Diner Drops Tipping, Raises Minimum Wage To $15 An Hour


delta diner

Todd Bucher, the founder of Delta Diner in Delta, Wisconsin, has to be summoned from the back of the restaurant to get on the phone. “I’m pushing through dishes, or I may be on the grill,” he explained.

That’s how it works for all of the diner’s employees. Rather than maintaining a strict line between the front of the house and the back of the house, the roles all overlap. And the caliber of employees is high: Bucher says he hires people at a professional level, akin to those he would have hired in the other industries he’s worked in.

All of that is why he made a big change last month: starting June 1, he got rid of tipping and instead instituted a $15 minimum wage for all adults working at Delta — the pay level fast food employees have demanded for the past three years in widespread strikes. (High school and college students make a minimum of $10.) Compare that to the industry median of $8.84 an hour. Delta employees “have [a professional] skill level, they deserve from a respect point of view a compensation model that’s reflective of that,” he said. “It’s just the right thing to do, but also the right thing to do for our business.”

In fact, he says that the no-tipping model is just “an outgrowth of our overall business model,” which hasn’t changed since he opened it up in 2004. “We have a very team staff-oriented model for our service,” he said. Tipping, on the other hand, doesn’t facilitate a professional team atmosphere in his mind. “From a philosophical standpoint, it’s a culture that runs contrary to how our operation runs,” he said.

He expects the change will also boost his business. “I’m able to, across the house, compensate people based on merit,” he said. That means he can keep his talented staff and continue to attract high-quality workers. “We understand that if we do our job in recruiting, retaining, and providing a platform for those people to go out and be successful with our customer base, we’re going to be very successful too.”

That will in turn keep customers happy. “We will continue to be a more viable business in the long term through our staff by executing the model and therefore creating a unique and very pleasing experience for like-minded customers,” he said. “It’s truly a win-win situation. That’s why we’re doing it.”

Instead of tips, the diner will add a mandatory 20 percent staff service charge in lieu of simply raising all prices by 20 percent. That way customers are aware that the extra money will all be funneled back toward staff compensation. And customers don’t need to worry that they won’t be able to reward and therefore expect good service. “At the diner, the service level is a direct result of hiring professional people that buy into what we’re doing here,” he noted. Tipping generally has little to do with service and more with arbitrary and sometimes discriminatory factors like gender and race. Attractive food servers, for example, make more than $1,200 more a year than unattractive ones.

By doing away with tipping and deciding to boost pay for employees, Delta has joined a growing number of restaurants and eateries, from high-end places on each coast to coffee shops, bars, and barbecue joints.


Reprinted with permission from Think Progress, a branch of The Center for American Progress