Tyler, a 40-year-old server based in Los Angeles, had worked at Petit Trois for about six months before deciding to leave.
It was a tough call, said Tyler, who asked that his last name be omitted from this story. He enjoyed his time at the French restaurant, but felt as though he was making less money than he could elsewhere.
One of the reasons for this? Petit Trois adds an automatic 18% service charge on its bills. Since the publication of this article, Petit Trois has reduced its service charge to 4%. This update comes after hospitality company L'Esperance took ownership of Petit Trois.
Tyler said it was hard to tell, on average, how much he made hourly with tips, but customers tended to tip way less than he was used to.
In a way, it felt like he was being stolen from, Tyler said. From his perspective, such fees allow “a restaurant owner to circumvent the law, which states that tips belong to servers.”
Adding insult to injury, there’s “oftentimes there’s no oversight as to how this money gets dispersed and what happens,” he said.
“If a restaurant or an establishment is using the money for their own purposes, they are essentially stealing from the wait staff.”
Shannon Liss-Riordan, a labor lawyer who represents wait staff on the issue of service fees not being passed on to them, agrees that in many cases, service fees allow employers to steal from servers.
“It is legal theft if the fees are being charged by employers in the guise of being gratuities for the wait staff, but they’re not paid out to the wait staff,” she said. “If a restaurant or an establishment is using the money for their own purposes, they are essentially stealing from the wait staff.”
Creating confusion
Liss-Riordan recently filed a class action lawsuit against Joint Venture Restaurant Group, the parent company of popular Los Angeles restaurant Jon and Vinny’s, on behalf of Jordan Slaffey, Kara Jobe and other servers who have worked for the restaurant group. The suit alleges that Joint Venture Restaurant Group failed to pay its servers the full gratuities they received under the service charge.
The argument behind the case, according to Liss-Riordan, is that if a “reasonable customer” understands the service charge as a tip, then it should be treated as a gratuity and paid out to the wait staff as such.
“We had our first trial on this issue in California earlier this year, against the Marriott Marquis in San Francisco, where the court agreed with us, that a reasonable customer would understand the service charge to be a gratuity,” she said, “and the courts entered a verdict of about $9 million dollars needs to be repaid to the waitstaff.”
Tyler said that, in his experience, customers were sometimes confused by the service charge, or interpreted it as a tip.
“To me, it’s not a coincidence that these charges are often anywhere from 18 to 22%,” he said. “That’s essentially what a tip is.”
Liss-Riordan said that the servers she has represented have expressed distain over the charge.
“Servers are often very upset their employers impose service charges on bills, which lead customers to believe that they’re gratuities, but they’re not actually being used as gratuities,” she said. “Because first of all, they’re not getting that money that customers are paying for their benefit. Secondly, customers are very unlikely to leave much, if anything, in the way of tips for the wait staff if they think that the wait staff are already getting this generous gratuity.”
Not transparent enough
Jordan Slaffey, a former Jon and Vinny’s server who is named in the class action lawsuit, thinks the charge at the Los Angeles restaurant was not transparent enough. She said she was confused, as were customers, about where the money was going, and they couldn’t seem to get an answer.
“The service charge isn’t transparent. It wasn’t clear as to where it went and where it goes,” Slaffey said. “And it confuses the customers. Most of the customers, I would say about 80% of customers, didn’t tip because they thought it was included.”
Slaffey said that sometimes customers would even write “included” on the tip line, yet the service charge wasn’t actually a tip.
Tyler agreed that customers at Petit Trois were often confused by or even angry about the charge, and he believes these feelings are justified.
“Customers are right to be a little bit nay-say about this charge and not really understand where this money is going,” he said. “And be angry when their server hands them a check that has a 18% mandatory tip attached to it that is “not a tip” and then essentially to be solicited by your server for an extra tip on top of the 18% that you already paid.”
High turnover
Both Slaffey and Tyler said the main reason they left their positions at their respective restaurants was the service charge.
Slaffey estimated that about 10 to 15 servers left her Jon and Vinny’s location due to the service charge before her departure. And Tyler believes experienced servers are unlikely to deal with service charges for long.
“I mean, working in a place like that as front of house, you see how little you end up making compared to what you were making before in a place that relied on tips,” Tyler said, noting that “any server that has been in the industry for a while, that has experience, has chops and is good at what they do, is not gonna stay with that position.”
Another restaurant Tyler Tyler worked at opened a second location using a service charge model. When staff found out that was the case, many of them decided to leave, he said.
Slaffey said that while she would work at a restaurant with a small service charge, such as a 3% health insurance fee, she wouldn’t work somewhere with a high service charge again.
Awkward conversations and less motivation
Another feature of service charges are the awkward conversations that can come along with them. Some servers have taken to Reddit to express their distaste for the practice.
“Exactly why I left my last job. It was so awkward trying to explain to tables. Because honestly, I also don’t know what the hell it does or where it goes,” said Reddit user Supergaymagic.
Another Reddit user, who says they worked for Jon and Vinny’s, noted that it was difficult to have conversations with guests about service charges because they didn’t know where the money was going.
“We were not seeing any of the so called ‘benefits’ of it at all. People would ask me point blank if it goes to me and I couldn’t even answer their questions because I never saw any of it on a check and there was no proof of where it was going at all,” said user Significant-Cow5619.
Tyler said he would typically not say anything about the charge to his tables and instead would highlight the disclaimer on the receipt. If customers asked about it, he would explain that the service charge is not a tip.
“And this happened every night, multiple times. And that’s not a nice position for a server to be in,” Tyler said. “It sucks for the server; it sucks for the guest.”
In addition, Tyler said that using a service charge diminished the motivation he typically felt when earning tips. “When I know that I’m not seeing any of the—what I look at as commission—on that sale, I’m far less motivated.”
Other servers said that service fees have some benefits.
“That service fee bumped all [staff’s] hourly. Which in turn made a portion of the tips (% decided by the foh staff) available to be shared with all boh. There was no wage theft,” according to Reddit user high_while_cooking, who said they worked for Joint Venture Restaurant Group
Update: This article has been updated to include, "Since the publication of this article, Petit Trois has reduced its service charge to 4%. This update comes after hospitality company L'Esperance took ownership of Petit Trois."