Why This Oregon Restaurant Instituted a “No-Tip” Policy
Before the pandemic, it looked like American restaurants might have a prosperous future by adopting no-tip policies. According to Eater, the trend of incorporating tips into the price of meals or instituting higher menu prices in order to pay servers a better living wage caught on several years ago and it looked like the United States would been able to embrace a national wave of change. with revised methods for paying servers and staff in 2020. Once COVID-19 swept the world, however, many restaurants rushed just to stay open and it seemed this revised business model had fallen flat during a while as the industry focused on survival.
However, calls for tipping to be abolished have again surfaced. TVO reports that restaurants simply aren’t taking the same money as before, leading to staffing issues. Since the pandemic has also encouraged cashless transactions, some servers are also getting a smaller share of tips as a result. A Portland-based restaurant has finally bucked the trend and made waves thanks to nixing advice, per Insider. Owners of ‘Russian gourmet restaurant’ Kachka in the northwest have now replaced tipping with a mandatory 22% service charge on all bills, raised its lowest wages to $25 an hour and even extended medical insurance benefits to all its employees.
The restaurant released an official statement supporting the change, saying, “Tipping, in its most innocent form, creates inequality between ‘front and back’ workers, and in its most sinister form, continues a tradition of racism.” This bold move made waves in the restaurant industry and many took notice.
A new tipless era may be on the horizon
Kachka, the restaurant that abolished standard tipping practices, continued to counter critics who took offense to their new policy of tipping included via service charge (via Insider). The restaurant said most of its customers already tip more than 20% and the new service charge ensures equal pay for all staff. Kachka has only put the new policies into practice since the start of the new year, but they seem optimistic about change. The only factor they haven’t considered is the emergence of Omicron and the effects the new wave of COVID-19 might have on their business in general.
According to the owners, the restaurant can afford to pay its employees the new higher rates evenly thanks to the increased service charge. They also said that while it might make more sense to just raise prices, the current restaurant business model works against this action and it makes more sense right now to implement tip-in. . Kachka has taken the first step and now only time will tell if the rest of the food industry seizes on this reinvigorated movement to abolish tipping altogether in favor of fixed living wages.