Since 2020, Denver’s bars and restaurants have been heavily impacted by the pandemic. It all started with a sudden pivot to takeout and delivery. Now that indoor dining has made a comeback, there are ongoing challenges resulting from supply-chain issues and labor shortages.
As owners and operators struggle to stay in business, one longtime standard has also begun to change at many local restaurants: tipping. There is a shift away from the traditional gratuity, or tips that can only be shared among front-of-house staff, and toward tip pooling or service charges that can be shared with kitchen staff, who often make less money than servers can at upscale establishments.
Tipped restaurant workers — including servers and bartenders — don't make the same minimum wage as all other workers. The federal minimum wage for tipped workers is a meager $2.13, while the Colorado minimum is $9.54. In Denver, tipped minimum wage is $12.85. This means that every time the waitress at your local diner clocks in for her shift, she's taking a gamble on how much she'll make. Plenty of other variables affect a server's earning potential from day to day as well, from the weather and the type of crowd drawn to the restaurant to the race, gender and perceived attractiveness of the server.
In theory, tip pooling offers servers more predictable pay while also making compensation more equitable for every employee. According to a survey from the Colorado Restaurant Association
(CRA), the number of restaurants using the traditional model has dropped 10 percent since January 2020.
"That said, the majority of servers and other front-of-house staff like the tipped wage model, and many want to maintain it,” notes Sonia Riggs, president and CEO of the CRA. “When New York City’s Union Square Hospitality Group [led by Danny Meyer] moved away from tipping, they reported that 40 percent of their best servers quit. We’ve also heard from some local restaurant groups who have moved away from the traditional tipping model that they lost upwards of 80 percent of their front-of-house staff.”
Coperta splits its service charge among all employees.
But that wasn’t an issue at Coperta
, the Italian restaurant from Paul Reilly and his sister Aileen. Reilly's restaurants, including the now-closed Beast + Bottle, used tip pooling for years, but in June 2020, Coperta switched to a 23 percent service charge that is split between all employees.
"We've had great success with this," Reilly says. "I'm not going to tell you it's perfect, but few systems are. But it has put a lot more money into the hands of our dishwashers and cooks, who work very, very hard." And guests can tip extra on top of the service charge (as long as they do so in cash), which then gets split equally among the teams. At the end of the day, Reilly says, servers at Coperta have seen little change in their overall earnings.
, an upscale eatery from chef Alon Shaya that is located in RiNo's Source Hotel, is taking a different approach to get more money to the back-of-house crew: a 4 percent "kitchen appreciation fee" that was added in the middle of 2020 and goes entirely to the kitchen staff. A gratuity is still expected on top of that.
"We did not want to force a 20 percent service charge, because we still believe that tipping should be determined by the guest based on the level of service they are receiving,” says Amanda Quintal, director of operations for Safta’s restaurant group, Pomegranate Hospitality. "In order to continue to cover all costs of operating restaurants and paying competitive wages, simply raising prices to bridge this gap will ultimately become unsustainable for our guests. This flat fee allows us to keep our prices reasonable and consistent."
According to Quintal, there has been little pushback from guests about the fee, and servers have been content with the change, adding that they have continued to see gratuities consistent with what they were making before.
"The thing is, it would probably be a lot easier if [tipping] just went away,” says chef Jackson Lamb, a professor of hospitality at Metropolitan State University of Denver. “But then we would lose a lot of the talent we see in the industry."
At the beginning of the pandemic, “consumers were so grateful for takeout and delivery options from their favorite local restaurants that they tended to tip more,” Riggs explains. "While some patrons have continued that practice...we’ve also heard anecdotal reports that this practice waned once restaurants reopened for in-person service, and particularly in recent months, as diners sometimes forget that restaurants are facing sky-high costs, supply-chain disruptions and a lack of labor, which can lead to smaller menus and slower service.”
But a decline in tipping could lead to major consequences. "Pre-COVID, Denver probably had one of the most dynamic restaurant scenes in the country,” Lamb notes. “COVID comes, completely decimates the industry — hospitality more than others. But if Denver residents want to get back the dining scene that we had, they're going to have to support it."
Riggs recommends that guests tip a minimum of 20 percent in any dining situation, and both she and Lamb agree that generosity is key, especially on small checks. If you go out to a restaurant and only get a single dessert, you're still filling a table and receiving a certain amount of service. While 20 percent of your $10 tab may only be $2, Lamb suggests leaving something closer to a $5 tip as a way to support your server.
There's a 4 percent "kitchen appreciation fee" at Safta.
A common misconception shared by customers is that the total you see on your check is the total you use to calculate the tip. While this is typically true, many restaurants provide coupons, discount nights such as ladies' night, and comped items, such as free desserts or drinks for special occasions. "Any time services have been provided, even at a discounted rate, you should [calculate gratuity] for the full amount," advises Lamb.
Another pandemic-era shift is the addition of time limits for dining, particularly during a restaurant’s busiest hours. This is to prevent "camping," or the practice of customers occupying a table for hours on end. When a diner takes up a table for three or four hours to catch up with an old friend, it prevents the server from getting new parties at that table, and may result in the employee having to stay on the clock for longer than normal. "If you're the camper and you're cognizant of that, then, yeah, you should be helping to pay the rent" by compensating with a higher tip, notes Lamb.
Takeout, which has become a much bigger revenue driver for restaurants since the pandemic, has also led to tipping-related challenges, with many opting not to tip, or to tip significantly less on food taken to go. "Restaurant employees dedicate significant time and labor toward the assembly of takeout orders," Riggs notes. With more people ordering takeout while not tipping at the average 20 percent amount, staff is left with smaller paychecks.
“Tipping and customer behavior overall has seen a recent decline in generosity, unfortunately, due to longer wait times,” Riggs says. “But that’s due to the severe labor shortage the industry is facing right now. State employment data shows that the Colorado hospitality industry lost 1,700 jobs in November . Now is not the time to be more demanding when dining out or ordering takeout or delivery; it’s a time to be patient, empathetic and kind as restaurant workers face increased demand with fewer colleagues and support."