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Illustration: Brendan Lynch/Axios

Diners returning to their favorite restaurants after the long COVID winter are noticing a new item on the menu: a service charge with a note about a no-tipping or tipping-not-expected policy.

Why it's happening now: It's essentially a reset for a lot of eateries across the area as they spin back up and try to find new workers.

  • Charlie Broder, the second-generation co-owner of Broder's Restaurants in Southwest Minneapolis, said the pandemic disruption was a "watershed moment" for restaurants to change their model.

How it works: Several Minneapolis restaurants have instituted service fees of 15% to 21% that they say go toward their employees' wages and benefits.

  • Broder's, for example, will use the fees to pay all employees at least $16 an hour and then split 5% of its revenue among all employees, said Broder. Diners can still tip on top of the 15% "equity and service fee."
  • "We're trying to create a compensation structure that looks different than it did before the pandemic ... and strive for pay equity between front-of-house and back-of-house service members," Broder told Nick.
  • Among other restaurants instituting such fees: Hola Arepa, Hai Hai, Tilia, Sea Salt Eatery, Surly and Alma. Revival will do no tipping at its new Smokes Meats restaurant in Minneapolis.

Yes, but: No-tipping restaurants are still relatively new, and it remains to be seen what this will do to servers' wages.

  • Since not all restaurants are going tip-free and there's an apparen labor shortage, servers who believe they can make more in a tipped establishment could create movement in the industry.

Between the lines: Most of the restaurants adding service charges are in Minneapolis, where the minimum wage is building toward $15 an hour.

  • Some owners have no choice but to increase wages, and a service fee is one way to handle that added cost.

The other side: While a service fee may not make much of a difference to customers who already tipped 20%, Wade Luneburg, political director of the UNITE Here Local 17 union, argued diners should know where that money goes.

  • "Our concern is around transparency, not just for workers but also for consumers," he said. "If you are a consumer, this is redistributing the gratuity."
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Go deeper

Aug 6, 2021 - Axios Twin Cities

It's wait-and-see for Twin Cities office workers

Wells Fargo and U.S. Bank are delaying their return to office dates. Photo: AaronP/Bauer-Griffin/GC Images

Twin Cities companies used pencil when they circled Sept. 7 as their return-to-office date.

Driving the news: With the Delta variant spreading, two of the metro’s largest employers of office workers — U.S. Bank and Wells Fargo — delayed their decisions to call back most of their employees in September.

  • Eagan-based Prime Therapeutics had been planning to bring workers back to the office Aug. 2, but has pushed that date to Sept. 7, said company spokeswoman Karen Lyons.

Why it matters: Retailers, restaurants and hotels that thrive off downtown offices have been eagerly awaiting workers' return after 17 months without much commerce.

  • But going back into the office can also be a major lift for some employees, including those who have to arrange care for children or other family members.
24 mins ago - World

In reversal, Pentagon now says drone strike killed 10 Afghan civilians

Caskets for the dead are carried towards the gravesite as relatives and friends attend a mass funeral for members of a family that is said to have been killed in a U.S. drone airstrike, in Kabul on Aug. 30. Photo: Marcus Yam/Los Angeles Times via Getty Images

A U.S. drone strike launched on Aug. 29 killed 10 civilians in Afghanistan, including seven children, rather than the Islamic State extremists the Biden administration claimed it targeted, the Pentagon said Friday.

Why it matters: U.S. Central Command said at the time that officials "know" the drone strike "disrupted an imminent ISIS-K threat" to Kabul's airport, and that they were "confident we successfully hit the target."

UN warns of "catastrophic" climate change failure without more emissions cuts

UN Secretary-General António Guterres at a news conference. Photo: Fabrice Coffrini/AFP

A United Nations report released Friday warned that the planet will likely warm by more than 2.7 degrees Celsius by the end of the century unless governments take extra steps to curb greenhouse gas emissions.

Why it matters: The report, released just months ahead of November's UN Climate Summit, highlights the growing pressure on global leaders to crack down on emissions to avert the worst effects of climate change.