Will Oakland be ground zero in a new movement to ditch restaurant tips? The latest dining establishment to do so is Homestead (4029 Piedmont Ave.), a casually upscale neighborhood restaurant where chef-owners Fred and Elizabeth Sassen plan to raise prices and eliminate tips in order to pay for the city-mandated minimum wage hike that's coming next month — and to repair what they believe is a broken, industry-wide business structure, in which a server winds up making three times as much money as a cook.
In recent weeks, Bay Area restaurateurs have announced a variety of plans to address the minimum wage increases that voters in Oakland, Berkeley, and San Francisco approved this past November. These have included price increases, the implementation of mandatory service fees, and hybrid approaches that would retain some element of the current tipping system. By comparison, Homestead's plan is relatively straightforward: Menu prices will go up by about 20 percent across the board, and tipping will no longer be permitted.
The higher prices will be implemented on March 2, which is the day Measure FF — the bill that raised Oakland's minimum wage to $12.25 — goes into effect.
"Ultimately, what this costs the guests is nothing," Fred Sassen said, citing the fact that, despite the cultural expectation that many Americans have in regard to rewarding or punishing a waiter based on the quality of service, most customers currently leave around a 20 percent tip.
What the change will allow Homestead to do is to reorganize its pay structure. California law mandates that all of the money that a restaurant receives in gratuities be paid to employees directly involved in providing service, which is how a server at a busy upscale restaurant might wind up taking home $40 or $50 an hour even if his or her official wage is only $9 an hour. Sassen isn't the first Bay Area restaurateur to point out that back-of-the-house employees — i.e., the cooks — don't make anywhere close to that much, and that an unintended consequence of the minimum wage increase might be to widen that disparity.
"We are absolutely in favor of the raise of the minimum wage," Sassen said. But he believes that Homestead's new tip-free model ensures that his lowest-paid workers will be the ones to benefit. According to Sassen, a line cook will be paid $18 to $20 an hour under the new system, which is a fairly substantial raise. Meanwhile, servers will start out at around $20 an hour — a living wage, but potentially only half as much as they made when they received tips.
What remains to be seen, then, is whether servers currently employed at Homestead will leave en masse to take jobs at other restaurants that do allow tipping. Sassen said he hopes that they won't — and that because managers, who are not legally allowed to receive tips, will also receive a pay increase under the new model, high-performing servers will be able to make more as they advance in their careers. But Sassen is preparing for the possibility, which is why he announced the changes to his employees this past weekend, giving them a full month to decide if they want to stay.
Homestead joins Camino, Duende, and other high-profile Oakland restaurants that have decided to eliminate tipping — or, at least, to move in that direction.
Next month, an offshoot of the popular North Oakland pizzeria Nick's Pizza (6211 Shattuck Ave.) will open in Temescal, where owners Nick Yapor-Cox and Aron Ford are also planning to expand their menu.
Located in the space that most recently housed Barkada, Nick and Aron's (4316 Telegraph Ave.) will be a full-service restaurant offering house-baked croissants and scones in the mornings, salads and sandwiches for lunch, and appetizers and heartier entrées during dinner service — all of that in addition to serving plenty of pizza, of course. The original Nick's Pizza, where Yapor-Cox presides over the pizza dough and Ford heads up the morning pastry program, will remain unchanged.
Nick's is best known for its self-proclaimed "Oakland-style" pizza — a kind of cross between a California/Arizmendi-style sourdough crust and the somewhat heftier, red sauce-centric pies that are prevalent on the East Coast. According to Ford, the appeal of the new location, which boasts a 1,400-square-foot dining room and a 600-square-foot patio, is that it'll allow them to host guests in a more formal way that just isn't possible at their tiny pizzeria.
One of the quirks of the old Barkada space, which was originally designed to be primarily a bakery, is that two huge gas-deck ovens take up almost all of the kitchen space, meaning most of the food, by necessity, needs to be cooked in those ovens. For Yapor-Cox and Ford, who describe themselves as bakers at heart, that was a perk, not a problem.
As Yapor-Cox put it, "If there's anybody that's going to pull off making a full-service restaurant of that place, it's going to be a couple guys who know how to use ovens to their fullest potential."
In addition to the pizzas, the lunch menu will focus on sandwiches served on house-made baguettes, and dinner options will include roast chicken and oven-roasted mussels. Eventually, weekend brunch service will be added to the mix.
Nick and Aron's is slated to open in early March.
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