Kitchen Livable Wage
To our valued guests,
As of January 1, 2019, in support of the rising minimum wage, we will be adding a 2% 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 and will continue to put our heart and soul into providing you delicious food, exceptional service, and genuine hospitality.
Dining here isn't cheap, why don't you pay your employees more money?
Dining with us is by no means inexpensive. However, it might surprise you to know that restaurants only average 4-7 cents on the dollar after all expenses are paid. This was industry standard before minimum wage started to climb. The implementation of State and local ordinance has created a scenario where we cannot legally use tips to pay employees who are not in direct contact with guests. i.e., kitchen staff.
Why not just raise your prices?
In a sense we are, but we're going about it in the most transparent way possible. It's important to us that people understand we're not doing this to improve our bottom line but to preserve the modest margin that exists today. However, there's more to it. Raising prices by $1 doesn't translate to an additional $1 to pay for these increased labor expenses. By implementing a surcharge, we're able to distribute each dollar collected directly to our kitchen personnel. The surcharge is designed to have minimal impact on our guests. See the example below.
2% kitchen livable wage method
Total bill $122.00
10% menu price increase method
Total bill $132.00
Why do you need to raise wages for all?
Due to a peculiar Colorado Labor Code that excludes tips as income (even though we pay payroll taxes on those tips), and the inability to use server tips for kitchen income, there exists a vast and growing income gap between tipped and non-tipped employees as large as 300%. Moreover, tipped employees are the only minimum wage employees restaurants typically have. Minimum wage increases have unfortunate and unintended consequences that we cannot continue to ignore. With a surcharge, we can comply with minimum wage ordinances but ALSO raise the pay for those wonderful people in the kitchen who are already above the minimum.
I'm just a diner, why should I care?
Without getting into the politics of minimum wage, we support the idea that anyone working full time, should be able to afford some basic standard of living. Our full time kitchen staff makes on average $30,000 a year pretax. It hurts to acknowledge this, but the sad truth is that a well-paid cook in Winter Park is making around $15-18/hour, where the average in the industry is approximately $13 or less. Those in the front of the house are earning 2 – 3 times that. Chances are, you dine in restaurants like ours because you care what the cow ate, how the fish is caught, whether the chicken roamed free or how the vegetable is grown, so we should also care about those who are skillfully preparing our meals.
Is there an alternative to this?
Yes, there is. Unless there's a change in labor code or a reversal in the court ruling, restaurants will likely have to move away from the traditional tip model so there is greater income equality. One solution includes a flat service charge of 18% – 20% and increasing menu costs by 10-15%. By doing so, restaurants will be able to ensure that those tips are distributed in a fair and equitable manner so that all employees benefit. We've been very outspoken in favor of this solution, but in the end, we concluded that taking baby steps would be best for our business and our employees. Tipping is engrained in our culture, and change will have to come slowly. The good news is that in the short term, we can raise the quality of pay for our kitchen workers.
What will everybody else be doing?
No idea, but change is coming! The next couple of years are going to be very difficult for our industry as restaurants do their best to grapple with increased costs. Many restaurants will be forced to reduce hours and adapt by eliminating servers. Most likely guests will order directly at a kiosk or a tablet at the table. Many restaurants are already changing by reducing the level of service by having you wait in line and order at a counter.
We want to thank you for taking the time to understand better the challenges we're facing. 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 your experience that you've come to expect from over 40 years at our restaurant. We hope that you appreciate that our food and service is only as good as our employees.
We appreciate you,
Deno’s Family and Staff