When Hosea Rosenberg opened the farm-to-table concept Blackbelly on Arapahoe Avenue in 2014, a few years off of his Top Chef Season 5 win, he and his team talked long and hard about bringing the kitchen staff into the front-of-house tip pool.
But it seemed risky at the time. Because servers get tips, restaurants typically pay them a lower hourly rate than cooks and food prep workers in the kitchen. Rosenberg nixed the proposal fearing that Blackbelly wouldn’t attract quality servers if, with their tips pooled and split among everyone, they made less than before.
But when Rosenberg lost much of his staff at the start of the pandemic, he saw an opportunity to rethink his decision – and try to create a more equitable system that might help some of his lower-paid employees sustain a life in Boulder amid the notoriously high cost of housing.
In order for the system to work, his restaurant would need to break from the standard voluntary tipping model that’s become commonplace in the U.S. over decades of dining out.
Following the lead of restaurants in large coastal urban centers like New York City and San Francisco, Rosenberg instituted a “fair wage and wellness fee” at Blackbelly, along with Santo, his fast-casual spot focusing on New Mexican cuisine.
The 20 percent charge included on all bills — with additional tips appreciated, but not expected — is pooled and split between front- and back-of-house workers. Rosenberg says it’s been easier to retain workers since implementing the new fee system in 2020. “We haven’t noticed the kind of turnover other restaurants are seeing,” he says.
Blackbelly isn’t the only restaurant implementing this new gratuity system in Boulder, where food service workers have been pinched during the pandemic by rising costs in an industry with historically low wages. Similar fees have been rolled out at several local restaurants, including “Colorado comfort food” concept River and Woods on East Pearl.
“The fair wage charge is a little more equitable,” says River and Woods server Amaya Rios, who started at the host stand in 2020. Though she shared in the servers’ tips as a front-of-house host under the traditional tipping model, she didn’t necessarily feel it was fair that she got to do so. She sees the fee system as a more neutral way for everyone to join in on tips, since they don’t “belong” to just servers.
River and Woods owner Josh Dinar, who also runs the Israeli restaurant Ash’Kara on Pearl Street – which has a fair wage system, too – questions the industry assumption that customer tips will sustain employees’ basic housing and grocery needs. Under the traditional system, not every front and back-of-house employee is equally tipped. At higher ticket restaurants, Dinar estimates a server might walk home with $200 or $300 a night in tips, while the person cooking food gets around $15 an hour.
The tipping system is also susceptible to bias. A study by Restaurant Opportunities Center United and University of California, Berkeley’s Food Labor Research Center found that people of color and women are tipped less on average than their white, male counterparts, largely because they hold fewer front-of-house positions in restaurants.
“It’s an absurd model,” Dinar says. “If we can make it so a server makes $70 instead of $200, and back-of-house makes $25, $30 an hour, it’s a more objectively reasonable distribution.”
‘I’m happy to have this conversation over and over again.’
At Santo, Rosenberg divides the fair wage fee pool depending on how long each employee has worked there, how many hours a week they work and whether they work more than one position in the front or back-of-house. Similarly, River and Woods employees who have been there longer get a slightly higher percentage of the revenue than their peers.
As a server, Rios feels this division of funds encourages more community. She says her co-workers are less possessive over tips than at previous restaurants where she has worked. The fee system, according to Rios, reduces competition and allows staff to feel like they have the chance to learn.
But not everyone agrees.
“The downside to the fair wage fee is that good servers are giving money away. It’s frustrating when I see 22-year-olds come in and they’re straight up not working as hard,” says a server at another local restaurant with a fee system, who spoke to Boulder Reporting Lab on the condition of anonymity. “The idea is everyone hustles and fights for that extra couple of dollars, but you can’t make people care.”
Rosenberg says the fee system is not a perfect model for everyone. He’s seen some restaurants try it out for a bit before returning to the traditional tipping formula. And even at establishments like Blackbelly and Ash’Kara that have retained the policy, owners say some customers express sticker shock over the higher cost on their bill.
“We hear from time to time diners who are frustrated by it,” Dinar says of the fee system. “But I’m happy to have this conversation over and over again.”
Despite receiving training on how to discuss the fee system with diners, Rios says there’s never a good time to mention it. She usually only explains when people ask about the charge, but sometimes it’s after they’re already surprised by an unexpected cost on the bill.
But plenty of customers ultimately see the fee system as a positive step toward making the food service industry more equitable and sustainable for the workers whose labor drives the enterprise of dining out.
“As someone who’s worked in restaurants and appreciates a well-crafted dining experience, I’m a big fan of fair wage policies,” says Lucy Haggard, a former Ash’Kara server who has since left the industry. “I will often add a tip on top of a fair wage fee. But I don’t think I should be the one determining whether or not a server or the staff make enough money to live their life.”
Correction: An earlier version of this story reported that River and Woods owner Josh Dinar estimated a server at a higher-ticket restaurant might walk home with $200 or $300 per hour in tips. The estimate, however, was for nightly take-home pay.
Clarification: An earlier version of this story suggested that River and Woods employees earned approximately $70 per hour. However, the figure is dependent on a variety of factors. The article has been amended to include a more complete quote from owner Josh Dinar for context.
This article is quite timely as I dined at Santo’s last evening. I have to say, I was quite surprised by the 20% fee on my bill. Not by the amount, I always tip 20% of my bill unless service is very sub-par. If restaurants are worried about fair wages (which I understand), why don’t they charge more for the items on the menu? This is the transparent thing to do. They should also change their pay structure to make things more fair instead of putting this on the customer.
To me this practice, is dis-incentive for a server (or bartender) to provide good service which is exactly what I experienced last night. If everyone is making the same/similar wage, what’s the incentive to provide great service? Also, once you see your bill with the 20% fee that is very unusual, you have little incentive to add an additional tip. I think this is a bad idea….
I know the restaurants are under a lot of pressure, from the pandemic and inflation. Most restaurants are already charging noticeably more for menu items. I’m told this is because costs have gone up.
Coupling higher menu prices with a 20% surcharge will, however, discourage some of us from eating out, for practical reasons. Perhaps that’s okay for restaurants, as long as enough people can continue to fill tables.
What I see is: Restaurant workers can’t afford to live in Boulder, so we institute a dining surcharge to mitigate that problem–a housing-affordability problem. Meantime, fewer of us still hanging on to living here without six-digit incomes will have to make a choice: stop eating out, or move.
I believe this will detour customers at 20% surcharge restaurants….why not go to Louisville, Superior or Erie….where there is no surcharge….prices have already been raised due to pandemic and inflation! Many people can’t afford going out for a meal.
If this fee is to replaces tips, why are we (customers) taxed on it as if this is a product?
(the fair wages item is added before tax, not after tax)