One Year Later, JP Restaurateurs Reflect on Hospitality Fee

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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."