West Olympia restaurant replacing tipping with service charge
The owner of Iron Rabbit Restaurant and Bar in west Olympia has announced a plan to replace tipping with an 18 percent service charge on all checks, and to raise wages for all employees.
Starting Monday, proceeds from the service charge will go toward staff wages, commissions and benefits. In January, the restaurant will begin offering paid sick leave, a 401(k) program, and opportunities to earn extra pay.
“I believe that making this change for the Iron Rabbit is good for my entire team,” said owner Christian Skillings, who opened the restaurant at 2103 Harrison Ave. NW in 2005.
The Iron Rabbit, which employs 24 people, might be the first restaurant in Olympia to adopt such measures, he said, adding that “I’m sure I won’t be the last.”
Skillings said the plan will help employees such as cooks and dishwashers who can no longer benefit from tip-pooling practices because of a recent court ruling.
A movement to raise the minimum wage in Seattle already has led restaurants there to replace tipping with a service charge. In addition, Washington voters recently approved Initiative 1433, which will raise the statewide minimum wage to $11 an hour in January and to $13.50 by 2020. The initiative also requires employers to provide one hour of paid sick leave for every 40 hours worked.
Stephanie Davenport, spokesperson for the Washington Hospitality Association, said more restaurants across the state could raise menu prices or add service charges as the new minimum wage laws are implemented.
She said about 84 percent of the association’s businesses have fewer than 20 employees, and that smaller restaurants are more likely to take steps to reduce employee turnover, which can be costly to the bottom line.
“I would imagine the vast majority of restaurants in Olympia are fairly small businesses, so I don’t think a service charge will be their first line of defense,” Davenport said. “The first thing they’re going to do is take care of employees.”