Leaving a crisp bill on the table after dinner could become a way of the past if a new Calgary restaurant has its way – the newly-opened Earls.67 has ditched tipping in favour of a 16 per cent “hospitality charge.”
“On a personal level, I do feel like a model akin to this is where the industry is going to go and probably needs to go if it is going to survive,” said Jeffrey Sheppard, general manager at Mr. Mikes Steakhouse Casual in Airdrie.
“If we need to charge people so we can afford to pay our staff so they can go home to a family and a house, then that’s what we have to do. I think we’re still years away from that, but I think it’s probably the future of this industry.”
Sheppard is one of many local restaurateurs eyeing the experiment being conducted in Calgary with great interest.
The new Earls restaurant, located on Stephen Avenue in Calgary, will include the additional charge with no option for a gratuity. The charge is being implemented as a “prototype” for six months, according to Cate Simpson, communications manager with Earls.
“That location pays the staff a guaranteed living wage in that their hourly wage is higher than a standard hospitality worker,” Simpson said in an email to the Airdrie City View. “What that does is even out the wages rather than just servers getting the majority of it because Earls.67 feels that everyone, from the cooks to the hostesses, are part of your experience.”
The concept of a “tip-out” is nothing new to those working in the restaurant industry – wherein servers share a portion of their tips with kitchen and hosting staff. However, according to Simpson, the hospitality charge eliminates uncertainties in pay that could arise if a restaurant has a slow day.
Rebecca Gorbahn, general manager of Original Joe’s in Airdrie, said a hospitality charge could help restaurants weather the economic realities of a slowdown in the economy and a looming increase to the minimum wage.
“Restaurants will have to decide one of two things – do we raise the price of our product that we sell and risk losing our customers, or do we start charging a service charge?” she said. “A lot of restaurants aren’t making a lot of money as it is.”
Sheppard said under his restaurant’s current model, servers receive whatever gratuity guests decide to leave. However, he said the model being implemented by Earls could help those who decide to pursue serving as a career.
“Everything I have heard from both guests and people working in the industry, mostly mom and pop shops doing it right now, they’re calling it a real win,” he said. “There are lots of people who choose to make serving or bartending a career. They do enjoy the work.
“That could be a real life-changer for some people.”
Mark von Schellwitz, a vice president with Restaurants Canada, acknowledged that some patrons might be irritated with being forced to pay a fee that once was reserved for recognizing exceptional service.
“There may be some pushback from customers who wanted to control the amount of gratuity that they leave, and pushback from servers who feel they could make more under the old system,” he said.
“But other than that, I think Earls deserves credit for showing some innovation. Our industry encourages innovation and encouragement.”
