Restaurants Strive For Equitable Wages With Revenue Sharing

Restaurants are trying "revenue sharing" in an attempt to close the wage gap between tipped and not tipped workers, and to help fix the labor shortage in Boston.

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Some big city restaurants can't find enough kitchen staff. Restaurant owners say that's because of low wages and a gap in pay between employees who get tips and those that don't. To bridge that gap and raise wages, some restaurants are experimenting with pay structure. Simone Rios of member station WBUR takes us to a Jewish deli in Cambridge, Mass.

SIMON RIOS, BYLINE: The lunchtime rush is over at Mamaleh's Delicatessen, but the place is still buzzing. Customers nosh on knishes, pastrami and lox. Then there's the chopped liver being made by line cooks like Marvin Bonilla.

UNIDENTIFIED MAN: Twenty-three ribs and...

RIOS: He came here three years ago from Honduras.

MARVIN BONILLA: If you want to have a good food, just try our matzo ball soup. You can get our pastrami and the house lox salmon. You will love it.

RIOS: And Bonilla loves his job, but there's a but. On average at Mamaleh's, those who work in the front of the house and earn tips make twice as much as people in the kitchen.

BONILLA: If we get busy or we're slow, we make the same, but for these people, if they got busy, they make more money. And then you see who, like, really do the hard job. We're like - the back kitchen is the fire of the restaurant, and we're, like, making the whole food.

RIOS: Restaurant owners say the wage gap is at the root of a shortage of kitchen workers. To address the problem, Mamaleh's Deli is one of at least a dozen restaurants in the Boston area to adopt what they call revenue sharing. It varies from restaurant to restaurant, but the mechanics of revenue sharing are simple. Take a percentage of sales and funnel it to kitchen workers. At Keith Harmon's three Boston restaurants, a 3 percent fee on all sales goes directly to the kitchen.

KEITH HARMON: Now what you're doing is you're converting the idea that the busier the restaurant is, the better it is for everyone who's working in back of house.

RIOS: Harmon says that before revenue sharing, tipped employees earned about two and a half times as much as back of the house staff. Now the gap has been cut by about a third. The reason it's a fee is because simply raising prices would also increase tips and perpetuate the wage gap. And Harmon wanted a way to close the wage gap without eliminating tipping entirely.

HARMON: We didn't want to alienate the tipstaff to take care of the non-tipstaff, so we kind of came up with this pennies-on-the-dollar approach.

RIOS: Revenue sharing has already taken off in California. A spokesperson for the California Restaurant Association calls revenue sharing the emerging new norm, but it seems to be confined to a handful of wealthy cities on the East and West Coast. At Mamaleh's Deli in Cambridge, they're experimenting with raising prices and dedicating 5 percent of food sales to kitchen staff. Dan Meyers is a regular at the Jewish deli, and he says hard work should pay well.

DAN MEYERS: I'm happy to pay another 20 percent. No, really. I mean, it's a great thing. And it shows that the people running the place and owning the place - it's not just lip service. They care about their people.

RIOS: Mamaleh's Deli also cares about keeping its kitchens staffed. The restaurant is constantly hiring, and they hope revenue sharing will reduce turnover. The only thing line cook Marvin Bonilla's turning over are the potato latkes. He's beaming at the idea that his pay will go up as much as three dollars an hour.

BONILLA: We are all happy about that. We invited people that are, like - maybe they were looking for a job, and they would, like, maybe want to get a good place to work. This is one of the best place I ever work in my life.

RIOS: And then there are the fringe benefits - all the matzo balls, chopped liver and latke a line cook could want. For NPR News, I'm Simon Rios in Boston.

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