In this Toronto restaurant owner’s decision to get rid of tips

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Restaurants around the world are changing their business models to stay afloat in the pandemic – turning to things like offering take-out, selling meal and grocery kits, and creating patios. of Fortune. At a time when restaurants continue to do a fraction of what they used to do and some even face permanent closure, Chef Carl Heinrich made a big change and got rid of tips last weekend in his downtown Toronto restaurant, Richmond Station.

He said he made the decision to give employees a more stable income and to provide better employment insurance.

“As a system and culture, when you look at things on a global scale, tips are neither normal nor expected in many parts of the world,” said Heinrich, who opened his restaurant seven years ago after won the second season of “Top Chef Canada. “They don’t pay their staff less because they expect customers to pay their wages, which we have here. We have a system that looks normal, but just because we’ve standardized it doesn’t mean it’s okay. “

He explains that while many restaurant workers rely on tips to supplement their income, tips are rarely reported during tax season in an effort to pay less taxes. But when a restaurant worker applies for unemployment and receives EI, he ends up receiving much less than he qualifies for because he did not report income from tips. He said that putting all of an employee’s earnings on a paycheck ensures that he gets the full 55%. 100 of his income pays EI.

Heinrich said he and the management team had sought to eliminate tips since 2016, first to end the disparity between what waiters and cooks were making, as the waiters would be the ones receiving tips from client. Instead, they changed the way tips were distributed, rather than abolishing tips.

“There is a significant cost to businesses (when you eliminate tips) because you have to pay more taxes. But four years later, and I regret not having done it at the time, because more of their money would have been insured and they would have recovered it when they received their benefits, ”he said. he declares. “We were trying to right the wrongs at the time and we should have gone all the way.”

The concept of tip abolition is not new, as a few restaurants in Canada and the United States have tried it with varying success. In Toronto, Indian Street Food Co. and Sidecar weren’t very lucky. Meanwhile, Todd Perrin, chef at Mallard Cottage in Newfoundland, announced earlier this month that he was cutting tips to ensure a more consistent salary for staff.

New York restaurant Danny Meyer announced that his restaurant would accept tips again after ending the practice in 2015, telling the New York Times in an interview that he did not want to deny staff the opportunity to get tips. extra money from customers in the midst of a pandemic. Yet Amanda Cohen, another New York-based restaurateur at Dirt Candy, continues to advocate for board abolition to be adopted on a broader level.

A spokesperson for the province’s Ministry of Labor told The Star that there are no plans to eliminate tips in Ontario.

Critics of tipping say the practice is discriminatory and puts the burden of paying staff on diners rather than employers. The practice of tipping spread to North America after the Civil War, when restaurateurs did not want to pay black workers and instead asked customers to tip them. Numerous articles have been published that this practice is racist and sexist because in the United States, black and Latin American workers tend to receive fewer tips and men who use tips as leverage to harass waiters. female. Customers also tend to tip differently depending on the restaurant: someone who works in the food industry is likely to receive a higher tip percentage than someone who works in a restaurant.

Heinrich says his restaurant customers average 18 percent, so on average menu prices have been increased by that much to compensate for the lack of tips. “This extra income goes directly to work. We are not winning financially because of it, ”he said. So far, he added, diners have not complained and the staff are on board.

“I would love to see more companies take this approach because I don’t know of any other industry that depends on customers to pay staff income,” said Heinrich. “A lot of people want to see this change and don’t know how or when to do it, but we need to make sure our employees are taken care of because we don’t know when the pandemic is going to end.”

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Karon Liu is a Toronto-based cultural journalist for The Star. Follow him on Twitter: @karonliu



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