Service charge

Walnut Creek Restaurant has a 20% service charge

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Restaurant owners may disagree on who makes the best steak frites or grilled octopus in the Bay Area, but they do agree on an industry-wide issue: the wage disparity , in which a typical server often makes double or triple as much money as a professional cook.

In April, a new federal law made it legal for restaurant owners to share servers’ tips with kitchen staff — as opposed to just front-desk employees — and that certainly helps. But Bay Area restaurants are still looking for other ways to address the disparity. Some eliminate tipping in favor of a service charge or increase prices overall.

At the bustling Main Street Kitchen & Bar in Walnut Creek, owners Lauren and Arash Ghasemi outlined their no-tipping policy after a renovation in July, in which they reopened to the public with a new gray interior, an open kitchen, double seats – and a 20 percent service charge on each bill.

“Our customers love it, we’re taking the strain off the front and back of the house and creating a fair and living wage for all of our employees,” says Lauren, who opened the farm-to-table restaurant with her husband and executive chef, Arash, in 2015. “We also take the worry away. You shouldn’t wonder if you’ll be able to pay your bills if your section wasn’t busy or if your guest didn’t leave a good tip.

In Oakland, Berkeley and San Francisco, restaurateurs have adopted new models to cope with the minimum wage hike that voters in those cities approved in 2015. Comal, the upscale Mexican restaurant north of downtown of Berkeley, implemented its 20% service fee in 2014, about a year before the minimum wage increase.

“Our staff are happy so we have fewer martyrs and more team players,” says owner Andrew Hoffman. “We get a few complaints every year from customers who philosophically think they should have a say in the pay of our employees, but we deal with them on a case-by-case basis.”

At Homestead, a sleek and casual neighborhood restaurant in North Oakland, owner Fred Sassen decided to “be as transparent as possible” about honoring the raise. Instead of adding a service charge, he simply increased his prices by 20% and said so directly on the menu.

“It worked like a charm and I wouldn’t go any other route,” Sassen says. “What we found was that if we included tipping in the price, then we could dictate how to pay everyone fairly and eliminate the inconsistency, which is at the customer’s discretion. Otherwise, the arts-certified pastry chef culinary skills and 10 years of experience will never earn as much as the artist serving the tables.

They’ve always had a service charge model at the Orchestria Palm Court restaurant, an upscale American restaurant that caters to theatergoers in downtown San Jose. Owner Mark Williams opened the restaurant five years ago after living in Europe, where virtually everyone does it that way, he says.

“‘Just give me the bill and I’ll pay it’ is the idea,” Williams says. Initially, Williams posted the new price directly on the menu, but too many customers complained. So he changed it to a simple line: “No tipping please.” Service added to registry.”

And what should a restaurant owner do when customers, including regulars, leave little or no tip? At Oyama Sushi in Walnut Creek, where a backlit wooden bar holds cold crates of fresh salmon, ahi tuna and octopus, owner Kit So has lost 10 servers to bad tips even after increasing their salaries.

“It’s very strange,” says So, who was the restaurant’s manager for four years before taking over in May. “I was a sushi server for more than seven years in Lafayette and my income was very good then. Even on weeknights, I made $80 a night in tips.

One of the reasons tips are down, So says, is an increase in orders through delivery apps like Door Dash and Grub Hub. “Some customers use the app to order and still pick it up, so they don’t have to pay a fee,” she says.

Taking a cue from DoorDash, which doesn’t let you check out without selecting a tip percentage, So now presents a laminated note to customers with their menu that explains how they’re helping staff offset the rising cost of living by adding 15 percent charge to bill for groups of one to four, and 18 percent for larger parties. The amount, he says, will be split between servers, chefs and kitchen staff. It started in November and the response has been good so far.

“No one is really against it,” she says. “Only two regulars, who came all the time and deposited 10%, saw him recently and decided to leave.”