Duo Restaurant Takes the Lead and Adds Kitchen Livable Wage Surcharge

The restaurant industry in the United States in general as well the local Colorado restaurant community have considered and largely rejected the elimination of the tipping system. In Denver and Boulder, Zoe Ma Ma kept a no-tip policy at its two locations, but the family-owned eatery is a casual counter-service operation. Nationally, the leader of this movement has been restaurateur Danny Meyer, who eliminated tips in nine of his restaurants since the fall of 2015.

Keith Arnold and Stephanie Bonin announced yesterday that their restaurant, Duo, a staple of the Highland area, is adding a 2% surcharge that goes directly to the kitchen staff. This is essentially a menu price increase that is directed solely at the kitchen staff.

The goal of the change is to balance out the pay disparity between front of the house and back of the house staff. Here’s the message that Duo shared with its guests:

To all of our incredible supporters, friends, and diners:

Beginning tomorrow, June 16th we will be changing our business model in order to be able to pay our kitchen staff more fairly in relation to the rest of our team. The disparity between service staff and kitchen staff compensation has been growing for many years. We want this to change both for the benefit of our kitchen team and to continue to have our restaurant embody our personal values.

We are writing you because we want:

· To be transparent to all about what we are doing.

· To explain why we are doing it and why it is so important to us and our industry.

· To ask for support as we implement a new approach.

Generally in restaurants, tipped service members can make 1.5 to 2 times as much as non-tipped kitchen employees. That is a big gap. The fundamental issue underlying this widening gap is that tipped employees are tied to top-line revenue increases and minimum wage increases, whereas kitchen employees are tied solely to bottom line results. Every time we increase menu prices to cover inflation somewhere in the expense structure, we cover the expense but widen the wage gap. Every time there is a mandatory minimum wage increase, it widens the wage gap. How can we as owners tolerate a scenario whereby half of our team’s compensation is about 50% lower than the other half’s? We need to connect (at least part of) their compensation to top line revenue if we want to correct the disparity.

Beginning June 16th, we are making a small change. We are implementing a 2% Kitchen Livable Wage Surcharge to your bill. 100% of the surcharge will be divided amongst the kitchen staff based on the number of hours worked. We know many people will ask, “Why don’t you just raise your prices? Our response is that in fact, we are raising prices, albeit in a different way that specifically aims to close the wage gap between service and kitchen staff.

For small restaurants that don’t want to sacrifice craft or integrity in order to serve the communities they love, we believe this is a fair, effective, and sustainable approach. We know that by making the compensation more equitable, we are cultivating a team of employees that feel valued and respected. We support our local farmers, our community, and our staff. We know this is part of what you love about us. This change continues those values.

We thank you for your continued understanding and support.

Keith and Stephanie