If you really love restaurant workers, you’ll start paying your tips in cash.
Star Tribune columnist Jon Tevlin reports today that one prominent restaurant chain is going to start deducting the cost of credit card fees from tips intended for the wait staff when the customer includes the tip on a credit card.
Blue Plate Company, owner of Freehouse, Highland Grill, the Lowry, Scusi, Three Squares Restaurant, Longfellow Grill, Edina Grill, and Groveland Tap, is absorbing a $1.25 million increase in cost because of the new health care law and the minimum wage, Tevlin reports. But the staff will pay for the credit card charges on tips. That should reduce tips by 2 percent.
The owners said that absorbing the health care costs and minimum wage hike at the same time is a “perfect storm.”
Still, making servers pay for credit card charges seems cheap to some. “We believe that the industry is over reacting,” said Wade Luneberg, secretary/treasurer of MN State Council of UNITE HERE Unions. “Putting [minimum wage] fees on tickets and passing the cost on to consumers directly is strange at best, and creates an ‘us against them’ mentality while ordering dinner.”
Luneberg added that Blue Plate joins Parasole Restaurant Holdings in asking servers to pay credit card fees, and notes both are among the most successful restaurants in town.
“Parasole had $30 million in sales last year and just opened a new Tim McKee restaurant in Calhoun Square,” Luneberg said. “Blue Plate just opened a 300-seat facility in the warehouse district with a full brewery. [They also just announced they will operate a restaurant at the State Fair]. Business must be terrible.”