Paul Fehribach, owner of Big Jones in Chicago’s Andersonville neighborhood, has wanted to eliminate tipping at his restaurant for years.
He didn’t like having the whims of customers determine how much his waitstaff got paid. Even when tips were generous, it felt wrong that the kitchen staff earned much less in comparison.
But relying on customer tips to subsidize servers’ wages underpins the restaurant business model in the U.S. and is embedded in the cultural fabric. Fehribach worried customers and employees would balk if his restaurant was among the first in Chicago to abandon that structure.
Then came the pandemic.
With restaurants forced to close their dining rooms, Fehribach had a clean slate. He started paying his tipped workers an hourly wage they could live on, and when dining returned last summer, the tipping system didn’t.
“It’s wrong, it’s always been wrong,” Fehribach said. “Our workers deserve the security of knowing what they are making when they come to work.”
Big Jones is among a handful of restaurants in Chicago moving away from the long-standing practice of paying some workers less than minimum wage if customer tips make up the difference.
The restaurants are raising prices, adding service charges to bills, or finding new sources of revenue so they can raise wages and become less dependent on tipping. It’s a risky move, both financially and culturally, but some restauranteurs say they are emboldened to try because of the disruption caused by the pandemic.
Their actions come as proposals to support restaurant workers by getting rid of the subminimum wage hit roadblocks. Although the federal minimum wage stands at $7.25 an hour, employers can pay tipped workers a subminimum wage of $2.13 an hour as long as their tips make up the difference. Democrats recently proposed raising the federal minimum wage to $15 an hour and phasing out the subminimum wage, but the Senate parliamentarian decided the proposal couldn’t be tacked onto a big COVID-19 relief bill, which will make it more difficult to pass a wage hike.
Chicago aldermen considered phasing out the city’s subminimum wage, currently $8.40 an hour for employers with more than 20 workers, as part of 2019 legislation that accelerated the timeline for reaching a $15 minimum wage in the city, which happens in July. That provision was removed under heavy lobbying from the restaurant industry, which said businesses couldn’t afford it and many servers would end up making less.