Three D.C. Restaurants Explain Why They’re Eliminating Tipping

As the novel coronavirus alters the ways Washingtonians order and receive food from restaurants, customers at a growing number of businesses across town are seeing new service charges tacked onto their checks before they can decide how large of a tip to leave. Pan-Latin dishes from Seven Reasons, Burmese meal kits from Thamee, and Spanish small plates from Anxo Cidery were among the first purchases in town to carry these surcharges.

The owners, managers, and employees at these eating and drinking establishments say that now, more than ever, they find themselves asking why someone’s income should depend on the generosity of others rather than the nature of their work. While the novel coronavirus continues to expose pre-existing inequities in society, D.C. restaurants are joining a controversial movement to supplement wages while avoiding tipping, a practice that encourages racism, sexism, harassment, and exploitation.

Seven Reasons, which has earned national recognition in its first year of business, announced a three-step initiative in July to give its employees financial security and better leadership training. The 14th Street NW restaurant aggressively worked to bring back employees early in the pandemic. A staff of 45 had shrunk to five employees shortly after the city ordered a dine-in ban in mid-March. By the end of that month the restaurant announced that demand for delivery and pickups was strong enough for it to employ 18 people. In August, 36 workers were back on payroll. At Seven Reasons, those positions were crucial for several workers who are asylum seekers from Venezuela and have little to no access to benefits because of their immigration status, managing partner Ezequiel Vázquez-Ger says.

“All of that started making us think [about] what we can do to start making changes; not only circumstantial changes but changes that are more stable in time,” Vázquez-Ger says.

Seven Reasons [official]

The first change was to abolish the tipping system and introduce a mandatory 22 percent service fee for dine-in customers (20 percent for takeout). Vázquez-Ger says the changes have allowed the restaurant to offer competitive salaries to its staff.

“[A server] is a professional and is selling our products every day. … It’s not only about raising the rate and making it financially possible to do it, but putting all of this in a context where we treat people like professionals and give every professional an opportunity to grow,” Vázquez-Ger says.

The hourly salary for all employees at Seven Reasons starts at $17 and can go up to more than $35, based on experience and performance. The restaurant also operates a “bonus program” for employees based out of a revenue-sharing model. Workers divvy up 10 percent of the restaurant’s profits determined by a series of performance metrics like hours worked, time spent with the company, peer reviews, and sales targets. Vázquez-Ger wants to get Seven Reasons to the point where all his employees earn at least $60,000 per year.

“Not being able to do that, at the end of the day, is saying that they’re not professionals, which is not true,” he says.

Vázquez-Ger says the restaurant is also launching a career development program that will bring speakers to deliver lectures and teach classes on topics like personal finance, current affairs, leadership, and, of course, food and beverage.

Rafael Dolande, a server at Seven Reasons, says the changes make him and his fellow servers feel more secure.

“Even when the restaurant is slow, you can make good money now,” he says.

Dolande’s goal is to one day become general manager of the restaurant. He feels his employer is nurturing his career.

“We have the chance to get better; we can work to be a manager,” Dolande says. “They’re giving us the opportunity, they’re open to everything. And that’s what I love to work for.”

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In Bloomingdale, Anxo Cidery is also moving away from a traditional tipping model and reevaluating how it compensates servers. The business, which doubles as a taproom for its line of ciders and a dining venue for Spanish pintxos, has implemented a 22 percent service charge for on-site dining and 10 percent for takeout orders. Anxo employees now start at $18 an hour with opportunities for merit-based raises.

Co-founder Rachel Fitz says fixing the pay disparity between front-of-house and back-of-house employees has long been on her mind. While dishwashers and cooks have made between $14 and $20 an hour, servers have regularly raked in over $30 an hour, including tips and their hourly wage.

“They can’t do that without working off of the backs of people making minimum wage. And that is a system we’ve decided is just not the right fit for Anxo,” Fitz says.

Besides creating a pay disparity between restaurant workers, tipping does not guarantee a stable income for the servers it benefits, she says.

“What [diners] forget about is the Monday nights or the Wednesday before Thanksgiving, or the day that it downpours all day and people decide not to go out,” Fitz says. “There’s a lot of inconsistency with the tip system and how much money you make. It’s easy to remember those great shifts, but those aren’t every single shift.”

Fitz says the disruption the pandemic brought to the industry forced Anxo to look inward and “work harder to actually walk the walk” when it comes to running a fair operation.

“It’s very rare that you get this kind of reset,” she says.

While some restaurant owners and workers are endorsing these changes, the larger concept of abolishing tipping has long been a point of contention in D.C. In 2018, the District was divided over Initiative 77 — a ballot measure that would have gradually raised the minimum wage for all workers to $15 per hour by 2025. Although supported by Restaurant Opportunities Center United, the initiative was widely opposed by restaurateurs worried about escalating costs that would keep them from running viable businesses. Even celebrity chef José Andrés, widely celebrated for his humanitarian efforts, asked voters to shut it down. Other entrepreneurs threatened to move their restaurants out of D.C. entirely. Ultimately, the D.C. Council exercised its power to repeal the measure, going against the will of the voters.

As of July 2020, the minimum wage for tipped workers in the District is $5 an hour. If average weekly earnings don’t add up to $15 per hour with tips, employers are supposed to make up the difference.

Restaurant Association of Metropolitan Washington (RAMW), the association that represents the interests of member restaurants in the D.C. region, opposed Initiative 77 ahead of the vote. CEO Kathy Hollinger says that stance reflected the feeling of the restaurant community, but times are changing.

“Everything has been turned upside down,” Hollinger says. “Everything needs to be reconsidered, reimagined, and rethought in terms of what’s going to work for the owner-operator and what’s going to work for the employee.”

When asked whether RAMW would push to abolish tipping and implement mandatory service fees, Hollinger stressed the importance of autonomy for restaurant owners. “The choices on how to operate should remain with them and never [be] mandated or imposed, particularly at this fragile time.”

Rey Lopez/Eater D.C.

Simone Jacobson, co-owner of Burmese hit Thamee on H Street NE, disagrees. She believes governing entities should set policy that mends a broken system.

Thamee recently implemented a 30 percent service fee to supplement health coverage and professional development for staff, posting a “Flat30 manifesto” on Thamee’s website to explain the move. Jacobson says customers have received the charge well, with some exceptions. She believes the positive response is partly due to the fact that Thamee is the only full-service Burmese restaurant in the city, which eliminates niche competition and allows it to build a supportive base of regulars.

Part of the 30 percent charge goes to hazard pay for staff members who are distributing takeout and pantry items during a public health crisis.

“We’re in a position right now where we need guaranteed support from our communities,” Jacobson says. “We’re not getting enough from our government … this is not a temporary crisis. You’re asking people to literally put their lives at risk.”

Jacobson is also in favor of making the emergency payment model permanent, forcing her customers to reevaluate the worth of the service they receive.

“I think if you ask most people if restaurant workers should have access to health care and a livable wage, they would say, ‘Yes,’” she says. “But, then the question is, ‘Are you willing to pay more for food and drink?’”

“We can’t do it alone,” she adds. “If you want to dine with us, then you have to support our efforts to do these things right.”

The pandemic has exposed huge vulnerabilities within the restaurant industry. While many diners are faced with decisions about which restaurant to support through takeout and delivery, restaurant workers face evictions, lack of health care, and limited or nonexistent access to child care.

“I’m tired of hearing that narrative that restaurants have razor-thin margins. [It’s because] people have a certain perception and we’re scared to challenge that perception,” Jacobson says. “I would like to see us be different, more sustainable. I mean, look, the biggest restaurant chains and groups in the country couldn’t survive two weeks post-closure. What does that tell you about the restaurant industry as a whole?”

• D.C. Council Repeals Initiative 77, Blocking Hikes in Minimum Wage for Tipped Workers [EDC]
• D.C.’s Minimum Wage Battle: A Primer [EDC]
• Opening a Burmese Restaurant Was an Uphill Battle. Will America Remember Us When We Reopen? [EDC]
• The Case Against Tipping in America [E]