Just read a well-written article about how some restaurants are dealing with the quickly-rising (after years of stagnation) local minimum wage, which was shared by one of my most respected restaurant accounting colleagues, Stacey Byrne.  It hit home, as we’re dealing with many of the same issues in Chicago: my small business restaurant clients are committed to living wages and benefits for their workers, as well as a safe and inclusive work space, but their margins are already so narrow, in what is a famously competitive and labor-intensive industry; also, the discrepancy between the massive amounts front-of-house are taking home and the paltry amounts back-of-house are taking home is painful — many chef-owners make substantially less than their FOH staff, or are committed to trying to even out this inequity and internal struggle. Many of them are switching to service charges instead of tipping, or re-structuring so that back-of-house workers have customer interaction, and can therefore participate in tip pooling.

Definitely worth a read: California Restaurants Add Surcharge After Minimum Wage Hike.

And for a reminder on how tipping works, an earlier blog post: Restaurant Tipping — How It Works.