Dunedin restaurants put off by new server payment model

A Dunedin restaurant’s tipping abandonment was supposed to be about ‘data rather than drama’, but ancient employees say it’s definitely both.

The Black Pearl has introduced a new compensation model for servers. Instead of taking tips from home, servers will receive a flat 20% commission and an hourly wage of $1. Prior to the change, the restaurant laid off staff, employees told the Tampa Bay Weather. Since then, reviews from hotel employees and customers have caused review website Yelp to disable reviews on the restaurant’s page.

Owners Zachary and Christina Feinstein, under the company called The Feinstein Group, said they have restructured tipping protocols to provide better pay for support staff like busses and food runners. The Feinstein Group implemented the compensation structure months ago at its two other Dunedin restaurants: the Living Room and the Sonder Social Club.

Instead of customers choosing the tip amount on receipts, each customer will have a 20% service charge added to the bill. A server keeps 15% while support staff get the remaining 5%, Zachary Feinstein said. Customers can always add a tip on top of the fee, which would only go to servers.

They lowered hourly wages from $8 to $1 an hour for servers to raise kitchen staff pay to at least $15 an hour, Feinstein said.

Under the new structure, servers at Feinstein Group restaurants are no longer considered tip employees under Florida law. Their salary will mostly come from a percentage of sales, making them commission workers like real estate agents and car salesmen..

But before moving to the new compensation model on August 26, the Black Pearl laid off two servers and two hosts, the Feinsteins confirmed. They said they made the changes as part of a larger restructuring to make room for new positions like sommeliers. Some were fired for creating a “hostile work environment”, the Feinsteins said.

But Tabitha Crewe and Zachary Benson said they thought they were fired because they had questions about the new salary structure. The Feinsteins have denied these allegations.

“We knew they were going to implement a commission model and it was never clear what the specific structure for this restaurant would be,” said Crewe, who worked as a waiter at the Black Pearl for about a year and a half. “It’s not a model that’s implemented in many restaurants I’ve worked at, so I didn’t know what to expect.”

Crewe said she received a phone call from a manager telling her she had been fired because she was no longer “the right person”, about a week before the job structure went into effect. commission.

Some former employees spoke out against the model and posted on Reddit and Facebook claiming the owners lacked transparency about how the compensation structure would affect them. Crewe and another fired employee protested outside the restaurant on August 26. They said a dollar an hour was unfair.

Restaurant review site Yelp blocked new reviews from being added to the Black Pearl’s page due to “unusual activity” and received an alert that it was investigating the posts.

The Feinsteins said there was a misunderstanding about how the commissions worked and provided the salaries of their employees to the Tampa Bay Weather from other restaurants. The owners said the service charge increased waiters’ salaries compared to what they earned from tips. At the Living Room, the average employee was earning about $41.75 an hour (including tips and hourly wages) in February before commissions were implemented the following month. Living Room servers typically work 20-35 hours per week. Once they switched to commissions, they earned about $3.64 more per hour in March. The Feinsteins said servers working 35-hour weeks could see a pay raise of $15,470 a year.

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The Feinsteins said every penny of the 20% service charge goes towards salaries and disputed claims that it goes to pay for other restaurant expenses. They lowered salaries for waiters to provide more for kitchen staff.

The Feinstein Group called the commission model “data rather than drama” and said it was a paradigm shift for the hospitality industry.

A common misconception is that tips go directly to the server, but support staff also receive a percentage of the tip jar which can vary by restaurant. Zachary Feinstein said having a flat rate would give workers more stability in the amount of tips they receive, which fluctuates daily.

Tabitha Crewe, 36, and Whitney Southall, 29, protest outside their former employer, The Black Pearl, against a new pay structure that shifts waiters from tip employees to commission employees on Friday August 26, 2022 in Dunedin.
Tabitha Crewe, 36, and Whitney Southall, 29, protest outside their former employer, The Black Pearl, against a new pay structure that shifts waiters from tip employees to commission employees on Friday August 26, 2022 in Dunedin. [ LUIS SANTANA | Times ]

“It’s really looking to the future to advocate for higher wages,” he said. “And looking at the landscape of our industry as a whole, something will have to change going forward.”

Others have already tried systems without failover, some without success.

“It’s an interesting debate that’s been going on for a while,” said Brian Connors, food and beverage consultant and professor at Florida International University’s Chaplin School of Hospitality and Tourism Management. “But it’s not for everyone.”

Most notably, Shake Shack and Union Square Hospitality Group founder David Meyer introduced zero tipping at his popular New York restaurants in 2015. When the pandemic hit in 2020, he announced that he was ending the policy after customers and servers struggled to adapt. to change, the New York Times reported. This led to higher menu prices and servers missing out on the influx of people who tipped higher during the pandemic.

Part of the debate revolves around increasing salaries for support staff, although former Black Pearl staffers have said they believe this comes at the expense of servers.

Connors said it’s a noble experiment to switch to commissions for better wages, but many restaurants have struggled with its practicality. Server salaries are more dependent on upselling the menu than creating a good experience for customers, which can hurt the overall business.

But as Florida’s minimum wage slowly increases and inflation continues, Connors said more restaurants may be willing to explore a tip-free model.

Whitney Southall, 29, protests outside her former employer, The Black Pearl, against a new pay structure that shifts waiters from tip employees to commission employees on Friday August 26, 2022 in Dunedin.
Whitney Southall, 29, protests outside her former employer, The Black Pearl, against a new pay structure that shifts waiters from tip employees to commission employees on Friday August 26, 2022 in Dunedin. [ LUIS SANTANA | Times ]

“We were first told the commission model was going to happen about a year ago, around the time the minimum wage was going up,” said Zachary Benson, who was also fired from the Black Pearl. before the change in compensation model. He worked there as a waiter for seven years. “We expressed our concern because mathematically it seemed very questionable.”

Florida’s minimum wage will increase to $11 an hour on Sept. 30, part of an annual increase to bring the state to $15 an hour by 2026. The Feinsteins said they would pay employees minimum wage if sales commissions are not met.

“I sincerely believe they have created an excellent Black Pearl experience, one of the best you will find anywhere. I sincerely believe that,” Benson said. “My complaint is that we believe this is because all of the staff who were terminated from the Black Pearl had previously expressed concerns about the model. We believe this business model is very unfair.

The Feinsteins said they want to be transparent about the process because many people have questions.

“At the end of the day, we are people. We have a family. We are an open book,” said Christina Feinstein. “And before anyone can pass judgement, we’re just asking them to be curious and ask us as many questions as they can and we’re willing to share as much as they can.”

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