HR Strange But True

Mr. Pink May Have Been On to Something with His ‘No Tipping’ Logic

In an iconic scene from the movie Reservoir Dogs, Steve Buscemi’s character, Mr. Pink, gets into a heated argument over why he refuses to tip the waitress that is serving the table. During the debate, Mr. Pink successfully voices his concern over tipping and influences one of the other characters to follow suit. It appears art is now dictating life, as one Oregon restaurant has eliminated tips for its waitstaff.

The Chicago Tribune (Tribune) is reporting that the restaurant, Le Pigeon in Portland, Oregon, eliminated its tipping policy back in June in an “effort to even disparate pay among restaurant staff and offer them more predictability, as well as a means to cope with rising minimum wages and other industry changes.”

How was Le Pigeon able to make this work? The Tribune reports that the restaurant raised its prices by 20% and now compensates employees by mixing base pay with a percentage of the food and beverage sales from the day the employee worked. Back-of-house employees—dishwashers, cooks, etc.—received a slight pay increase while front-of-house employees—waitstaff, bartenders, etc.—all received a slight pay cut.

While you may think this is unfair, all employees share a cut of the profits, evenly. “The staff in our restaurants are well-trained, intelligent individuals and they are passionate,” Andy Fortgang (of Le Pigeon) told the Tribune. “It seems fair they be paid an award for that, instead of just leaving that to someone who may or may not leave a tip.” Not only is this logic benefitting waitstaff, it’s also benefitting back-of-house employees as well.

The Chicago Tribune also reports that “Researchers at Cornell University and Ohio State University found that in large metro areas, the median weekly wages of front-of-house employees exceeded those of back-of-house employees by 29 to 80 percent. At fine dining establishments, where the gap is largest, that means a median of $792 versus $441.”

While this “no tipping” theory seems to be working for Le Pigeon, the Tribune reports that this may not work for every restaurant. For example, Trou Normand and Bar Agricole in San Francisco, California, implemented a no-tipping policy in 2015 but quickly recanted when it started losing staff to competitors that offered tipping.

Another restaurant in Portland, Oregon, had the same policy but did away with it as well. The restaurant’s owner says, “It was clearly an idiotic business model. The people who really lose out are the servers, they are just going to get less and less and less.”  Whether or not you agree with tipping, you still have to pay your employees in accordance with the Fair Labor Standards Act, which sounds like a win-win for everyone—at least from a Department of Labor standpoint!