Amanda Cohen’s restaurant Dirt Candy reopened, larger location has booked up with reservations from hungry customers for months. But in the past iteration of the restaurant, she struggled to keep her best cooks.
So in the new version, she’s paying everyone, in the front of the house and the back of the house alike, at least $15 an hour. “I’m hoping it’ll keep talent around,” she said. “Definitely in the back of the house, it’s an incentive to stay.”
Chefs behind the scenes work hard but aren’t usually paid as much as servers or bartenders. Without a higher wage, though, “How do I expect people to live in this city?” she asked. “It’s an incredibly expensive city to live in.” The city has been deemed the most expensive in the country for families and the cost of living has increased a staggering 23 percent since 2009. And while New York City experience used to be seen as vital for any cook’s resume, that’s no longer a hard and fast rule. “We were, I think, losing cooks for the last couple of years to other great food cities,” she said.
The higher wage for everyone, from servers to dishwashers, is also coupled with a new policy that does away with voluntary tipping, instead adding a mandatory 20 percent administrative fee to bills. “It just seemed fairer all around to everybody,” she said. “Cooks are notoriously not paid a lot of money to do their jobs, they work very long, hard hours. But they are always guaranteed their pay.” The math is reversed for waiters. “Servers, on the other hand, aren’t always guaranteed their pay but, especially in New York, they tend to make a lot of money at certain kinds of restaurants. It seemed like the way we could balance this out so everybody was paid a fair, living wage and everybody was guaranteed their wage.”
Those in the back of the house are “pretty excited” because “they’ll be making a decent living, not as much as I would love for them to make…but better than they were,” she said. A living wage in the city is $12.75 an hour for a single person but balloons to $20 or more if a child enters the picture.
But the servers are also excited about the tipping changes. “To know at the end of the week this is what I’m going to make because I worked this many nights is a huge bonus. They never have to wonder.” She pointed out that with the snowy, cold winter New York City has experienced this year, servers might not have been able to count on customers coming out and giving them tips. That adds a layer of instability most workers don’t have to live with. A steady wage is “just like every other job,” she said. “Servers shouldn’t be treated any differently. It’s a job.”
It’s also better for her as a restaurant owner. “I fundamentally don’t agree with tipping, with the system that we’ve set up,” she said. “I’ve basically outsourced my human resources department to the customers. If you don’t think the server did a good job, you don’t have to pay them. It’s crazy.”
She said she hasn’t “had a single complaint” from customers about the tipping policy. “We’ve had a lot of questions, but nobody has refused to pay it,” she said.
The goal, however, is to get customers comfortable with something even more different: no tipping or fees, just higher prices that bake in the cost of paying workers a higher wage. Cohen has so far resisted that move because she’s worried larger prices might scare off some customers who don’t know that they won’t have to tip. “But hopefully within a year, we’ll just move into that system, and nobody will question it,” she said. And she pointed out that it’s more a matter of semantics than a substantial difference for the customer. “No matter where I incorporate it, you’re still paying the same amount of money,” she pointed out. There’s little difference for a customer’s wallet between a voluntary 20 percent tip, mandatory 20 percent fee, or paying prices that are 20 percent higher without an extra gratuity. “Ultimately we’re splitting hairs here, your bill is your bill, it’s the same bill no matter what.”
She also has plans to add benefits to the higher wage. “It’s still a restaurant, still very, very slim margins, and we’ve just opened, which means margins are nonexistent if not negative,” she said. “But once we sort of get up and running and things are little more stable, it’s definitely something we’re considering implementing.”
Cohen’s hunch that a higher wage will help her keep her best talent is something economists have proven in research. Higher wages help companies reduce turnover while also attracting better job candidates, enhancing customer service, and increasing employees’ productivity and performance. Much larger businesses like Walmart, Gap, and T.J. Maxx all recently raised their base wages based on these assumptions.
Cohen’s dislike for tipping is also a growing trend. She joins other high-end restaurants in her own city and elsewhere in doing away with them, but some lower-end places have also gotten in on the idea. A new restaurant in Philadelphia, which has a lower cost of living, has also decided to include a mandatory fee in lieu of tips while paying all employees $15 an hour.