In the sleepy seaside town of Dunedin, a new compensation model for restaurant workers is rocking the boat.
The changes are being implemented today at Black Pearl, located downtown at 315 Main St. The same changes are already in place at the Living Room and Sonder Social Club, all within a mile of each other. the other.
The restaurants are managed by the Feinstein Group. The group, founded by couple Christina and Zach Feinstein, recently opened a second Living Room location in Wesley Chapel where the new compensation model is also in place.
Simply put, the change shifted employees at Feinstein Group restaurants to a commission-based model. The pivot is an attempt by the Feinsteins to preempt the $15 minimum wage increase and provide a living wage not only for servers and bartenders, but also for cooks, expos, dishwashers and other staff. from the back of the house, as well as the front of the house. the staff like the busses and bar backs.
“A problem in restaurants, for whatever reason, is that an employer’s humanity ends where the kitchen walls begin. You have dishwashers working five jobs, four jobs, three jobs, whatever, and you have a waiter working 20 hours a week making $60,000 a year,” Zach Feinstein told Creative Loafing Tampa Bay . “But everyone is human and everyone deserves an opportunity to make money.”
He and Christina Feinstein told CL that TFG pays employees based on experience and skills between $14 and $20 on average for front desk support staff, and between $15 and $22 on average for management positions. first rung at the back of the house. At the higher end, a line cook at one of their restaurants earns $26 per hour.
With the passage of Amendment 2 in 2020, Florida’s minimum wage will increase to $11/hour next month. It will increase by one dollar per year until the minimum wage reaches $15/hour in 2026. For tipped employees, this minimum wage is supposed to reach $7.98 in September.
TFG’s now-retired tipping model wasn’t much different from those of other restaurants across the United States.
Servers and bartenders earned their minimum wage and received tips from customers. These tipped employees would then share some of their tips with bartenders and busses at set rates.
At the Living Room in Dunedin, bartenders received 5% of liquor sales from a server, while that same server also paid an additional 5% to the bus, according to a docs pack TFG shared with CL.
Under TFG’s new commission model, the customer’s invoice is increased by a 20% service charge. Any money collected from service fees goes to the front of the house; paying servers and bartenders $1/hour helps TFG pay everyone else in the company more.
Commission rates vary at each TFG property depending on staffing needs, but using the Living Room as an example, TFG says servers, who earn $1/hour under the new model, receive a 15% commission. on sales (pre-cuts like comps or spills), with the extra 5% helping to raise wages for non-tipping employees like cooks, dishwashers, bartenders, food deliverers, and bussers.
Living Room bartenders also earn $1/hour under the new commission model, plus a 16% commission on their own sales (pre-discounts like comps or spills). Bartenders also receive an additional 2% of all restaurant sales, an expense of the TFG’s labor budget.
At the Living Room and at all TFG properties, guests all have the option of leaving an additional tip that accrues to the individual bartender or server, but servers and bartenders no longer have to tip support staff.
Based on real-world data from The Living Room, TFG estimates that their servers and bartenders — who receive weekly paychecks — all earn more with the new commission-based model than with the tip-based model where gratuity depended on customer whims.
TFG, which consulted with Seattle restaurateur Chad Mackay to develop the model, also passed on nearly 20 positive testimonials from current employees. Shades Bar and Grill in Inlet Beach and Brotula’s in Destin are two Florida restaurants that recently implemented a 20% service charge where servers keep up to 17% commission.
All TFG properties feature table tent explainers and a QR code that links to a video explaining the change. Most customers have been understanding, but Zach concedes that this model isn’t for all customers.
“I had a customer say, well, I usually tip 10%, where am I supposed to eat now?” Zach said. “Go eat fast food, don’t eat here.”
“The main reason we did this was to ensure decent wages for all restaurant staff and guaranteed, consistent income for employees who had already been tipped,” Zach added.
But some recently let go ex-employees at TFG restaurant The Black Pearl are also upset, and they took to social media this week to amplify their voices, prompting a flurry of backlash and backlash online. A Reddit post reached nearly 4,000 users.
Tabitha Crewe was among five Black Pearl employees made redundant last weekend and says anyone who pushed back against the new commission-based model was fired. Christina and Zach, however, say the employees were fired because they contributed to a hostile work environment and it had nothing to do with the new structure.
After the layoffs, The Black Pearl, a fine dining concept that seats 36 people, was left with just two servers and six back-office staff, leading to a temporary closure, which TFG calls a refresh and a new one. training with new employees. The restaurant is reopening tonight and former employees have planned a protest outside. Crewe expects former employees and their supporters to also congregate outside the Living Room flagship location.
Crewe told CL that economic problems, including inflation, continue to make the restaurant industry more difficult. She understands the pressure on small business owners everywhere.
She also wishes TFG had sat down with the front desk staff to fully explain the new model much sooner. The Feinsteins told CL that the new commission model was not yet worked out for the Black Pearl when Crewe was let go.
Zach and Christina, however, regret how they initially communicated their transition to the commission-based model.
“Hindsight is 20/20,” Zach told CL. “We thought we had done enough, but after the backlash, we realized that a comprehensive open book from day one would have better answered many of the questions we’ve since received from our customers… We value and value our employees , which is why we did it.”
A breakdown of the Feinstein Group’s commission-based compensation model, which is part of the onboarding material.
c/o The Feinstein Group
A social media post from former Black Pearl employees says the new structure “allows owners to control the money coming into the restaurant, in order to reallocate it to cover their running costs.” The Feinsteins dispute which claims and stated that the goal is to be able to pay a living wage to all of their employees and that 100% of the service charge goes to the staff.
Although Crew was suddenly laid off last week, among other things, and has expressed concerns about having to support her two children, she says she truly believes her former employers are good people with the right things. intentions.
“I personally hope they’ll be the most successful, but I think they need to find a better way to pay their employees,” Crewe told CL. “I have the greatest respect for chefs and their cuisine, and I think it was a great place to work. »
“The truth is, we’re not competing with other restaurants for staff, we’re competing for staff with Amazon, Google and big companies with big results,” TFG wrote. “This model ensures that we are able to attract top talent while always putting employees first.”
For now, TFG and the still salaried employees will be navigating new waters. Only time will tell if they will prevail.
UPDATED 8/26/22 3:45 PM Updated to further clarify that all money collected from service fees goes to the front of the house; paying front desk staff $1/hour helps TFG pay everyone else in the company more.