WWBC Hospitality Charge explained
the friendly and generous reception and entertainment of guests, visitors, or strangers. synonyms:friendliness, hospitableness, warm reception, welcome, helpfulness, neighborliness,warmth, kindness, congeniality, geniality, cordiality, courtesy, amnability, generosity, entertainment, catering, food
"We found nothing but hospitality among the local inhabitants."
Why a service charge?
· For many reasons this will be the model adopted by more and more restaurants. As the amount of “socially acceptable” tip percentage has climbed over 20%, the wage gap between service staff and kitchen staff has grown immeasurably.
· Recently, the Ninth Circuit Court of Appeals upheld the Department of Labor's, 2009, Fair Labor Standards Act which prohibits employers from requiring inclusion of back-of-the-house staff in tip pools.
· Because everyone tips for very different reasons the idea of a tip being a performance indicator is antiquated. Meaning, your 10% tip may be indicative of poor service performance but your neighbors 10% tip is indicative of stellar service. It becomes impossible for staff to gauge why they are tipped certain ways or what they could do to improve.
· Increasing minimum wage requirements will hit small businesses the hardest, causing you to pay more for your meal. Increasing check averages and in turn increasing tip percentages. This will only benefit a small part of the team that creates your dining experience.
· Tip environments have been shown to be rife with biases, an additional benefit of the service charge model is a higher level of earnings equality.
How does it work?
· 100% of these funds are collected and distributed as wages and benefits to our hourly restaurant employees. This service charge allows us to compensate our employees at a fair, livable wage.
· Collecting these funds means you won’t pay more! All of our staff is payed well above the minimum. Keeping menu prices in real time with food and labor costs
· Service charges make it easier to check out at the end of the meal since there is no obligation to determine a tip.
· Guests can feel proud to support a company that is working hard to be a leader in closing the wage gap between front and back of the house employees!
How is sales tax applied when there is a service charge?
A service charge is considered revenue by Washington state and therefore must be applied pre-tax
The service charge percentage is applied to the cost of food & beverage pre-tax. Your food and beverage are subtotaled, the service charge is added, and then sales tax is applied to that subtotal. For example, $20 of food and beverage (dine in) has a $3 service charge. Since a service charge is considered revenue by Washington State, tax is applied to the $23 subtotal, which we collect and submit to Washington State’s Department of Revenue.
· Knowing that this is a new idea and may take some getting used to we opted for a blend of the old and new Instead of industry standard of 20% service charge we opted for 15%
· We left the tip line on for our guests to show their appreciation directly to the person that served them
· This also allows the incentive for stellar service to remain, while guaranteeing our entire staff makes an equitable wage
· This model ensures our service staff doesn’t have to fight for more tables, higher dollar nights, or sacrifice personal time in order to make a living.
What if we haven’t earned the service charge?
We hire, train, and retain employees that live our values. Genuine care of people is one of the attributes that determines employment. Earning the service charge through great food and service is our highest priority. We want to know if we have fallen short of your expectations in anyway. Always feel free to speak to a manager. We are happy to remove the service charge at any time should you feel we haven’t earned it. Our hope is this will encourage a conversation at the table concerning what we can do better so we can grow. Speak your mind before you type that online review!
Hows it going?
Its working really well! Our service staff is reporting an average of 5-10% tips on the gratuity line while earning a premium hourly rate. The stress of low paying nights or slower sales shifts is gone and they can budget week to week and for the month what their income will be. We have attracted some of the finest cooks to create your food. The common problem of front vs. back is eliminated as the team consistently works together to ensure your dining experience is top notch.
We appreciate our guests who have already provided us positive feedback about this new idea. We are determined to provide an honest and transparent place of employment for over 30 of Walla Walla's finest industry professionals!