Restaurant Is Adding A Mandatory 25% ‘Service Charge’ To All Checks To Ensure Their ‘Deserving Staff Members’ Get The Pay They Deserve
The 25% service charge isn't even going to the server, in most cases.
@boiling_overr / TikTok The tipping culture in the United States, among many other major socioeconomic issues, is getting wildly out of control. All workers deserve to be paid a fair wage, and Daisies in Chicago believes they’ve cracked the code — except, they have done the complete opposite.
A woman on TikTok named Sara Holcomb is calling out the Chicago-based restaurant for what she believes is a bad business practice.
Chicago-based restaurant Daises adds a 25% service charge to all checks to ensure equitable pay for their staff.
“Hey, uh, Daisies Chicago. Uh, what the f--k is this?” Holcomb asks in her video. “A 25% service charge is applied to all checks. That's a quarter of the entire receipt.”
Holcomb shows what looks like a page from their website that is dedicated to teaching people about the charge, titled “Learn about our service charge.” Likely believing that they’re doing something that’s shaking up the industry, they dedicated an entire page of their website to it, but Holcomb thinks it’s a bad thing for workers and customers alike.
“‘To ensure our deserving staff members receive equitable pay and benefits.’ Um, I'm sorry, I think that's the job of the employer,” Holcomb says, and she’s right. The employer is responsible for providing employees with equitable compensation — something that waitstaff are widely known for not receiving without the tipping culture being the way it is.
“Servers get paid $2 an hour, and a lot of that is taken out in taxes,” she claims. “Servers rely on customers to give them tips.” According to NerdWallet, the federal minimum wage for tipped employees is $2.13 per hour — that’s hardly a livable wage.
Thankfully, this number is boosted by tips, and therefore the tipping culture places the responsibility of servers getting paid on the shoulders of customers when it should be and always should have been the responsibility of the employer.
Sara Holcomb believes this sets a bad example for an already poor status quo.
“A place charging $25 for Gnocchi with no meat in it at all is now gonna charge $7 on top of that to a customer for the server automatically, no matter how big your party is?” she asks, rhetorically. “When are we gonna say enough is enough for these corporate places?”
To make matters worse, a ton of people in Holcomb’s comments said that these service charges never even make it to the servers — management pockets it all for themselves. And according to the New York Times, this is a correct assumption. As opposed to tips, which go directly to the server, "a service charge belongs to the employer, who can choose how to spend it," Brian Pollock, an employment lawyer in Miami, told the NYT. These additional service charges "are meant to help shore up a restaurant industry that has long run on slim profit margins and now faces a host of challenges, including inflation, labor shortages and an expectation — or mandate, in rising minimum wages — that workers get better wages and benefits," the NYT article explains.
“Watch, this is gonna spread,” Holcomb said. “It's gonna spread everywhere across America. This is only the f--king beginning, and we need to stop this s--t,” but a lot of people don’t seem to have a problem with it.
A quick search of the restaurant on Google shows that’s very highly reviewed, and many of the reviews actually see the service charge in a positive light. One Katharine Schrager says “Be prepared, as they disclose, to pay a 25% service charge — as someone in the industry, I’m glad to see that this supports health insurance, but this is still pretty high.”
However, when many people see this service charge added to their bill, it's not always made clear where the money is actually going. Many diners may assume it goes to the server and therefore forgo tipping, which most likely means the server leaves their shift with less income than they would've had the service charge not been included.
“When your server explains they ‘only’ get 10%, that makes you feel obligated to tip extra on top,” she added. They’re only receiving 10 of the 25%, and allegedly, the other 15% is going toward their benefits, but this still places the responsibility on the customer’s shoulders. Schrager even says that she feels obligated to pay more — imagine paying a 35% tip just because.
Waitstaff should be compensated fairly, and that means doing away with the dreadfully low minimum wage, increasing it, and not placing the responsibility of the server’s livelihood on the customers themselves.
Isaac Serna-Diez is an Assistant Editor for YourTango who focuses on entertainment and news, social justice, and politics.