When Andy Ricker's Pok Pok LA opens next week in Chinatown, it will operate a bit differently than other local restaurants in two distinct ways. First: Reservations, as Eater LA has reported, will only be taken via the Tock ticketing system; guests will reserve seats by placing a $20 non-refundable down payment on the cost of dinner. Second: the restaurant will employ a gratuity model that combines traditional tipping with a 5 percent service charge so that Ricker can more fairly compensate his entire staff, including cooks and other back of the house staffers who often make less than waiters.
A 5 percent service charge to compensate his entire staff
Ricker wrote in an email late last month that he hopes the hybrid model (the service charge portion of which a receptionist at Pok Pok confirmed today), will "solve a few problems for the next few years." Briefly: California doesn't have a tip credit, which means waiters must be paid the full state minimum before gratuities, a reality that exacerbates the traditional income divide between the front of the house and back of the house. Los Angeles waiters, according to a Payscale survey*, make approximately $16.20/hour, with bartenders earning $20.20/hour. Cooks, by contrast, make $13.30/hour on average. Adding to that disparity is the fact that the city's minimum wage will rise to $15 by 2019, starting with an initial increase to $10.50 next July.
Simply charging higher menu prices can exacerbate the FOH-BOH wage gap
Some restaurants will deal with the increased cost of doing business by raising prices, but because waiters are tipped on the bottom line, simply charging higher menu prices can exacerbate the FOH-BOH wage gap. So by employing a service charge, Ricker will have more freedom to better compensate cooks, dishwashers, and other staffers who can't legally partake of the tip pool. Many high-end San Francisco restaurants, facing a $15 minimum wage, have also switched to a service charge system, most of them levying a 20 percent fee on the guest check.
Ricker does not plan to levy a service charge at either of his two New York locations. "Long term though, I agree that service charge or full European model are inevitable unless someone comes up with some heretofore unknown way of doing business," Ricker adds. The full European model he's referring is the service-included system wherein a restaurant eliminates the need to tip by raising prices. Per Se famously did as much in New York in 2005, and Danny Meyer announced he would transition all of his Big Apple restaurant to service-included by the end of 2016.
The hybrid model is somewhat less common and it prompts the question: With a 3-5 percent service charge, could (or should) patrons reduce tips to 15 percent?
*Note: Payscale's survey was conducted between January 1, 2013 to January 1, 2015.