Is it Time for Michigan to Completely Revamp the Way Tipped Workers Are Paid?
There's growing concern that a new minimum wage schedule that will raise wages for tipped workers in our state could severely hurt restaurants that are already struggling to make ends meet.
One restaurant in Northern Michigan has gotten creative, tacking on an extra charge on customers' bills which they're calling a 'labor fee.'
While some consider the practice controversial and complain that it makes dining out more expensive, the restaurant says it's simply trying to find a way to pay its wait staff a livable wage.
Adding a Transparency Fee
The Iron Bay restaurant in Marquette is not trying to disguise the practice - the restaurant is adding a 4% labor fee to each customer's check and referring to it as a 'transparency fee.'
Andrew Hilary is the General Manager and establishment owner. He tells WLUC-TV that he tries to reward employees for their longevity by giving them pay raises when they reach milestones.
“Our goal is to always give someone a dollar raise if they stayed for a year, and once they are here for a year and a half or two years, we try and bump that significantly as a ‘thanks for staying so long,’” Hilary tells the TV station.
He goes on to say that because of the restaurant's location, the amount of money servers make can vary greatly from day to day.
Pricing Policy Benefits Customers
Hilary notes that he's fielded a lot of questions and comments after someone posted about the fees on social media. He says that adding the fee instead of increasing menu prices is a benefit to customers.
“There are a couple of issues with just raising the menu price. If you are tipping based off percentages, that percentage is higher because I put more money on the menu,” Hilary said. “The other piece is tax. We all pay 6% tax when we go to a restaurant. So, if I increase the menu for that purpose, you are also getting taxed on that.”
What are your thoughts?
Are labor fees or transparency fees just part of the price of going out to eat? Should restaurants implement mandatory tipping policies or add fees for paying with a credit card?
Your comments are always welcomed in the comments section and on our Facebook page.
This Cozy UP Cabin is Way, Way Off the Grid
Gallery Credit: George McIntyre
Abandoned Star Theater: Taylor, Michigan
The 12 Saddest Episodes in Comedy Shows
Gallery Credit: Emma Stefansky