this salary imbalance.”
About 15% of restaurant patrons do, adding an additional $1 to $2 an hour to staff wages, Pope said. The steakhouse now pays its kitchen staff an average of $14.42 an hour, up from $11.70 before tipping.
“Our goal was to get their hourly rate down to $15 and tipping helped us almost get there.”
The extra money can add up to $250 per paycheck, said 24-year-old prep cook Hunter Nordwick. “It’s helped me and my wife and I tremendously as we prepare for our new baby,” he told the Post.
At 5th St. Group restaurants, about 20% of customers tip the kitchen, but that, along with the company’s contribution, drove up the salary of the lowest-paid full-time employee, including dishwashers, at $50,000, Whalen said.
Across town in Charleston, another restaurant group called Macs Speed Shop, which operates nine barbecue and taco restaurants, has been tipping its kitchen staff at one restaurant for about eight months. and is rolling out the program to four new restaurants opening this year.
That added an additional $2 to $3 an hour to the kitchen staff at SouthBound Mexican restaurant, company president Shang Skipper told The Post.
But the rollout was not smooth to the end.
“We’ve learned that we need a better way to track tips because it puts a lot of pressure on our accounting team and communicating it to our employees,” Skipper said. A small number of the company’s servers, he said, “thought the money was being stolen from them and complained about it.”
The rumor of restaurants tipping kitchen staff has quietly spread to other cities over the past year, though at least one restaurant started doing so in 2014. Alimento of Los Angeles is credited with he was the first to share tips with his kitchen staff – although he stopped doing so during the pandemic – and it’s unclear how many, if any, followed his lead eight years ago.
Big Apple restaurateur Willie Degel, who owns six Uncle Jack’s Steakhouse restaurants in New York and Georgia, plans to add an additional tip line to his customers’ checks for cooking as soon as his point-of-sale provider can change its format, Degel told The Post in January.
In the past two years, more people have left the hospitality industry than any other. Many have taken better paying jobs that have more stable hours. In November alone, about a quarter of the 4.5 million people who left their jobs worked in restaurants and hotels, according to government data.
“We consider the restaurant model to be broken right now,” Pope said. “But it’s also an opportunity to reset the economics of the industry.”