Service charge

Portland’s Ruby’s West End restaurant cuts costs, adds service charge to pay employees more than minimum wage

The combination of cutting costs and adding service charges allows him to pay all staff at least $ 20 an hour plus tips.

PORTLAND, Maine – A Portland restaurant is trying to hold back workers during the pandemic by paying each employee more than $ 20 an hour plus tips.

Corrinna Stum opened Ruby’s West End in April 2021 with her husband, Matt.

For the first six months, Corrinna was in the kitchen. She said she had just hired the first kitchen staff in the past four weeks. Like other restaurateurs, she struggled to hire during the pandemic.

In order to attract and retain staff, they have taken a unique approach to paying more. They’ve cut back on some traditional restaurant costs, using donated table linens and washing them at the Soap Bubble, the laundromat next door to save money on a laundry service.

They also use a paper spreadsheet to manage reservations, instead of paying for a third-party website like OpenTable. Paper menus are replaced by QR codes that people scan with their phones.

She said the measures took some getting used to, but did not hurt operations or incur additional costs.

“We replaced those expenses in that category and put them in our labor category,” Stum said.

Stum has, however, added a cost to customers: a 20% service charge.

The combination of cutting costs and adding service charges allows him to pay all staff, front and back of the house, the same salary of at least $ 20 from the hour plus tips.

“It created a fair environment,” Stum said. “That’s what you should do.”

The minimum wage in Portland is $ 12.15 an hour, but service workers who receive more than $ 30 per month in tips, such as restaurant workers, may be paid a “less than minimum wage” of $ 6. $ 08 per hour. If a service employee’s direct wages and total tips do not equal or exceed $ 12.15 per hour, the employer must pay the service employee the difference.

“When I’m taken care of by my employer and I’m able to take care of myself and not worry every week about whether I’m going to be able to pay my rent in Portland, I’m able to take care of the people who I care, “said Olivia Shipsey, the morning restaurant manager.” It’s very easy to put your heart into it. “

“This return on investment is just huge,” Stum said. “We can all use that same creative energy to find a solution for pay and wage reform whether or not the policy is put in place. I think anyone can use this model in a tip structure and get away from it all. get rid of this lower than minimum wage, pay them minimum wage with additional tips. “

Stum said the benefit is symbiotic: staff don’t need to rely on tips or a second job to pay their bills, and staff stay with her. She said that in her more than 15 years of working in the restaurant industry, none of her employers have taken an “employees first” approach.

“After being in this industry for so long and seeing how many people have been negatively affected by not earning enough to live their lives, the joy that comes out of this restaurant is pretty cool,” said Stum.

“Kindness breeds kindness, and I think Matt and Corrinna have invested in a good idea with a good heart and I hope they see great success with it, and I think they will,” Shipsey said.

Stum said the service charge can be waived, but most people end up leaving bigger tips instead.

Watch Corrinna Stum’s full interview below: