A New Way For Restaurant Staff Pay At Santa Fe BK

Zagat Stories presents Restaurants 21/22, a collection of interviews with leading voices in dining, hospitality, food, tech, politics and more. Each story takes the turning of the calendar as an inflection point to consider what happened in 2021, or what’s likely to happen in 2022, in the world of restaurants and food. See all stories here. And feel free to check out last year’s collection as well.

Melissa Klein and her husband John Watterberg opened Santa Fe BK in Williamsburg as a tribute to their love for each other (they met at a now-shuttered Williamsburg spot called Santa Fe years ago) and their devotion to the food industry. After a lifetime spent both back- and front-of-house, the couple vowed to focus on the wellbeing of the staff just as much as the customers and food. Santa Fe BK employs a tipping model that relies on employees being involved in every aspect of the operation—from dishwashing to waiting tables, delivery, and more.

We know that there is a lot of iniquity in the restaurant business, which causes a lot of resentment. In a lot of places my husband and I worked at, it was about, “Let’s all be equal players and not have a divide between front- and back-of-house.” But how can you be equal players if you’re making such different salaries doing different jobs?

When the pandemic happened, we had a year to really think and talk it over, and try to figure out how to make the future better for everybody. We decided that 8% of our sales would go back to the employees, so that it will be a revenue-sharing kind of situation.

Because we are currently only operating as a takeout business, we’ve also adjusted the pay model. We have such limited staff working that we’ve been training everyone in both front-of-house and back-of-house positions, so that we are legally allowed to split all of the tips. It’s working out so well.

John and I take turns working different positions as well. We work the door, the dish station, even do some prepping and cooking. And when we work, we don’t receive any of the tips, so they get split between the rest of the staff, which is just great. Including the $18 an hour that we’re paying them, our staff is making anywhere from $20 to $30 per hour.

Once dinner service starts, and working different positions becomes less feasible, that’s when we’ll implement 8% revenue sharing for all back-of-house positions. The front of house will be paid $12 an hour and be part of the tip pool, while the back of house will receive $18 and 8% of sales. Anyone who receives a salary will not be part of any tip pool or the 8% share. But depending on our success, we’ll be open to bonuses for those employees too.

I think the staff loves it. The money is great, and they get to work in new positions. Everyone gets how everyone else’s day goes, because we’ve all been there. I think that does a lot for morale. And everyone is invested in it being busy, so when we are, it creates a kind of buzzy excitement in the air that’s super fun to work with. Some people have different levels of comfort interacting with guests, and that’s been an issue, so we’ve been finding ways around it. Certain staff members prefer to do less interactive front-of-house duties, like prepping the to-go station and bagging up orders for customers. We want to keep everyone happy by making sure they’re getting paid well, but also don’t want anyone to feel uncomfortable with what’s being asked of them.

Because it’s taking so long to get our liquor license and therefore fully open, we have more staff than we have shifts right now. We hired for what we thought was going to be a September or October opening. Most of our staff wants to work here full time, but we simply do not have enough shifts for everyone. So far, we’ve been very fortunate that they’re giving us the grace of their understanding and have been sticking with us while we’re in liquor limbo.

It’s a challenge to keep the faith sometimes, but we’re trying to focus on the things within our control. We always knew we didn’t want to open until we got our liquor license because our margarita program is integral to the cuisine. Plus our whole front room is one giant bar.

I think customers know that this industry is tough, and they appreciate that we’re trying to bring something new to the table, both in terms of our food and our restructuring of the typical restaurant payment models. I’m surprised by the number of people who mention it when they order at the window. We get a lot of “we love what you guys are trying to do here” and “we saw your Instagram post about wages, right on!”

I don’t think this system is necessarily going to be attainable across the industry in this very specific way. We crunched the numbers. We are not serving scallops and truffles. We are keeping our food costs very low, modest, accessible, and approachable so we have more money to spend on the people who help make our dreams come true.

If we just eliminated tipping and paid our staff more, we would have to charge people an arm and a leg for everything they order, and I don’t think it’s fair to pass that cost onto customers when they are not used to that price model. People come to enjoy the food and know they don’t have to pay that much money.

The New York City policy of not allowing back-of-house employees to accept tips should be abolished. I think that if you talk to your day-to-day customer and ask them if they would be okay with their tip money going to everybody who worked so hard to bring them that meal and lovely service, they would absolutely want that to happen. It’s an antiquated rule that needs to change.

We have to come up with new ways to make the restaurant industry work. This is a good era to do that because everything is coming back new and different, and people are able to try diverse approaches. With enough creativity, we will be able to come up with something that will work for everybody.

If we weren’t hopeful about the future, we wouldn’t be doing this. Especially with the response we have gotten from the neighborhood and the people that frequent the establishment—people want this to work. We are going to collectively figure out a way to make it work and make it fair for people.