Chef Cara Stadler announced Tuesday that her restaurants in Portland and Brunswick will eliminate tipping as of Dec. 1.

Stadler, whose restaurants have earned her national honors, said that Bao Bao Dumpling House in Portland and Tao Yuan in Brunswick will shift to a service charge system that will automatically charge customers 18 percent of their pre-tax bill. The line for tips will be removed from the restaurants’ checks.

Both Stadler and Chris Peterman, director of operations for the restaurants, said they believe Bao Bao will be the first full-service restaurant in Portland to eliminate tipping, but they couldn’t say for sure.

The move by Stadler comes in advance of a Nov. 8 referendum to raise Maine’s minimum wage and a federal wage law that takes effect next year.

Employees working front-of-the-house tipped positions at Stadler’s restaurants currently earn the “tipped minimum wage,” which is $3.75 per hour, plus tips. Under the new system, servers will be paid hourly, based on experience. Starting pay will be $15-$16 an hour for servers, Peterman said, and $16 to $17 an hour for bartenders “because it requires a little more knowledge and experience.” Plus, bartenders serve drinks to the entire dining room. The starting pay for cooks will go from $12 to $13 an hour.

“I want to be clear that this is a starting point based on research that we’ve done,” Peterman said. “If we find we can pay more, we will.”

Peterman said there are no plans to increase menu prices.

He said they decided on an 18 percent surcharge because 15 percent “just wasn’t enough to cover the raises for everybody and we didn’t want to go to 20 percent because we didn’t want people to feel forced into 20 percent. It’s the industry standard, but it’s also the high end of the industry standard. We also didn’t want to raise the prices on the food.”

Customers are welcome to leave a tip on top of the surcharge, he said. Any “extra” money that comes in will go into a house fund and be distributed among the staff, Peterman said.

The restructuring will allow for pay increases for all kitchen employees and their management teams. Benefits such as health care, vacation time and parental leave also are part of the plan.

Previously, all employees were offered health care, with the restaurants paying 50 percent of the cost. Full time back-of-the-house workers, which includes cooks, earned paid vacation after one year on the job.

Under the new system, all employees will continue to be offered health insurance. Benefits such as paid vacation and parental leave will kick in after a year for full-time employees. Full time is defined as 35 hours a week.

Stadler also plans to offer other benefits, such as educational opportunities, bonuses and “extracurricular experiences” that could help employees who want to make restaurant work a career – activities such as learning to butcher animals, visiting wineries and breweries, and visiting farms. Those benefits will be available from day one, even to inexperienced cooks and servers who aren’t sure if they want to make it a career.

“At some point, the system has to change,” Stadler said. “I don’t want to put cooks through what I had to go through. I want to give them perks for the work that they do, and benefits for working hard.”

Stadler said she recently calculated how much she made as a line cook in France, and it was $4 an hour for 80 hours’ worth of work, with no overtime.

Stadler said she doesn’t want to pit front-of-house workers – servers and bartenders – against cooks and other back-of-house workers. But she added that while good, experienced servers deserve to be paid more, new servers need to learn the trade before they earn more.

“You shouldn’t be able to walk on the floor at $3.75 an hour in a fancy restaurant and deserve to make three times the amount a cook who has been working for two years has been making,” she said. “It’s just a totally nonsensical system.”

Stadler said she decided to launch her no-tipping policy Dec. 1 because of changes that are coming next year from the federal government that affect the general pay structure.

Employees were notified last month of the coming changes so they would have time to consider whether they want to remain in their jobs or move on by Dec. 1. The restaurants also need time to train the new employees who will replace those who decide to leave.

“All of the back of the house were super excited because they’re all getting raises,” Peterman said.

He said they expect to lose some people that they don’t want to lose, “but we feel this is the way of the future.”

The new system also will apply to Stadler’s new restaurant, Lio, expected to open in Portland next summer. Peterman is a partner in that project.

Jay Villani, who owns three restaurants in Portland, said his restaurant group has had internal discussions about implementing a no-tipping policy, but they haven’t come to a decision yet.

“We want to talk to our staff first about it before we make any decision like that,” he said, “and we want to wait and see the outcome of the election on the 8th.” He thinks other restaurateurs are playing the same waiting game.

Question 4 on the Nov. 8 ballot would raise the statewide minimum wage from $7.50 an hour to $9 in 2017, then by $1 each year until it hits $12 in 2020, after which it would be indexed to inflation. The minimum wage for tipped workers also would increase gradually, until it reaches $12 in 2024.

“There’s definitely going to be a culture shift in the dining scene, and that makes me a little nervous,” Villani said. “What we’re doing here foodwise has brought a lot of prominence to Portland and Maine, and to really rock that boat is a scary thing.”

He said if Question 4 passes, more restaurants are likely to switch to a no-tip system because it will be easier to handle.

“I’m able to spread that out across all the employees as opposed to just the tipped servers,” he said. “But you’re going to have to find those servers who are content making $15 to $17 an hour.”

Working as a server, even part-time, can be lucrative with good tips, allowing servers the creative freedom to do other things when they aren’t waiting on tables. But Stadler says her system will reward the people who want to make restaurant work a career, and they are likely to stick around longer.

“I don’t want an establishment where people just check in and check out,” she said. “I want people to know that we care about them and we want them to grow.”

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