Equitable Restaurants: The Benefits of Service Fees and Tip Pooling

We are relieved and encouraged by the recent passage of SB 478, which allows restaurants to retain service surcharges. This legislation represents a significant advancement for the industry, fostering greater transparency and financial stability.

While opinions on SB 478 may vary, we have found that inclusive pricing through service fees and the SF Ordinance surcharge has been instrumental in creating an equitable and empowering working environment for our dedicated team.

At Cassava, we have always championed fair pay practices. This new law enables us to continue offering higher hourly wages and fully covered healthcare for our staff. By embracing these surcharges, we ensure fair compensation across our team, reflecting the true value of every role within our restaurant.

Transparency with our guests about these fees reinforces trust and underscores our commitment to fairness. We believe this legislation will inspire others in the restaurant community to adopt similar practices, ultimately raising industry standards and benefiting everyone involved.

Kris and I have been outspoken critics of the pay disparity between the front and back of the house in American restaurants since at least 2007. Kris experienced years of resentment while working "in the back," facing classism often intertwined with racism. His brief staging in Tokyo in 2010 was eye-opening, as he witnessed a harmonious relationship between "cooks and servers" that starkly contrasted with his experiences in the U.S.

In contrast, my career in the restaurant industry has been spent "in the front," where I have unfairly benefited from the existing pay structures. As someone who has lived in both Japan and the U.S., I've always questioned why those who contribute significantly to a restaurant's success, such as cooking the food, aren't compensated equally.

Therefore, it was a natural decision for us to adopt a system of equitable pay when we opened Cassava, ensuring that everyone is paid fairly based on their contribution and skill level. For over 12 years, we have pooled tips and divided them by the total hours worked by all staff during a pay period to determine the hourly tip rate. This rate is then multiplied by the hours worked by each staff member. Currently, all our staff receive a base pay of $20/hr plus an average of $14–18/hr in service fees.

How We Split the Service Fees Among Our Staff

We operate as a small restaurant with only 15 staff members, including the two of us as owner-operators. This means the tip pool is shared among 13 people. According to California's Labor Code Section 351, “every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.” This allows for involuntary tip pooling, provided that the policy does not compensate owners, managers, or supervisors, and remains fair and reasonable.

The beauty of this system lies in its ability to equalize the value of every task performed within the restaurant. It acknowledges that every role, whether front or back of house, is crucial to the overall success. During slower shifts, when service fees are naturally lower, the team focuses on preparing for busier periods. This ensures that everyone remains engaged and contributes meaningfully, regardless of the immediate pace of service.

By adopting this approach, we foster a sense of unity and shared purpose among our staff, reinforcing the idea that every contribution, no matter how small it may seem at the moment, is essential to the seamless operation and ultimate success of Cassava.

This system not only promotes fairness but also enhances morale, as each team member knows their efforts are equally valued and rewarded.