As of summer 2018, in support of the rising minimum wage, we will be adding a 3% surcharge to all checks. Please take a moment to read our thoughts and how we arrived at this difficult decision. We hope you’ll understand that our motives are sincere and our course of action is necessary for a sustainable and fair working environment for all. We appreciate your trust and understanding. We will continue to put our heart and soul into providing you delicious food, exceptional service, genuine hospitality and great value.
Why not just raise your prices?
In a sense, we are, but we are going about it in the most transparent way possible. It’s very important to us that people understand we’re not doing this to improve our bottom line but to preserve the already difficult margins that exist today, with housing staff, flood insurance and freight, etc. But there’s more to it. Since we cannot predict how or what people will order in our establishment, raising prices by $1 doesn’t necessarily add up to an additional $1 to pay for these increased expenses. In fact, what the last several years have demonstrated is that every $1 increase you need, necessitates far more than a $1 increase in pricing. By implementing a surcharge, we’re confident we’ll have the resources we need to continue raising wages for all of our employees, not only those earning minimum wage.
Why do you need to raise wages for all?
Recent tipped employee wage increases have risen 70% in the last 2 years with another 30% more still ahead over the next 3 years. In addition, a court ruling excludes kitchen employees from sharing in those tips, thus there is a very large and now growing income gap between tipped and non-tipped employees. And since tipped employees are the only minimum wage employees restaurants typically have, they have been the primary beneficiaries of those increases. This is an unfortunate and unintended consequence but one we cannot continue to ignore. With a surcharge, we’ll be able to not only comply with rising minimum wage ordinances but ALSO slide that wage scale for the talented and experienced people in the kitchen whom are already above the minimum. This is happening all over the country. This is the only transparent method by which restaurants can absorb a 100% labor increase (for 70% of their staff) and maintain necessary staff and service levels. The other way, would be to raise all prices so substantially, that you would in turn artificially be paying larger tips on inflated check prices. We do not want that to happen. Thus, this is a much more transparent and upfront method that restaurants across the country have and are adopting. This surcharge does not affect or inflate the amount of tip relative to the food & beverage purchased.
Is there an alternative to this?
Yes there is. Unless there’s a change in labor code or a reversal in court rulings, restaurants will likely have to move away from the traditional tip model sometime between now and the implementation of $15/hr wage so that there is greater income equality. This can be done by implementing a flat service charge like 18-20% or by raising prices 25% or more. Some establishments have opted for a no tip policy with 20-25% price increases. By doing so these restaurants are able to ensure that those “tips” are distributed in a fair equitable manner so that all employees benefit without necessitating drastic price increases year over year. We think about this as a solution but in the end, we concluded that taking baby steps would be best for our business and our employees. Tipping is very much engrained in our culture and change will have to come slowly. The good news is that in the short term, we are able to raise the quality of pay for our kitchen crew.
What will everybody else be doing?
Nearly every restaurant in Ocean Beach agrees. The next couple years are going to be very difficult for our industry as restaurants do their best to grapple with the changes. Many restaurants will adapt by eliminating servers and having guests order directly at a kiosk or some sort of tablet device at the table. Many restaurants are already adapting by reducing the level of service by having you wait in line and order at a counter. For restaurants like ours, for whom service and hospitality are as much a part of the experience as the food itself, will have to tackle it in the manner in which we have proposed.
We want to thank you for taking the time to better understand the challenges we are facing to maintain our stride in operation and service. We know not everyone will like or agree with our solution but we do hope that we’ll be given the benefit of the doubt. Ultimately we’re doing this to preserve the quality of experience you’ve come to expect from us. We simply want to take care of our hardworking and dedicated employees and in the simplest of terms, to keep the lights on.
We appreciate you.
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1 Bungalow Walk, Ocean Beach, NY 11770
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