Restaurant Business

Pittsburgh Eatery Eliminates Tipping; Offers Servers Salary, Health Care and Shares Instead

Pittsburgh Eatery Eliminates Tipping; Offers Servers Salary, Health Care and Shares Instead
Image credit: Aaron Stidwell | Flickr
Reader Resource

Position yourself for growth in 2017—join us live at the Entrepreneur 360 Conference in Long Beach, Calif. on Nov. 16. Secure Your Seat »

In a strategic move that it argues will benefit consumers and staffers alike, an upscale Pittsburgh eatery called Bar Marco is slated to roll out a no-tipping policy come April.

Rather than receiving the minimum wage (which is $2.38 in Pennsylvania for workers who also collect tips), every employee at Bar Marco -- both in front and in back of the house -- will receive a $35,000 base salary, health care from date of hire and 500 shares in the business, reports Next Pittsburgh. Each share is initially worth $1 and will vest after three months.

Bar Marco co-owner Bobby Fry insists menu prices won’t change to accommodate this plan. “Our plan hinges on hitting revenues,” he said, “mainly the expansion of the wine room where gratuity and tax have been included since it launched.”

While restaurant guests are clearly intrigued by the new business model -- Bar Marco’s announcement has already been retweeted and favorite hundreds of times -- Fry noted that his staff is similarly enthused.

Related: How a $15 Minimum Wage in Seattle Could Leave Workers Worse Off

“They will have a lot of responsibilities, too,” he added, “like being present at bi-monthly finance meetings. We want complete transparency. We want people who want to be part of what we are doing and who want to grow with us.” All Bar Marco employees will work roughly 40 hours per week.

Of course, there are pros and cons to the tipping model. Waiters at high-end restaurants can take home a pretty penny, but a recent study found that 17 percent of all American restaurant workers live in poverty, according to NPR.

And though logic would suggest that tips translate into better service, some restaurateurs argue that removing gratuities from the equation actually improves employee initiative.

While no-tip service is de rigeur in Europe, Bar Marco joins a handful of stateside establishments turning the paradigm on its head. Restaurateurs in California, Kentucky and New York believe that the model alleviates pressure on patrons and also leads to less server turnover.

Related: Why This Bay Area Bistro Wants to Be Yelp's Worst-Rated Restaurant Ever

Edition: October 2016

Get the Magazine

Limited-Time Offer: 1 Year Print + Digital Edition and 2 Gifts only $9.99
Subscribe Now