Service Charge - how this model works for Musang
For many years, restaurants have operated in ways that benefited the house with little to no regard for the staff that "keeps the business running." Over the last several years, we've seen significant increases in inflation at a whopping average of 7-9% in 2022 alone. Additionally, Washington state, Federal, and city laws have altered policies related to minimum wage, sick leave, and high interest rate benefits at the expense of workers.
As Musang evolves in the landscape of operations as a small business, we have decided to commit to a service charge model and offer complete transparency to our guests. We also want to ensure that we are providing an exceptional experience while holding space to invest in our future.
As of January 2023, Musang has now moved to a 22% service charge.
Many businesses already practice this model and here at Musang, 16% of the 22% will go directly back into the hands of both our Front of House and Back of House team members. The remaining 6% will go directly to the employees’ health and benefits.
Here are a glossary of terms, FAQ and resources to better understand this new model:
Glossary of Terms:
Service Charge: A service charge is a set percentage added to every guest check. The total amount of the service charge is the property of the restaurant which helps pay for labor and benefits for all employees.
Gratuity: A gratuity, or tip, is money paid for service—in addition to the check. Tips are usually shared between the server, bar and support staff, including bussers and hosts. At Musang, all gratuity is shared across both the Front and Back of House.
Tip-Pooling: A valid tip pooling practice involves the collection of all tips to be put into one large “pool.” Tips are then redistributed among a larger group of employees. In theory, tip pooling ensures that all staff members are fairly compensated for their work. Only customarily tipped employees can be part of the pool. Employees can’t be required to share their tips with employees who don’t usually receive their own tips, like dishwashers or cooks.
Frequently Asked Questions:
In a standard tipping model, do servers keep all of their tips?
No, there has always been a practice of tip pooling where the tip amount is distributed between the server, bar staff, and support staff including bussers and hosts.
How are employees compensated in a service charge model?
Every team member is paid an hourly wage with the addition of tips. Some restaurants, including Musang, allow the ability for guests to leave an additional gratuity which goes directly back to the team based on hours worked. We continue to practice the sharing of tips across both Front and Back of Houses to be as equitable as possible. This includes, line cooks, prep cooks, and our dishwashers.
Are service charges considered wages, tips, or a benefit for employees?
Legally, a service charge is the property of the restaurant, and the restaurant then pays hourly rates, commissions, and revenue share to employees, which are subject to wage-related taxes and are reported by the employer to the IRS.
What are the benefits of a service charge model?
Our team is made up of professionals who have made Hospitality & Culinary Arts their career—they have families, are homeowners, are active members of their community and have goals to open up small businesses that will diversify and honor the community they advocate for. The service charge model—combined with the ability for guests to leave additional gratuity for excellent service—ensures sustainability for our team. This allows us to center our worth while investing into ourselves in an industry with notoriously high turnover rates and a lack of resources for health and wellness.
If you have questions or comments about your experience, please request to speak with the Manager or reach out to us at info@musangseattle.com