One Year Later, JP Restaurateurs Reflect on Hospitality Fee

Last December, Jamaica Plain restaurants Tres Gatos and Centre Street Cafe added a 3 percent “hospitality administrative fee” to diners’ checks, which would be used to fund raises, benefits and more sustainable work hours for the restaurants’ back-of-house kitchen staff. When sister restaurant Casa Verde opened this May, it adopted the rule as well.

The restaurateurs’ decision touched off a great deal of discussion online (including on Jamaica Plain News) and in their restaurants. In particular, they told the community they hoped their experiment would “serve as a test model from which other small restaurants can gain valuable insight.”

So, one year after implementing the fee, what have the restaurants’ owners observed? They shared the following observations with Jamaica Plain News:

  • The average wage for kitchen hourly workers has increased $2.87 per hour (varying by restaurant and by month).
  • The back-of-house salaried workers are, on average, making approximately $5,948 more per year than before the fee was implemented.
  • Hospitality administrative fees have increased gross kitchen wages by $100,700.

    Despite initial concerns about reducing front-of-house tips, servers actually saw their tips increase by 2.5 percent.

  • There is now a direct correlation between restaurant volume/revenue/success and the compensation of all workers, according to the owners, as well as an investment, motivation and incentive to improve every aspect of operations by all. Team engagement has improved significantly, they add.
  • The three restaurants have served approximately 85,000 guests since Dec. 1, 2015, and have received approximately 12 to 15 negative comments, none of them severe. Since inception, no guests have refused to pay the fee. (Because the fee is prominently displayed on the menus and websites, it is legally enforceable.)
  • Implementing the fee actually costs the restaurants money, because payroll FICA taxes are required on the additional wages paid. According to the owners, ancillary, positive gains offset the cost.
  • The owners say the positive impact of the fee has led to excellent staff retention and has improved recruitment dramatically. There has been slight, although not dramatic, improvement in more sustainable back-of-house scheduling (total, individual hours worked).

“This was scary, but it is the best business decision we’ve ever made,” said co-owner Keith Harmon. “The goal was to do our homework and implement the best plan we could. We’re overwhelmed with gratitude to our staff, our guests, community, industry peers, and everyone who has supported us. Ninety percent of our hopes were met. This is only a start. We’re resolute about continuing to improve, paying close attention to the ethics, culture and social justice aspects of our mission, while simultaneously operating a financially viable business.”

The owners also wondered how their waitstaff might respond to the fee.

“Despite initial concerns about how front-of-house staff might be affected by the fee, we quickly discovered that their tips were not adversely affected, and to their credit, they quickly embraced the hospitality administrative fee as a gesture of respect to their back-of-house co-workers,” said co-owner David Doyle.

The experience of responding to questions from guests about the fee has resulted in the restaurants’ teams being more aware of how hard the back-of-house teams work, for relatively modest pay, Doyle said.

As far as restaurants’ diners were concerned, particularly their regulars, “we have been warmed and gratified by the level of support they’ve shown us for this modest attempt to narrow the wage gap,” Doyle said. “JP is, in general, a neighborhood that prides itself on being progressive, supporting indie business [and] taking care of each other. We felt that if any neighborhood in the city (or country) would support our effort, JP would. Our faith in the neighborhood has been confirmed.”

  • StephanQ

    The only problem with the ‘facts’ and figures layed out here is that all of this info comes from the greedy owners with no outside, disinterested, parties to substantiate their questionable claims. What a shocker—people are payed more money AND THEIR SALARIES INCREASE? And they’re HAPPIER? If these people genuinely valued their back of house employees then they would pay them a living wage in the first place, but they do not, and that is by design. Paying a living wage will cut into the money the owners are busy stuffing into their own fat pockets.
    Yes, they’re very generous — with other people’s money. I’m not sure why that should be applauded.
    And Doyle, please spare us the usual whining about low profit margins. You have three restaurants. You’re in business to make money. Your investors invest to make money. No one is doing this out of the goodness of their hearts.
    You don’t hear poor people bemoaning that they’re poor. It’s only those that have who are fond of complaining to anyone who’ll listen how destitute they are.

    • Marty

      Couldn’t have said it better myself. I, for one, don’t go to those restaurants after the owners’ self-serving comments in this forum last year.

      • BettyV

        In my opinion the owners of those 3 crappy restaurants are liars. And I don’t know anyone who is happy to be strong-armed into overpaying for mediocre at best “food”.

        • kinopio

          Why did you put food in quotation marks? They aren’t serving imaginary meals like that scene in Hook…
          Where in JP can you get better tapas and cocktails than Tres Gatos? Where in JP can you get better mexican food and craft beer than Casa Verde? The restaurants are popular and the staff is making more money for their hard work. How can you honestly complain about this?

          • BettyV

            Since the owner won’t answer the question, I’ll put it to you. If his staff is so darn valuable to him, and he cares SO MUCH about them, why doesn’t he think they’re worth being payed a living wage? The reason? Because all his rhetoric about caring about the staff is a big fat lie. He won’t pay his help a living wage because he thinks they do not deserve one. If he thought they deserved one then he wouldn’t be strong-arming/shaming the dopes who eat there to pony up the extra cash he should be paying, if his B.S. claims were sincere. I think it’s fine if customers want to pay extra, but Doyle, I think you should start being honest. You don’t think certain people deserve to be paid a living wage, Doyle.

          • David Doyle

            Well, I haven’t responded to these angry, misinformed comments until now because I just became aware of them. You either believe our statements about narrow profit margins or you don’t. I’d love to be able to just “pay them more” rather than rely on an admin fee (which, by the way, has actually helped close the gap; ask any of our BOH employees), but we simply don’t have extra cash on hand to do that. If you need to think of a progressive idea, which is being considered by more and more restaurant owners, as “strong-arming” and “shaming” our guests, then I can’t help you. I’m pretty sure our guests don’t feel that way or they wouldn’t support us. DD

        • David Doyle

          You obviously feel a lot of anger toward me, and don’t like our restaurants, and there isn’t much I can do about that. But calling me a liar is just offensive. I invite you to ask any of my team members about whether I’m a liar and I’m pretty sure they’ll set you straight. Happy new year. DD

          • BettyV

            Sweetheart, learn to read. I did not call you a liar. I said I think you’re a liar. There’s a huge difference. And by the way, I notice you don’t deny lying.

    • David Doyle

      If you want to construe our sharing restaurant reality with the public as “whining,” go right ahead. Your fantastical idea of our stuffing money into our “fat pockets” rather than paying our team a living wage is offensive and ridiculously off target. As I suggested to BettyV (see rant below), why don’t you take a minute and ask my team members what they think about me and my partners?

    • How is the fee “other people’s money?” It’s part of the pricing, and I am pretty sure that when you sit down in a restaurant, you’re aware that the stuff you order has a price.

  • Wow, just seeing this now and I am totally shocked and appalled at what my neighbors are saying to one of our community’s most responsible and best business teams. I can only imagine that these angry comments are coming from people who lack appreciation of the decades of investment that David and his partners have made in this community. These investments include good, sustainable, humane jobs in the neighborhood as well as the creation of great, creative gathering spaces – not to mention excellent food. I am sorry that the Rhythm and Muse, Tres Gatos, Centre St. Cafe and Casa Verde teams have to read this vitriol, but I am glad for opportunity to show support while enjoying my next great meal at any one of those places.

    • David Doyle

      Thanks for your kind words, Liz; I’m only reading this today so obviously I’m a little behind. For the most part, we’ve decided — partly to keep our sanity in these crazy times, and partly because it’s pointless — not to respond to or engage with slander, vitriol, and the like. We appreciate your support! David

  • Marty

    Liz I’m shocked and surprised that you are defending the kind of twisting of the truth that seems to be the norm in these times. The bottom line for many of us in this forum is that the owners of these restaurants have declared that the reason they are tacking on a 3% for the back of the house is because they themselves can’t pay it. Yet, they keep opening new restaurants. It just doesn’t add up.

    • BettyV

      It’s hilarious that these restaurant barons keep talking about this mysterious “gap” in salaries, as if it’s something they have no control over rather than something that they intentionally DESIGNED & CREATED. Notice there’s NO GAP in David Doyle’s paycheck. NO GAP in the $$$$ they fork over to “investors”. NO GAP when it’s time to open a forth (fifth?, sixth?, TENTH!) establishment. It’s the only place I’ve heard of where they pick your pocket when you walk through the door, brag about it, and then want the whole world to pat them on the back. Well, there’s one born every minute.

      • Ramblin’ Evil Mushroom

        You two are unhinged. Please stop commenting in threads about these restaurants. It’s clear that you have some sort of personal gripe with the owners, who have been much more cordial to you than you deserve. If you don’t like it, don’t eat there. The rest of us appreciate the extra seats–it’s tough to get a table at peak hours.

        • Marty

          Mr. Mushroom – if you scroll down you will see that I don’t eat in those restaurants. I don’t have any personal gripe against the owners but I am alarmed in general at dishonesty from business people who burnish their practices with untruths. That’s how we ended up with a Cheetoo for president.

        • BettyV

          Mushroom…Why do you resort to the name calling? So far the restauranteur has not explained why he refuses to pay his “deserving & loyal” employees a living wage. He makes lame excuses (the laughable ‘wage gap’ and ‘industry standards’) which come off as feeble at best, and lies, at worst.
          The bottom line is, he cries poverty while pocketing the cash he should be paying his employees. In the meantime, misinformed do-gooder suckers (like you) pony up the extra cash. I wouldn’t be surprised if he laughs all the way to the bank.

          • Keith Harmon

            Betty, you’re the one doing the name calling. Mr. Mushroom was using an adjective. We’ve explained many, many times here and other places. Neither David and I are the best paid people on our teams. Your personal agenda is transparent, and the more you comment the less you hurt us, which is your obvious intention. You’re welcome for dinner anytime. -We live to serve, Keith Harmon

  • Jon

    Wow, catching up on this thread just now and since people seemed to delight in trashing the ownership team I thought I weigh in with kudos for the success of the idea and the spirit behind it. I remember being confused about the idea when it came out, and very defensive of the idea of front of the house being hurt, but I realized that essentially they raised their restaurant prices to cover higher wages for BOH staff, but did it in a form that was a public commitment (on their menus no less!) to put that increased income directly towards BOH salaries.

    I’m struggling to find any “twisting of the truth” or ill intent here. Quite the opposite. It does “Add up”. The math of the restaurant industry is remorseless, especially with limited tables. Expansion can fuel greater profits, sure, but is usually channelled first into being able to hire on and keep people (yes–including the owners and investors) at a sustainable level and give them places to go professionally.