Food News

Why Duo's Kitchen Livable Wage Surcharge Makes Sense Now

Duo's new livable wage surcharge could give non-tipped employees a raise of $2 an hour.
Scott Lentz
Duo's new livable wage surcharge could give non-tipped employees a raise of $2 an hour.
Keith Arnold and Stephanie Bonin, owners of Highland neighborhood restaurant Duo, announced last week that they'd be implementing a new, 2 percent "kitchen livable wage surcharge" on Friday, June 16. And after a weekend of dinner service with the new fee, which was intended to provide additional income for non-tipped restaurant employees, Arnold says the move was resoundingly approved by Duo's customers.

"The response was off the hook — they were all so supportive," Arnold notes. But the restaurant owner wants to also reassure those who might ask, "Why are you doing this to me? Why are you nickel-and-diming me?"

The reason that the surcharge is presented as a separate line item on the customer's bill is to help reduce the wage gap between tipped and non-tipped employees, he explains. Federal regulations forbid tip-sharing with non-tipped employees, who have a higher minimum wage than tipped employees, so distributing gratuities to back-of-house staff is not an option. And merely raising menu prices doesn't address the gap, since increasing the price of dinner also increases the amount of tips.

Some might ask why cheapskate restaurant owners don't simply pay their staff more out of their profits. "That's where we continue to pull back the curtain on the business," Arnold explains, "where we're operating on 3 percent net profit in the restaurant industry."

So a small surcharge, which amounts to only $2 on a $100 dinner, can make a big difference for hourly employees. Arnold took his inspiration from Boston restaurateur Keith Harmon, who has instituted a similar surcharge at his restaurants Casa Verde, Centre Street Cafe and Tres Gatos. Arnold and Bonin looked at the numbers and talked to Harmon on how the fee has been working and decided that it was the right thing to do. "This is something my wife and I and my team have been talking about for some time," Arnold adds. "We got our heads around it and felt like it was the right fit."

Most of Duo's kitchen staffers earn $12 to $14 an hour, depending on their position and tenure. A couple of extra bucks on a dinner tab might not impact diners who can afford to drop hundreds of dollars a month eating out, but for service-industry employees trying to making a living wage, every little bit counts. "All said and done, [the surcharge] should give them about a $2-an-hour raise," Arnold points out. "The surcharge is divided equally based on hours worked."

So for a full-time employee, that 2 percent bump on your dinner tab could turn into several thousand dollars a year before tax.

That math makes sense to Duo's customer base, which has been sending supportive messages since last week's announcement. Here are a few that Bonin shared:

"Thank you for this message and your commitment to wage fairness. You are already one of my top-rated restaurants, and this is a further reason to support your craft. I will continue to do so, and to tell my friends about you."

"Good for you guys! I think this is an awesome idea. I waited tables a million years ago, and the
same disparity was in play then."

"Love your restaurant and love your progressive attitude. Good luck with it! Hope to be in soon!"

"I applaud you - and loudly! - for doing this. It makes me want to only eat at your restaurant (which I basically only want to do anyway if I had the money because the food is AMAZING). I will absolutely be telling everyone who wants to listen about this."

"Thank you for caring about the vital people behind the scenes."

Could this be the beginning of a trend in Denver restaurants? Better than Brussels sprouts or cauliflower, It certainly seems like an idea whose time has come.