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Title: Stirring Up the Restaurant World Publication Information Source: The New York Times. (Oct. 17, 2015): Opinion and Editorial: pA22(L). Document Type: Editorial

Copyright: COPYRIGHT 2015 The New York Times Company http://www.nytimes.com Full Text:

Danny Meyer has spoken. Will the restaurant industry and political leaders listen?

Mr. Meyer, the New York restaurateur and head of the Union Square Hospitality Group, announced this week that tipping would be ended at the group's 13 restaurants, including upscale spots like the Gramercy Tavern and the Union Square Cafe.

The no-tip policy is intended to close the widening wage gap between servers who earn tips and kitchen staff who don't. According to Mr. Meyer, ending tips and raising menu prices will allow non-tipped employees to be paid more, while server pay and the overall cost to eat out remain about the same.

This particular wage gap, however, is only one of the many corrosive aspects of tipping, and it mainly afflicts people working at high-end restaurants. The real power in Mr. Meyer's no-tip policy is its potential to force a broader debate on tipped work, including how to change laws that have made tipped work a path to poverty for most servers.

Under federal law, employers can pay tipped workers as little as $2.13 an hour, as long as that amount plus tips is at least the federal minimum wage of $7.25 an hour. States can set higher minimums, but most follow the federal law or have their own two-tiered systems.

Subminimum tipped wages reflect historical gender gaps in the restaurant industry, where most servers are women and are low paid. The restaurant lobby has fought successfully to keep server pay down, and the result, borne out in census data, is a high rate of poverty among servers.

Democratic bills now before Congress would end the subminimum tipped wage in favor of a single federal minimum for all workers, either $12 or $15 an hour. But passage will require supportive congressional majorities that have yet to materialize.

In the meantime, states need to do more, especially New York, where Mr. Meyer has gotten people talking about restaurant workers. Earlier this year, a wage board convened by Gov. Andrew Cuomo squandered the chance to end the state's two-tiered minimum wage. Instead, it called for raising the tipped minimum, now $5 an hour, to $7.25 by the end of 2015.

That is well short of the scheduled increase of the non-tipped minimum wage to $9 an hour. Although Mr. Cuomo in September called for a statewide minimum of $15 an hour, it remains to be seen whether any eventual increase will include tipped workers.

No state should have a separate and unequal wage system in which restaurants profit by underpaying workers -- nor should the nation as a whole.

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By THE EDITORIAL BOARD

Source Citation (MLA 7th Edition) "Stirring Up the Restaurant World." New York Times 17 Oct. 2015: A22(L). The New York Times. Web. 9 Nov. 2015.

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11/10/15, 12:56 PM

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Title: Union Takes a McDonald's Challenge Overseas Publication Information Author(s): Noam Scheiber Source: The New York Times. (Aug. 20, 2015): Business News: pB1(L). Document Type: Article

Copyright: COPYRIGHT 2015 The New York Times Company http://www.nytimes.com Full Text:

McDonald's long ago went global. Lately, the anti-McDonald's campaign has started following it around the world.

The union-led effort to raise wages and organize workers at fast-food chains in the United States is expanding its focus beyond organized protests at home -- its key point of leverage for almost three years -- to highlighting McDonald's actions abroad in hopes that foreign regulators will bring further pressure to bear on the company.

The efforts are intended to build on the success of the anti-McDonald's campaign in raising wages for fast- food workers in the United States, particularly in New York State.

But it is also a tacit acknowledgment that the campaign's second major goal, a union for workers at McDonald's and other fast-food restaurants, remains elusive. The activists plan to turn their attention to McDonald's in the overseas markets where its operations have been more lucrative recently as a way of drawing the company to the bargaining table in this country.

Scott Courtney, the Service Employees International Union official who is the architect of the so-called Fight for 15 campaign, laid out the new approach in his first on-the-record interview since he started working on the effort in 2012.

''I see this conversation as a departure point from a campaign that publicly has been seen as strikes and demands around $15 and the union,'' Mr. Courtney said. ''We intend to lay out what we can, what we know at this point, then embark on taking our case to other forums over the fall, into next year as we need to.''

To that end, dozens of legislators, union leaders and McDonald's workers from around the world have converged this week in Braslia, the capital of Brazil -- most of them at the S.E.I.U.'s expense -- to draw attention to their accusations against McDonald's.

The events will reach their climax on Thursday, when Mr. Courtney and several legislators and workers will testify before a committee of the Brazilian Senate. The witnesses are expected to describe what the campaign says are abusive labor practices at McDonald's restaurants around the world, the corporation's efforts to evade taxes in Brazil, and tax evasion and anti-competitive practices across Europe.

''In Europe, we have austerity policies,'' said Jutta Steinruck, a member of the European Parliament from Germany who will also be testifying on Thursday. ''If we don't take in taxes, it's an issue of social policy. We will not be able to pay subsidies for poor people, for their health care.''

The escalation of the international side of the campaign comes at a time when the financial performance of

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McDonald's has flagged, particularly in the United States, where the company acknowledges that business has been in decline for nearly three years. By contrast, growth in many European countries, particularly Britain, has been stronger.

The poor performance recently prompted a leadership change at the company, whose new chief executive, Steve Easterbrook, has begun what he has called a turnaround plan that would ''return critical markets to sustainable growth by regaining customers' trust and loyalty.''

Mr. Easterbrook has also vowed to transform McDonald's into ''a modern progressive burger company.'' One of his first major acts as chief executive was to raise the minimum wage the company pays employees at all of its corporate-owned stores to one dollar over the locally-mandated minimum wage.

Despite the financial strains and more conciliatory posture from Mr. Easterbrook, however, most analysts say the odds of a successful unionization effort at McDonald's remain daunting. There is little evidence that investors take the threat seriously: There was not a single question about the possibility during the company's second-quarter conference call with analysts in July, or even about the various regulatory actions unions have helped initiate abroad.

Meanwhile, the company's on-the-ground defenses against unionization appear next to impregnable.

''Unions have been trying to organize McDonald's for decades,'' said Richard Adams, who worked for McDonald's for more than 15 years, most recently as director of franchising in the Western United States, and now works as a franchise consultant. ''This is nothing new to McDonald's.''

Mr. Adams explained that even if the company decided to adopt policies that would help workers organize at corporate-owned stores, franchisees would probably simply ignore the efforts. ''The company has no authority or power to make those agreements with unions on behalf of franchisees,'' he said. ''If I was a franchisee, I wouldn't even read the memos.''

Still, McDonald's faces some additional challenges on the labor front.

Last week, the National Labor Relations Board rejected an appeal by McDonald's in a case that will decide whether the company is a joint employer of workers at its franchises. A joint employer determination would make it easier to apply any concession workers wrested from the McDonald's Corporation to workers at McDonald's franchises, including, for example, a card-check provision that could bring a union into existence at a store once a majority of workers signed union cards.

''The S.E.I.U. is hoping that if the decision comes out the way they want it to, the overseas efforts will be one more pressure point on McDonald's to grant some kind of organizing concession,'' said Glenn Spencer of the U.S. Chamber of Commerce.

The wage increase at McDonald's may also do little to appease its employees. A worker at a McDonald's in Chichester, Pa., said that she and her colleagues had their hours cut sharply after the wage increase went into effect on July 1, with the store's manager routinely depriving them of two or three hours of work on an eight- hour shift.

The worker, who spoke on the condition of anonymity for fear of being fired, said she had typically worked 65 hours in each two-week pay period before the wage increase. ''The last pay period it was 46 hours,'' she

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said. ''This pay period it was 43. Per week, that's 21-22 hours.'' (A second person who examined the worker's recent pay stubs corroborated her account.)

''Like any place of business, employee shifts and hours vary depending on the guest traffic,'' said Heidi Barker Sa Shekhem, a McDonald's spokeswoman. ''Our sales information for this location shows traffic was slower in July than in June, which may have impacted some employee shifts and hours.''

While McDonald's defenses at home remain strong, the labor campaign abroad hopes to weaken the company on other fronts.

The European Commission recently began looking into accusations leveled by a coalition of European and American unions and anti-poverty activists that McDonald's avoided over 1 billion euros in taxes in Europe between 2009 and 2013 by funneling royalties to a Luxembourg-based subsidiary.

Earlier this week, a Brazilian union filed a complaint with authorities in that country asserting that McDonald's has gone to elaborate lengths to avoid paying taxes there as well.

At the hearing in Braslia on Thursday, the anti-McDonald's campaign will unveil what it says is evidence that the company is engaged in anti-competitive behavior in Europe, where the unions say that McDonald's uses its market power to compel franchisees to pay far more in rent as a percentage of their sales than its corporate-owned stores pay.

Ms. Barker Sa Shekhem disputed the unions' calculations. ''In all of the markets mentioned -- the U.K., France, Spain -- our company-owned restaurants actually pay higher rents than franchisees'' as a percentage of sales, she said. ''We are quite confident in not only the legality, but in the appropriateness of the process.''

But the merit of each complaint may be less important than the overall labor effort to paint McDonald's as an outlaw corporate citizen. ''The approach is to throw everything out there and see what sticks,'' said Ruth Milkman, a sociologist who studies labor at the City University of New York Graduate Center.

Professor Milkman pointed to a campaign in Southern California in the early 1990s by immigrant construction workers, with the support of the A.F.L.-C.I.O. and the United Brotherhood of Carpenters. ''They collected thousands and thousands of documents about overtime laws that had been violated, then basically dropped all those cases in exchange for the union,'' she said.

In the interview, Mr. Courtney implicitly acknowledged a similar strategy. ''McDonald's could either go down this road of having issue after issue raised and public light shined on it, and they're not going to look good,'' he said. ''Or they can say, 'We're going to lead, we're going to turn our reputation around by turning our company's basic business model around.' ''

CAPTION(S):

PHOTOS: Scott Courtney, a leader of the Fight for 15 campaign, with protesters in Brazil. (PHOTOGRAPH BY FERNANDO CAVALCANTI) (B1); A demonstrator dressed as Ronald McDonald takes part in a protest in So Paulo, Brazil, for better wages for McDonald's employees. Union leaders are to testify in Brazil on Thursday. (PHOTOGRAPH BY ANDRE PENNER/ASSOCIATED PRESS) (B4)

By NOAM SCHEIBER

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Source Citation (MLA 7th Edition) Scheiber, Noam. "Union Takes a McDonald's Challenge Overseas." New York Times 20 Aug. 2015: B1(L). The New York Times. Web. 9 Nov. 2015.

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11/10/15, 12:59 PM

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Title: Tips Are Going Away at a Prominent Restaurant Group Publication Information Author(s): Pete Wells Source: The New York Times. (Oct. 15, 2015): News: pA24(L). Document Type: Article

Copyright: COPYRIGHT 2015 The New York Times Company http://www.nytimes.com Full Text:

In a sweeping change to how most of its 1,800 employees are paid, the Union Square Hospitality Group will eliminate tipping at Gramercy Tavern, Union Square Cafe and its 11 other restaurants by the end of next year, the company's chief executive, Danny Meyer, said on Wednesday.

The move will affect New York City businesses that serve 40,000 to 50,000 meals a week and range from simple museum cafes to some of the most popular and acclaimed restaurants in the country. The first will be the Modern, inside the Museum of Modern Art, starting next month. The others will gradually follow.

A small number of restaurants around the country have reduced or eliminated tipping in the last several years. Some, like Atelier Crenn in San Francisco, put a surcharge on the bill, allowing the restaurants to set the pay for all their employees. Others, including Bruno Pizza, a new restaurant in the East Village, factor the cost of an hourly wage for servers into their menu prices.

Union Square Hospitality Group will do the latter. Menus will explain that prices include ''hospitality,'' and checks will not provide blank lines for a tip. ''There will be one total, as if you were buying a sweater at Brooks Brothers,'' Mr. Meyer said.

The Modern will be the pilot restaurant, Mr. Meyer said, because its chef, Abram Bissell, has been agitating for higher pay to attract skilled cooks. The average hourly wage for kitchen employees at the restaurant is expected to rise to $15.25 from $11.75. Mr. Meyer said that restaurants such as his needed to stay competitive as the state moved to a $15 minimum wage for fast-food workers.

If cooks' wages do not keep pace with the cost of living, he said, ''it's not going to be sustainable to attract the culinary talent that the city needs to keep its edge.''

Other restaurateurs will be watching closely to see whether Mr. Meyer can change the deeply ingrained culture of tipping and still make a profit.

''Danny has a lot of trust out there with his customer base,'' the chef and restaurateur Tom Colicchio said, ''and if they're willing to pay higher prices, it's going to make it easier for everybody else. That's still my biggest concern: whether the dining public is up for it.''

Mr. Colicchio said that the success of the car service Uber, whose fee includes service, ''is making it possible at least for younger generations to swallow this.''

His flagship restaurant in Manhattan, Craft, began serving lunch last month with service included in the price; tips are strongly discouraged. Mr. Colicchio said that he planned to decide soon whether to do the same at dinner and at some of his other restaurants. ''None of the waiters has quit yet, so that's a good sign,'' he said.

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By increasing prices and ending tips, Mr. Meyer said he hoped to be able to raise pay for junior dining room managers and for cooks, dishwashers and other kitchen workers. Compensation would remain roughly the same for servers, who currently get most of their income from tips. Under federal labor laws, pooled tips can be distributed only to customer service workers who typically receive gratuities, and cannot be shared with the kitchen staff or managers.

''The gap between what the kitchen and dining room workers make has grown by leaps and bounds,'' Mr. Meyer said. During his 30 years in the business, he said, ''kitchen income has gone up no more than 25 percent. Meanwhile, dining room pay has gone up 200 percent.''

The wage gap is one of several issues cited by restaurateurs who have deleted the tip line from checks. Some believe it is unfair for servers' pay to be affected by their race and age, their customer's moods, the weather and other factors that have nothing to do with performance. A rash of class-action lawsuits over tipping irregularities, many of which have been settled for millions of dollars, is a mounting worry.

Scott Rosenberg, an owner of Sushi Yasuda in Manhattan, said in an interview in 2013 that he had eliminated tipping so his restaurant could more closely follow the customs of Japan, where tipping is rare. He said he also hoped his customers would enjoy leaving the table without having to solve a math problem.

But restaurants that pay servers a straight salary give up a sizable tax credit on tipped income. The Union Square Hospitality Group expects to lose from $1 million to $1.5 million -- ''real money,'' as Mr. Meyer puts it -- on the tax credit alone.

Drew Nieporent, who owns nine restaurants in New York City and one in London, said he doubted the average diner would accept an increase in prices that he estimated at ''20-plus percent'' to make up for the tax credit and lost tips.

''Tipping is a way of life in this country,'' he said. ''It may not be the perfect system, but it's our system. It's an American system.''

Many customers remain deeply attached to the right to reward attentive service, or to withhold that reward. And servers often say that the bonanzas they take home after busy nights far outweigh the risk of getting nothing once in a while.

In a series of meetings with servers and other staff members about the Union Square Hospitality Group's new policy, ''we got zero pushback,'' Mr. Meyer said. ''We've had lots and lots of tough questions, lots of thoughtful and provocative questions. But 100 percent of them, once they understand why, they all want to do the right thing for their team.''

CAPTION(S):

PHOTOS: Travis Pranke at the Modern in the Museum of Modern Art, one of 13 restaurants of the Union Square Hospitality Group that will end tipping. (PHOTOGRAPH BY ALEX WELSH FOR THE NEW YORK TIMES) (A24); Danny Meyer, Union Square's chief executive, at Porchlight, a new bar. The move, he said, will help lure culinary talent. (PHOTOGRAPH BY EVAN SUNG FOR THE NEW YORK TIMES) (A26)

By PETE WELLS

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Source Citation (MLA 7th Edition) Wells, Pete. "Tips Are Going Away at a Prominent Restaurant Group." New York Times 15 Oct. 2015: A24(L). The New York Times. Web. 9 Nov. 2015.

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Gale Document Number: GALE|A431602814