In May 2022 we began implementing a 10% administrative fee to each purchase at the bakery. The admin fee has replaced the option to tip through our POS system, and is not a gratuity, tip, or service charge. All admin fee proceeds will be used to increase the wages of our employees, excluding ownership.
When considering this move from tips to an admin fee, we had a lot of questions. And we’re sure you probably have a few, too.
What is an administrative fee?
It is a percentage – in our case, 10% – added to each purchase to cover certain costs. It is not a gratuity, tip, or service charge. It is not a tax. What costs will it cover? The proceeds from the administrative fee will only be used to increase the wages of all employees (owners excluded).
Why are we doing this?
Our workers are highly trained and skilled and we want to pay them the wages to match. Tips increased employees’ compensation, but inconsistently. The administrative fee allows us to stabilize employee’s wages without reducing them.
We now count ourselves among the growing list of businesses that have moved away from tipping in favor of an administrative fee, including Mamaleh’s Delicatessen, Brassica Kitchen + Café, and A&J King Bakery. In doing so we are working toward changing the narrative around what it means to work in the food and service industries, in which pay inequity is a serious ongoing problem. The administrative fee is a sure transparent way of working toward equal pay, whether between co-workers or workers in different companies.
What was wrong with tipping?
The tips our employees received increased their compensation, but were inconsistent from paycheck to paycheck. Employees should know what to expect in their paychecks, and the administrative fee allows us to improve and stabilize their wages.
As a general practice, tipping is not a perfect rewards system: tips do not always reflect the customer service received, and they separate customer-facing employees from those actually making the food. This distinction in value between departments contributes to and perpetuates pay inequality in the food and service industries, where each person in every department has a unique set of skills and plays an equally important role. Our primary motivation in moving away from tipping is to improve and stabilize employee wages. In doing so, we join other businesses in encouraging a shift in the cultural perspective surrounding the food and service industries.
Why are we paying for employees’ wages? Isn’t that your responsibility?
A significant portion of running this business goes to paying employees. So, customers shopping with us have always contributed to employee wages. When we increase our prices around every three years, a large factor in setting those higher prices is increased wages for employees.
So why not just raise your prices?
In effect, we are, but we are being transparent about how we do it. In separating the administrative fee, we’re telling you exactly where your money is going when you shop with us. These fees are our way to demonstrate to you directly where our core beliefs lie, and precisely where your financial support goes.
But I never tipped before. Why am I being forced to now?
You are not tipping when you pay the administrative fee; the administrative fee is not a gratuity, tip, or service charge. We are adding the fee in lieu of tipping through our POS system to ensure that every individual employee at the bakery receives a wage that reflects the skill, care, and time that they put into their work, no matter what department they’re in.
Why is the fee 10%?
We looked at a lot of data surrounding sales, employee wages, and tips over the past several years. The 10% allows us to maintain the average additional compensation that our employees have been receiving.
If you have more questions, you can always call us at (617) 739-0060. We kindly ask that you do not question our retail staff during a transaction.
Thank you for your support of our bakery and our efforts to make artisan-bakery and food-service work a sustainable and fulfilling career path for those who are passionate about it.