KNEAD Hospitality + Design Responds to Initiative 82 Service Fees

From an email:

“To our loyal, valued guests and members of the DC dining community:

KNEAD Hospitality + Design owns and operates eight full-service restaurants in Washington, DC. At KNEAD, taking care of our teammates and guests is, and always has been, the top priority.

Recently, DC voters passed Initiative 82, which abolishes the tipped minimum wage over the next four years. If you’re not familiar with the tipped minimum wage, it allows restaurants to pay tipped staff below the regular minimum wage as long as they ensure (inclusive of tips) that their employees receive at least the minimum wage. That being said, directly tipped staff in KNEAD restaurants average $30-$60 per hour (depending on location), well above minimum wage.

Among other requirements, Initiative 82 will incrementally increase the tipped minimum wage until it no longer exists (in 2027). The first major increase occurred on July 1st, raising the tipped minimum wage to $8/hour from $6/hour, a 33% increase in direct labor costs for tipped teammates. After analyzing the effects of this increase, which impacts the majority of our employees, and considering the slim profit margins of a restaurant (which typically ranges between 5-10%), we felt that instituting a 3.5% fee was the best solution for all stakeholders.

Because transparency is always the best course of action, we clearly and openly communicated this change on our menus to ensure guests were aware of this fee prior to beginning their dining experience. In addition, our team is trained to help answer questions as they arise.

We hope you will continue to enjoy our restaurants with the understanding that we are doing all we can to ensure the same great experience you would expect in a KNEAD restaurant despite big changes to the cost structure associated with running a first-class restaurant in DC.
Sincerely,

The KNEAD Team”