INDIAN ROCKS BEACH, Fla. — The Original Crabby Bill's in Indian Rocks Beach has implemented a 10% service fee on every check.
The new service charge went into effect on Monday.
A sign at every table notifies customers about the change. It reads, "A 10% service fee is added to your check, which is used to help pay for our team member's hourly wages, insurance, and benefits. Our team members receive an hourly wage above the state-mandated minimum wage for all positions, including tipped team members."
We spoke to repeat customers like Bobby Hopkins, who is visiting from Ohio.
"I thought it was totally fine, honestly. The servers are always great here, so we have no problem giving them our money as well as the restaurant because the food is great," he said.
"I love it. I think that we need to figure out how to pay people a livable wage. They have got to be able to support themselves and their families, and we, as customers, need to understand that and be willing to do what we need to do to help them do that," said Vicki Burton, a customer visiting from Mississippi.
A customer's check will also reflect suggested additional tip amounts of 8%, 10%, and 12%, which are not required. The server or bartender keeps 100% of the additional tip.
Matthew Loder, CEO of Crabby Bill's Seafood, said the new service fee allows him to keep up with the rising cost of business.
"So it prevents us from having to short portions. We don’t have to keep raising prices because I can only pay so much, my guest can only pay so much so we’re very sensitive to that," said Loder.
Loder said his servers make $12 an hour plus any additional tips.
"It's very much a concern for us that our people are making the same or better. We certainly don’t want our team to make less money, but we wanted to come up with a way that we could go ahead and make sure we could afford to pay them and keep the lights running and everything else," said Loder.
In January, ABC Action News reported on other Tampa Bay restaurants implementing a similar model.
Southern Fresh on 3rd Avenue North in Safety Harbor adds a 20% service charge to every check for customers who dine at the restaurant. The fee does not apply to takeout orders. Servers receive 15%, while other support staff like bartenders and runners share 5%.
Related Story: Florida restaurant implemented 20% service charge on each check
"At the end of the day, it lets everyone work based on commission rather than hourly and tips," said Aaron Stewart, owner of Southern Fresh.
Faizan Ali, an associate professor at USF's Muma College of Business, said the restaurant's decision to adopt a service charge and commission compensation model reflects a newer trend in the service industry.
He added in an email, "The basic idea is to address wage disparities between front-of-house and back-of-house staff, providing a more equitable distribution of income. The move towards predictable and stable income for restaurant staff aligns with ongoing discussions about fair wages and worker compensation in the industry. In my opinion, while this approach offers potential benefits, effective communication with customers is very important to navigate potential resistance and ensure an understanding of the new compensation structure."
Ali added monitoring customer feedback, staff satisfaction, and overall business performance will be important in evaluating the success of this innovative model.
For more information on the service fee at Crabby Bill's, visit here.
