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Claire Sprouse On Making Hunky Dory A No-Tip Zone

Claire Sprouse has worked in bars in Houston and San Francisco, where she managed operation and cocktail development for the Futurebars group. In 2019, she opened her own all-day café and bar, Hunky Dory, in the Crown Heights neighborhood of Brooklyn. When Hunky Dory reopened after a four-month pandemic lockdown closure, she decided to eliminate tipping.

As a person who has worked for tips for most of my adult life, I have always been thinking about equity and trying to empathize with wage disparity, but it’s taken me a really long time to come to this conclusion as a front-of-house person. Which isn’t necessarily an easy thing to admit for me—I don’t want to say I identify as “woke” but I do try to think about these things very intentionally. At some point, you have to ask yourself—if asking for more equity in the space is something that is challenging to you, that’s usually because it’s requiring you as a person to give up something. It took me many years to get to this place and to examine my own privilege.

If there was ever a time to do this pivot, it’s the middle of a pandemic. But we’re also in the middle of a huge civil rights movement. When we talk about inequities and how mostly brown and Black people are affected by these wage disparities, or we talk about how these systems that uphold white supremacist values are rooted in histories of slavery, that’s a conversation we probably would have had a lot harder time with six months ago. People are more receptive and open, and they appreciate the context. And they thank us for being transparent about it too, which makes me feel even more empowered by the stance I’ve taken. The hospitality industry often underestimates what customers want in their dining experience.

In the United States, tipping began around the era of formerly enslaved people—Black people—who were becoming employed as newly free people. Their employers were saying, “Well, we don’t want to pay you the same wages as these other employees, so we’ll institute this policy of a tip, and you have to earn your pay at the whim of whoever it is that you’re serving.” Their pay was whatever arbitrary notion someone else had of their worth, and ultimately that was rooted in the fact that these Black people had very little worth to their employers.

And yes, we can say, well that was a long time ago. But even today, most of the people that are tipped employees are brown and Black people, or women, or people that are non-gender conforming. They’re the people that are already marginalized, but they’re also the people that are most at risk of inherent biases. And so to put them at the forefront of an institution that’s based on whatever a stranger arbitrarily deems their worth is so absurd to me.

Photo: Courtesy Claire Sprouse.

And when someone is being harassed, you’re asking people to choose between confronting an abusive customer, or a customer who is overstepping boundaries, and making money to pay their bills. And that is a very fucked up power dynamic. You’re tying people and their humanity to their paycheck. It takes the people that are most at risk for dangerous behavior and inherent biases, and it strips them of the ability to stand up to those things. There’s a high risk for employees to be in really violent, contentious situations and not have any agency to do anything about it.

I get that our industry already operates on razor-thin margins, but if we as an industry can only operate and be sustainable and successful because we are not being accountable to the labor and the worth of our employees, then maybe I don’t deserve to own a restaurant, and maybe a lot of other people don’t deserve to be in business. Or maybe we need to all adjust our prices instead of doing this race to the bottom so that we out-compete each other. We talk about systemic racism, and this is an action in a very real, tangible way, just as much as a lot of the other things that people are out walking the streets protesting about. This is it.

I’ve worked in three very different systems, having lived in three very different regulated states. In Houston, minimum wage for tipped employees was like $2 an hour. And the minimum wage there in general is just lower. In San Francisco, everyone gets paid the same wage, so there’s no such thing as a tip credit—if you’re getting tips, your employer is allowed to pay you less money, and that’s what they do in Houston and a lot of other states.

In New York, our tip credit wage is $10 an hour, and we’re not allowed to share tips with the back of the house, which we could do in San Francisco. Back-of-house staff get paid pretty close to minimum wage, which is $15 an hour, so they’re getting $15 or maybe $18 if they’re lucky. Front-of-house people can get $30 to $40 to $50 an hour in tips, on top of their minimum wage. New York is one of the few states that has very strict regulations on who can participate in receiving tips. And you’re not allowed to divert any of that money to anybody that is not directly guest-facing. It’s very controversial and it’s being scrutinized very heavily right now as we all are trying to reimagine what the industry can look like, and what is a sustainable way forward.

Photo: Courtesy Claire Sprouse.

I worked at a place in San Francisco that, when we opened, was gratuity-included, and I helped implement a tip sharing-situation between the front of house and back of house. I’ve always been really friendly with the people that work in the kitchens. When you are face-to-face and you have human connections with people that are making oftentimes a fraction of what you’re making, and doing just as much or even harder labor, it’s really hard to sit back and ignore that.

I opened Hunky Dory with these goals and ideals of being a really active and equitable workplace, being active in our community and not just a place where transactions happen—a place where we have a platform and we use it to do good. Especially considering that I’m not a native of New York, and Hunky Dory’s role and my role in contributing to the gentrification of our neighborhood. In the past, I approached those things from a bigger platform of sustainability, which I focused on for the last 10 years. I would say that my idea of sustainability extends to people, beyond how the people producing our products are affected by the products that we sell, but also within our staff.

But as a small business that opened with very little money, I didn’t have the resources to offer insurance or to pay really high wages—we have very low price points. That’s a long-term goal. The ultimate goal was to have no tipping involved in the system at all. But I thought that the path to get there was going to be really long and really hard.

It was really just about reevaluating everything. We’re an all-day place, 8am to 2am. We had these very big menus. I just took a step back and was like, Okay, I’ve always said that I’ve believed in no tipping. But right now, we’re in this moment where literally everything is different. I just took out all the booths of my dining room, and I’m opening up a bookstore. We knocked out a window in the front of our building to order through, and we’re serving in takeaway boxes. We’re hosting pop-ups. Everything is just so different.

Photo: Claire Sprouse.

All these pivots that we’re making—they’re all kind of structural and tied to the question of how do we retain our place in capitalism as small business owners? How do we hold on to our leases? But none of that seemed worker-focused and centering our employees.

So I started this project with a few other owners, commiserating and plotting on how we could support our staff after letting all of them go. And that spiraled into something more formal that now lives on a website. It’s all very worker-centered, trying to raise awareness and address the need for employers to take responsibility. Owners should be accountable for the ongoing support of our employees during this crisis, and that should also inform the work that we do as we start to reopen and rebuild our industry.

With that mission in mind, it just felt like the right time to say, “Maybe these things that I always thought had to wait for policy change or for greater industry acceptance, or whatever—maybe this is the time to do it.” And so we did. I do acknowledge I have the privilege of being a sole owner and sole decision-maker in my business. I’m very lucky to be able to make a shift like this quickly.

Anytime you open a business, especially a restaurant, you have to base your labor off of projected sales, and so I crunched the numbers on what I thought we could sell and what we could sustain as far as employment. I figured out we could bring back 50 percent of our staff, which is six people right now. And then I was like, can I bring those people back in a way that eliminates tipping and closes the wage gap without losing anybody? And can we do it within the numbers that I’ve already projected?

Photo: Courtesy Claire Sprouse.

We made it work, and that really just meant doing a lot of hard Excel formulas, which I’m weirdly good at. We looked at what our cost would be, what our prices are under normal circumstances, and then we factored in a 20 percent gratuity plus a little bit more considering payroll costs, and then we made it sales-tax inclusive to make the menu pricing straightforward. It was as simple as that. We ended up raising the prices about 20-25 percent. So now we have a $20 dollar chicken sandwich, which definitely at first glance looks a little high. It was $15 before.

The big risk is that we’re guaranteeing our employees’ wages instead of allowing our employees’ wages to be dictated by how busy we are. There’s a lot of risk involved with that, especially right now in these uncertain times. The main goal is to just meet our numbers. As long as we do that, then we’ll be only bleeding out just slightly, as opposed to a full bloodletting. That was going to happen tipping or no tipping.

We pay a lot in rent, and the type of business we’re allowed to do right now is only going to be sustainable for a certain amount of time. And part of it was like, well, if a pandemic’s going to take my business down, then I’m going to do it the way I want to do it, in the way that I think upholds the dignity of my staff.

I’m grateful that people had done it before me—Amanda Cohen at Dirty Candy has been no-tipping for a very long time, and I know that Danny Meyer’s group started to do it a few years ago, and Andrew Tarlow’s did it as well. I commend all of those efforts, as they certainly laid down some of the groundwork for us. But when Danny Meyer announced he was discontinuing his no-tipping model, I was pretty disappointed. I know he had problems with the execution of it—he lost a lot of staff because the front of house makes less money.

When it comes to staff leaving because they’re not making the money they did with tips, Amanda Cohen said, “You’ll find better staff—a staff that upholds your values because they share your values.”

I read that Danny Meyer didn’t want to deny his front of house the ability to make more money from generous diners. And I get that, and we address that by asking people who do want to tip more to just contribute to our staff GoFundMe, which also benefits staff that we haven’t hired back yet. It just sounded like he couldn’t guarantee those wages in this climate. And I get it, to some degree, because if he does and then they close, all these people are out of their jobs.

I know those rents are high at Meyer’s restaurants, but I also don’t doubt that there’s a lot of money in the reserves somewhere. I just felt like it was a copout, and it was just him saying, “I’m going to take the burden of this ownership, this risk I took on as an owner, and all the things I’ve accumulated as an owner, and I’m going to make my employees—the lowest stakeholders in this organization—I’m going to have them carry some of that risk.” And that just doesn’t sit right with me.

My front-of-house staff is making about the same money that they made before, but they have to work more hours to get there, just like the back-of-house staff. And they were all okay with that. When I outlined it, I was like, you know so-and-so on the line has been making $35,000 a year working 44 to 45 hours a week, and you’re making $50,000 working 32 hours a week. So, how can you sit back and feel good about that, especially right now? And they agreed, so I was lucky.

I don’t mean to say that front-of-house people are selfish and just money-grabbing at the expense of others, but there has to be some sort of moving forward when we address things like anti-racism and reparations. We’re all going to have to think about what it means to ultimately relinquish power in whatever form, whether it’s actual power or leadership or ownership over something, and even wages in certain instances. We preach equity, but you can’t have equity without some people giving up something.