Safety Harbor restaurant implements commission-based pay to grow and retain staff
SAFETY HARBOR, Fla. - A Safety Harbor restaurant co-owner and chef said a fundamental change in the business’ pay structure has helped its growth and his staff over the past year.
Aaron Stewart, the chef and co-owner of Southern Fresh for nearly 12 years, added a service charge onto checks in lieu of tips through a commission-based pay model. He said he and his business partners decided to make the switch about a year ago to fight rising costs and keep prices the same for customers.
Their menus, their servers and the checks all note a 20% service charge added to each check to pay workers more equally.
"The full-service casual restaurant industry is in jeopardy, because the tipped-based pay model just isn’t sustainable for us to keep moving forward without raising our prices," said Stewart. "So, we learned of a model, and we put a service charge onto our checks. We compensate our employees with a 15% commission and then their goal is to provide a great service and then get an extra 5-8% on the tip."
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The other 5% of the 20% charge goes to support staff like bussers, food runners, the hosts and hostesses and the bartender. It’s up to the customer if they want to give more. Kitchen staff are paid hourly, Stewart said.
Exterior of Southern Fresh Restaurant.
"The big thing is it allowed us to bridge the gap in kitchen pay and server pay," said Stewart. "Our labor pool, everybody was leaving in droves from our industry. It was tough."
In the past year since switching, Stewart said he’s been able to hire more staff, keep them and expand employee benefits.
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"We’ve been able to implement insurance reimbursement for our team, better vacation pay for our back of the house, and our back of the house team now works on a salary that they can afford to live," said Stewart. "We’ve come up with a plan that works for our restaurant. And with the commission model, the beautiful thing is it can be tailored. Every individual restaurant can set up a system that works for them."
Customers can chose to leave an additional tip if they want.
The model is not common in traditional restaurants. FOX13 reached out to University of South Florida’s Muma College of Business for context. Business Professor Faizan Ali shared in an email:
"Pay structures can vary widely depending on the type of restaurant, the role of the employee, and regional practices. Some upscale or fine dining establishments have different compensation structures compared to fast-food or casual dining establishments. In recent times, there has been increased attention to fair wages and labor practices in the restaurant industry, leading to discussions about minimum wage, tip distribution, and overall compensation, which also impacts how restaurants structure their pay models."
Ali continued to say via email:
"Florida, ranked high in tipping generosity with an average of 15%, raised the minimum wage for tipped employees to $8.97 per hour as of September 30th, 2023. Despite the increase, an interesting trend is that a significant majority of Floridians report being asked to tip service workers more frequently. Tipping practices are experiencing notable shifts, driven by structural and technological changes such as the widespread use of digital payment platforms and devices encouraging tipping. Additionally, trends in promoting more equitable pay for staff have been observed, with some establishments adopting practices like revenue-sharing models, service charges, or inclusive pricing to ensure more consistent income for all employees."
The Southern Fresh Restaurant is implementing a 20% flat fee.
Consumer Pam Lacey of Safety Harbor said she understands.
"The first time it’s kind of surprising. People are like ‘what?'" said Lacy. "They work really hard, and I used to be a waitress, so I understand, you know. This way you can hire better people too."
Other consumer said informing customers helps.
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"Just getting the word out, and I think it will become a positive input for those restaurants who deserve it. There are some restaurants out there where if they try this, it’s not gonna fly," said Julie Kunzeman, an Illinois native who lives in the Tampa Bay area part-time.
Southern Fresh owners say the commission-based fee helps ensure higher pay for all staff.
Stewart said he’s had some push back following the change, but he also has faith.
"We have lost some people that just don’t understand it and just say we’re not supporting that," said Stewart. "We would love to humbly ask everybody to just take a chance to understand the model. We do wholly believe in it morally, ethically and as a business decision."
Stewart said he believes more restaurants will make the switch since it’s customizable to what works for their business. A few St. Petersburg restaurants and a Dunedin restaurant group also do commission-based pay models, he said.