If you know somebody that works in the service industry, you already realize that it can be difficult. Very few people appreciate what you do and even if they do appreciate it, the tips are not often enough to make ends meet.
At the same time, most restaurants will only pay the absolute minimum, which is often less than minimum wage, to their employees. They depend upon other people tipping in order to make up the difference.
There is a restaurant in San Francisco, however, that is turning this on its head. They decided to move things in a different direction by helping out the hard-working employees with full benefits and some profit sharing.
If that wasn’t enough, Zazie decided that they would not allow any tipping at the restaurant as well. It’s their policy, but none of the employees are complaining.
According to the SF Eater, Zazie decided to go with a tip-free policy in 2015 when Jennifer Piallat was in charge of things. In order to ensure that they could pay the servers and others at the restaurant, they did raise the prices by 20%.
As you can expect, many of the customers balked at the higher prices but it wasn’t long before they were getting used to it. One customer even referred to it as being “sticker shock” but she still said that the prices were reasonable.
Aside from the fact that many of the customers are now on board with the changes, it was really the employees that benefited the most. In order to accommodate those employees and to ensure that they had what they needed, they were given a raise so that they were earning between $15 and $20 per hour.
The servers got a raise between 3% and 7% but those who were working behind the scenes got a 35% increase in their salary. These days, the people who work at Zazies are making between $30 and $65 per hour. If that isn’t enough, 25% of every item on the menu is taken and given as a revenue share to the staff.
According to the SF Eater, Piallat said: “Our staff are treated like adults, with ‘real jobs. Our labor costs are much higher than most restaurants, but our food cost/loss is much lower, so our profits end up higher. More mature, long-term staff waste less food, make less mistakes, are less likely to steal, and can handle bigger sections. Taking tips out of the equation was also a huge benefit, equalizing the front-of-house and back-of-house pay and turning the tables on an industry where the guest pays the server instead of the restaurant paying the server.”
The benefits that the employees receive are much more than just profit sharing and an increase in their base pay. They also receive many other benefits, including 401(k) with a 4% employer match, paternity leave, dental insurance, and paid sick leave. They even get vacation benefits!
In January 2020, Zazie changed hands. It was sold to three of the employees who have plenty of restaurant experience. The former owner stayed on as a 25% owner, but the other three employees got 25% each as well.
Piallat couldn’t be happier. She said that she couldn’t have imagined building such a community over 17 years and then turning around to treat the employees like “disposable idiots.” She does admit that there was one difficulty, and that was deciding who she would sell it to.
The new owners are continuing with the “no tipping” model and moving into the future with it. It seems as if they are also coming out cleanly from the pandemic, as they are more popular than they have ever been.