Service Fee Information

Dear Martha Friends and Family,
 
We recently decided to switch our business over to a ‘service fee’ model as opposed to the traditional tipping system, so - we wanted to take a little time here to provide some details about what exactly we are doing, and maybe more importantly, why. We share this in the effort to be as transparent and clear as possible, so as to help everyone understand it better and maybe even aid other people with similar intentions. The practice of tipping has been commonplace in American culture for the better part of two centuries and firmly etched into our minds as the only framework for paying restaurant workers. It took a lot of reflection to realize that for our community, here at Martha, there might be a better way. 

First let’s go over a few basics: 

What exactly is a service charge?
A service charge is a set percentage added to every guest check, in our case, 20%. This helps us pay fair labor wages and provide health benefits for all employees. It also allows us the freedom to distribute these wages fairly among the entirety of the staff without limit to position, thereby dissolving the usual disparity between back and front of the house staff. 

Why is this system better than traditional tipping for Martha?
Tipping, while practiced around the world, assumes a unique role in the United States. Most diners feel obliged to pay a healthy tip, because we are one of the only countries that allows businesses to offload the burden of paying workers a fair wage to their customers. Tipping is a legacy system that was adopted in America after emancipation as a way to extend the labor of slaves without having to actually pay them a fair wage. Loose change for a day’s work was all that was needed to meet the legal requirements of the new era. The practice of tipping has certainly evolved over the years, but many modern employers continue to see tipping as an opportunity to avoid paying workers real wages by relying on customers to tip their workers instead. That system, unfortunately, has many negative outcomes including abiding sexual harassment and racial bias from guests, tax evasion, poor credit, and many, many more. According to several different studies, tipping has often proven unnecessary or even harmful in motivating excellent service. Here are few links for further reading on the subject: 


Can I leave extra money for the staff?
Absolutely! (and thank you so much for your AMAZING generosity, both past and present). While Martha will certainly try to pay our employees a very fair wage for their work, and you definitely do not need to leave additional money, if you do leave extra cash on your table or utilize our Venmo account @MarthaStaffLove, that money will be directly 'donated' to the staff without filtration, and is greatly appreciated by all.

What if I don’t feel comfortable paying the included service fee?
If you are ever unsatisfied with any of your food, service or anything at all, while dining at Martha, please just ask for a manager and we will do everything we can to make it right :) 

How does it work for the employees?
Going forward, our employees are simply paid an hourly wage based on their experience and performance and teamwork and such. It is completely unrelated to the ‘service fee’ income that is generated on any given day or week or month. An employee's income is no longer determined by the customers, it is determined by our managers, just like a regular office job would be.
 
Our overall goal is to reexamine how and why we do things, and hopefully to find some new systems that would benefit the everyone involved. Like any good puzzle, there are solutions out there that can simultaneously help customers, employees, owners, and the greater community all at once.

Position Equity

For those of you who have ever spent any time at Martha, you have hopefully experienced firsthand a team made up of experienced, passionate, and highly skilled professionals who take great pride in their work; many of whom have chosen to make hospitality their career. Since the day we opened, we have always strived to create a true team environment, equally shared workload, and to make sure each and every employee feels safe, healthy and comfortable while at work.

We have always strived to bridge the gap in pay between bartenders and servers and the people who work in the kitchen as it seemed the fair and just thing to do. But there are some complicated logistics (and tax implications) to that system which left us thinking about the need for change. In order to truly balance the pay between the ‘front’ and ‘back’ of the house, the ‘service fee’ model was a necessary step.

Health Insurance

By implementing this new service fee / paycheck system, we can offer tax free group health insurance. While we have been providing our salaried managers with health insurance for a while now, we had been looking for ways to offer that benefit for all of our full time staff. By offering this service fee, we have a chance to do so.

Respect

Restaurant work is very difficult. The hours are long, and it is definitely physically and mentally demanding. Many aspects of the work also require great skill and dedication. The people who work at Martha are all professionals and certainly deserve to be treated with the same respect and admiration that we currently offer other occupations. A traditional tipping system seems to create an unusual power dynamic in which waitstaff are more susceptible to verbal abuse and / or sexual harassment from our guests. Data shows that the food service industry accounts for more sexual harassment filings (referred to as “charges”) with the Equal Employment Opportunity Commission than any other industry.  For reasons we cannot explain, customers often treat restaurant workers as beneath them or inferior in some way. That needs to change.

Social Justice

Our decision was also clearly influenced by the recent protests following the murder of George Floyd and the nationwide calls for reform to our current policing systems.  Sadly, a customer's tips are quite often directly related to a server’s skin color, gender and / or sexual orientation. In our new system, an employee’s pay is based solely on performance and experience and is hopefully free of such deplorable bias. Tipping clearly has its roots in slavery and this is seemed like an especially good time to put an end to that unfortunate connection.

  • A Cornell University School of Hotel Administration study in 2008 found that consumers of both Black and White races discriminate against Black service providers by tipping them less than White service providers. Furthermore, this server race effect on tipping is moderated by perceived service quality and dining party size. The study discusses the theoretical and practical implications of these findings. Particularly noteworthy is the possibility that if such tipping practices lead to negative outcomes for Black servers (such as lower earnings), the use of tipping as a form of compensation, is actually a violation of the Employment Discrimination law in the United States.


Financial Stability

Another benefit of this new model for our staff is having a reliable and consistent income. The inherent fluctuations from week to week or season to season of the old model can make restaurant work feel a little fleeting and temporary. With this new system we are hoping to provide greater stability for our employee’s income, which hopefully allows them to budget wisely and make sound long term financial decisions. Having this fully reported income on paper is pretty important for establishing credit and buying homes and cars and all the other things people like to do :)

This is a new system with one goal in mind: giving everyone who works within our space a fair & livable wage.