Why This Oregon Restaurant Instituted A 'No-Tipping' Policy

Before the pandemic, it looked like America's restaurants may have had a successful future embracing no-tip policies. According to Eater, the trend of wrapping gratuities into the price of meals, or instituting higher menu prices in order to pay servers a better living wage, caught on several years ago and it looked like the U.S. might have been embracing a national wave of change with revised methods for paying servers and staff in 2020. Once COVID-19 swept through the world, however, many restaurants scrambled just to stay open and it looked like this revised business model fell flat for a time being as the industry focused on survival.

Though, calls to abolish tipping have once again resurfaced. TVO reports that restaurants just don't pull in the same money that they used to, and this has led to staffing issues. Since the pandemic has encouraged cashless transactions as well, some servers also receive a smaller cut of tips as a result. One Portland-based restaurant has finally bucked the trend and made waves as a result of nixing tips, per Insider. Owners of "Russian gourmet restaurant" Kachka in the Northwest have now replaced tipping with a mandatory 22% service fee on all bills, raised its lowest wages to $25 an hour, and even extended medical insurance benefits to all of its employees. 

The restaurant released an official statement supporting the change, stating, "Tipping, at its most innocent, creates inequity between 'front-of-house' and 'back-of-house' workers, and at its most sinister, continues a tradition of racism." This bold decision has sent ripples through the restaurant industry and many have taken notice.

Kachka, the restaurant that abolished standard tipping practices, went on to counter critics that have taken offense to their new policy of included gratuity through service fees (via Insider). The restaurant stated that most of its clientele already tip above 20% and the new service charge ensures equal compensation to all staff. Kachka has only put the new policies into practice since the new year started, but they appear optimistic regarding the change. The only factor they didn't take into account is the emergence of Omicron and the effects the new wave of COVID-19 may have on their business in general.

According to owners, the restaurant can afford to pay its workers the new, higher rates evenly across the board thanks to the increased service charge. They also stated that while it might make more sense to simply raise prices, the current business model for restaurants works against that action and it makes more sense in the present time to implement an included gratuity. Kachka has made the first move and now only time will tell if the rest of the food industry catches on to this reinvigorated movement to completely abolish tips in favor of fixed living wages.