Chef Nico Garza would really only like to talk about one thing: kitchen efficiency — how data down to the minute of prep time and milligrams of ingredients can help a restaurant optimally function.
But his recent experience opening a new downtown restaurant has him instead talking about wage structures and investor power.
Last spring, Garza helped open the House of Má Vietnamese home-style restaurant, with operating owners Louis Singh and Eric Treviño of Singhs Vietnamese restaurant, consultant and beverage director Jeret Peña, and restaurateur and hotelier Chris Hill. It shared a kitchen with Hugman’s Oasis tiki bar, which opened simultaneously in the Witte Building on the River Walk.
The restaurant opened April 30 but closed unceremoniously three weeks later, after a dispute over how staff was to be paid. The incident presaged changing dynamics in the food service industry, as restaurateurs grapple with high staff turnover, supply chain issues and workers leaving the industry altogether.
‘Make it, take it,’ front vs. back
Garza honed his ideas on kitchen efficiency working as a chef at Singhs for three years. He credits his data-driven approach with helping the North St. Mary’s Street restaurant survive the pandemic, as the kitchen was able to nimbly respond to changes in supply and demand as conditions shifted.
The restaurant’s workers were also able to make it through the uncertainties of the pandemic thanks in part to the wage structure employed by Singhs: all workers share tips.
Tip-sharing is unusual in the restaurant industry, which largely operates using a “make it, take it” system where customer-facing or “front of house” staff work for tips on top of wages, while kitchen or “back of house” staff who do not interface directly with customers work for a straight hourly wage.
Garza said he, Singh and Treviño wanted to bring a scaled-up version of their tip-sharing structure to the combined staff of House of Má and Hugman’s Oasis.
“If everyone stuck with that understanding, it would have been great,” Garza said. “I think it could have made a lot of waves” locally, he said, “but maybe greater than that, because not only is it hard enough as it is being in the restaurant industry, but we’re doing it through a pandemic, too.”
Everyone did not stick with that understanding.
Singh and Treviño did not respond to multiple attempts to reach them for this story, but as Garza tells it, the Hugman’s Oasis bar staff objected to small percentage of their tips being distributed to kitchen staff, and Peña and Hill agreed.
But in an interview with the San Antonio Report, Hill pointed out that current labor law limits tip-sharing to front-of-house staff. The applicable part of the Fair Labor Standards Act reads: “A valid tip pool may not include employees who do not customarily and regularly received [sic] tips, such as dishwashers, cooks, chefs, and janitors.”
Citing the law, Hill shut down the tip sharing system.
The kitchen staff responded by walking off the job; their last day of service was May 21. The House of Má website at first posted a “temporarily closed” banner, which changed to “permanently closed” by early June.
Garza said he sees it as an issue of will, whether or not workers were willing to see all staff as contributing to the success of the enterprise and deserving a share in the rewards — and whether the business side of the operation would agree.
Livable wages, sharing tips
Recent headlines have trumpeted a nationwide shortage of food service industry workers, with record numbers quitting in the past two months. Workers cite low pay, long hours, stressful conditions and lack of benefits.
Chef Andrew Weissman has countered the trend in the several restaurants he owns, paying above the minimum required hourly wage, instituting tip sharing where possible and providing benefits.
“We want to pay people so that they have livable wages,” Weissman said. “I think that’s where we are as a country right now. … At a certain point, you’ve just got to decide whether you’re going to pay the money that these folks deserve.”
At his Mr. Juicy burger joint on San Pedro Avenue, all workers share tips. Weissman said there’s no “front of house,” with all staff cross-trained to handle multiple duties of taking orders and payment and cooking. “It’s such a team effort. There really isn’t any division between anyone there and it works really well.”
Weissman called it a matter of ethics. “Everyone’s pulling their own weight, so everybody should share in the tip,” he said. “At Mr. Juicy, everyone shares in the fruits of their labor — even the dishwasher.”
His fine-dining establishment Signature offers an hourly wage for servers well above the national standard of $2.13 for tip-earners, plus paid time off and health benefits to all staff. Weissman said a new restaurant project in the works will offer a base rate of $18 per hour, mirroring a national trend.
“We know that’s above and beyond what other people are starting [at], but we … don’t want to have that stress of not having staff,” Weissman said, due not only to pandemic effects but also to the historically high turnover rate in the industry.
Chef Michael Sohocki said his restaurants have three different wage systems in play.
Though his Kimura ramen shop and Gwendolyn fine dining restaurant downtown use the standard “make it, take it” model, hourly wages are above minimum and a “tip out” system is used during busy hours when a host is brought in to help with service and customer flow. In that system, 1% of total sales during those hours is shared with the host, which in effect slightly reduces server pay.
“Servers will usually scream, because they have to pay a tip out now, and they’re not used to hearing that,” he said. “We try to explain that this is for the good of the service,” and in the end, everyone benefits.
At Il Forno SA brick oven pizza, Sohocki instituted what he calls a “tip integrated system.” By paying minimum wage and operating with counter service, Sohocki gains the flexibility to surpass labor law limits on tip sharing, and every employee shares tips.
“It’s egalitarian,” he said. The total amount of tips is divided by work hours and split among the employees.
Sohocki guarantees a minimum of $13 per hour, so if the shared tips do not reach that amount, he makes up the difference. He said that it took significant legal analysis to arrive at a system that met labor standards and worked for his employees.
“I’m completely sure that we have to divide equally at all times for this system to be fair,” he said.
Changes on the horizon
Sohocki is currently undertaking a big change with his group of restaurants, closing the downtown Kimura and Gwendolyn locations and moving them to the Five Points building on North Flores Street that formerly housed the 5 Points Local restaurant. The Gwendolyn name will change to Five Points Food and Wine, and offer a more casual style of service.
Each will have separate indoor and outdoor dining areas, and Sohocki will add a bar and lounge on the top floor called Dash.
Sohocki is in discussions with his bar and restaurant managers about which wage system to use for the new locations. Each perspective has it valid points, he said, with some employees in support of the traditional system and others looking to see a change.
“The direction that I would like to go, if it does not produce complete mutiny, is a permanent tip pool arrangement,” he said, which he acknowledged has upsides and potential downsides. Sharing tips can stifle the competitive nature of servers to excel, but the old way can pit them against each other. By pooling tips no matter the conditions, “hopefully, theoretically, that means that everyone will pull in the same direction,” ensuring that customers have positive experiences.
Hill said that while he shut down alternative wage arrangement at House of Má, the American restaurant industry overall could use a change.
“Wouldn’t it be ideal to get rid of the current, popular American tipping system, and go to just a flat, meaningful wage? That would just be a dream come true,” he said.
But Americans might not be ready for the “much higher” prices such a move would entail, he said, and employees who are drawn to the industry because of good pay from tips might not be willing to accept less cash on hand.
Speaking of his longtime establishment on Houston Street, Hill said, “a bartender at Esquire Tavern, for instance, makes pretty good money.”
He said the Esquire kitchen staff has been speaking out, and he agrees with them. “I think kitchen wages are too low. We’re in the middle of reassessing what we’re paying, and are adamant about making sure that everybody at the kitchen in the Esquire makes him a good wage.”
Hill said that while current labor law stands in the way of tip sharing across the board, a “service fee” system wherein a 20% fee is automatically assessed on each bill could be workable, but only if workers and diners are ready and willing to accept change.
Of possible alternatives, Hill said, “there’s models out there that would certainly be an improvement over what we have. But the short answer is, yeah, wouldn’t it be nice to do something else?”
Hill will have that chance when he opens a planned new restaurant in the House of Má spot.