Late last year, the Ontario government passed Bill 12, An Act to Amend the Employment Standards Act, 2000 (with respect to Tips and Other Gratuities). The bill becomes law this month, prohibiting employers from withholding, making deductions from, or collecting tips or other gratuities from employees unless authorized under the Employment Standards Act, 2000.
The new legislation provides protection for tips employees receive. Ironically, the notion of tipping is currently undergoing a radical transformation, fuelling one of the industry’s most important conversations.
So why is a model that has endured for years now under such scrutiny? First off, recent increases to the minimum wage, in both the U.S. and Canada, and higher costs in general, are forcing operators to take a hard, long look at how they run their businesses. In theory, many operators understand the importance of paying staff living wages, but the reality is they know these increases place untold pressure on their ability to turn a profit. Secondly, there is now greater awareness among operators that the tipping model is inequitable, rewarding front-of-the-house personnel at the expense of the back of the house.
For Canadian-born Amanda Cohen, owner and chef of New York’s Dirt Candy, the decision to eliminate tipping in January 2015 was made to guarantee survival in the competitive New York market. “The only way to get [staff] into my kitchen was to pay them more,” she told elle.com. To do this, she launched a 20-per-cent administrative fee, added it automatically to every guest check, and then divided it among servers and cooks. But the move didn’t elicit the positive feedback she had hoped. “People were very critical,” she says. Still, she didn’t back down, and customers eventually came around.
Since then, the no-tipping movement has gained a strong following across the U.S. Operators such as Danny Meyer of New York City’s Union Square Hospitality, Thomas Keller of The French Laundry in Yountville, California and David Chang all support no-tipping.
Clearly, the movement is gaining momentum, at the same time as the topic of fair wages gains traction. At last month’s Gold Awards, held at Toronto’s Four Seasons, Grant van Gameren, chef of Bar Isabel and Bar Raval, and winner of the Chef of the Year category, chose to use his acceptance speech to warn attendees that paying staff more means we all need to be prepared to pay higher prices for our food. He implored executives in the audience to “talk about the state of pay for chefs, cooks and dishwashers. Remember, there’s a lot of people sweating, working long hours and not being able to enjoy life as much as other people. They deserve to be paid more,” he said.
Will the no-tipping movement continue to grow or will it fizzle? And, will Canadian operators follow suit? Time will tell. At the moment, it’s unclear whether customers would accept paying higher costs for their meals to subsidize the elimination of tips. But, given that in Europe service compris has been the norm for years without customer resistance, chances are the tipping model will eventually give way to a new reality. After all, we live at a time when disruption is de rigueur, and where the rules of the game — and sometimes even the game itself — are changing daily.