Thursday, August 18, 2022

Service surchages

With inflation hitting owner's budget waistlines, hard, it appears many restaurants and cafes are trying to find ways to make a buck / save a buck. Not surprisingly, it is on the backs of laborers, their front line staff.

In place of tipping, they have installed service surcharges to bring effective wages in line with expectations of workers. This is the new service charge economy. They do it saying that this provides a more steady source of income for their previously tipped (and sometimes untipped) workers, but in reality, it is just an angle to subsidize wages without paying more. To my mind, wages should be increased by the employer, and tips should be taken. Employers often do this because they fear raising prices, but that is what they effectively do via the surcharges, only under the guise that it is so the employees can make a more livable wage. With tips, our front line workers make approximately $21/hr currently, sometimes more depending on the day.

Another way owners pass off the labor costs is by paying low, sometimes as low as minimum wage, and "guaranteeing" a base wage paid via tips, again effectively shifting the labor cost to the consumer as in a traditional waiter/waitress model.

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