The Seattle steakhouse will institute a 20 percent service charge in place of gratuities starting March 21.

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Posh Seattle steakhouse El Gaucho is the latest restaurant in the city to end tipping, announcing plans Wednesday to institute a 20 percent service charge in place of gratuities starting March 21. Both the Belltown restaurant and its waterfront sister, Aqua by El Gaucho, will go tip-free, following in the footsteps of an ever-increasing number of restaurateurs such as New York’s Danny Meyer and, here in Seattle, Renee Erickson, Tom Douglas and the Huxley Wallace Collective.

Restaurateurs are taking the service-charge or service-included route to rejigger as minimum wages rise, generally pledging to keep servers at competitive compensation levels while increasing pay to the historically less-well-compensated back-of-the-house workers. The practice of tipping also has been under criticism recently for being racist, sexist and ineffective.

But El Gaucho president and COO Chad Mackay says the decision there is the product of “a number of years of thought.”

“We pay our kitchen really well,” Mackay says. “We pay them at the top of the market, and basically have since Day One … Frankly, there’s some issues out there where [other restaurants] are going to have to pay the kitchen more. Well, we have been.”

Mackay says some front-of-the-house employees were “nervous” about the industry changes and resulting compensation levels. He consulted various staff and regulars before making the move.

“I think we as an industry are way more nervous about this than most guests are,” Mackay says. “Because at the end of the day, you still have to stand behind what you do. If we mess up, it’s the whole business that messed up. And so we don’t have to penalize one person.”

If patrons report service issues, Mackay says they’ll be taken care of: “If we need to take $100 off the bill, it comes off the bill, not out of one person’s pocket.”

About a quarter of El Gaucho’s business is private dining, with service already included, so, Mackay says, “This isn’t something new to us — it’s just whether you apply it to the whole business.”

The service charge will go to servers and other front-of-the-house staff as an hourly wage plus commission on sales, with employees doing “as well or better in this model.” Additional gratuities will be allowed. “In our private-dining business, people bump [up the service charge] all the time,” Mackay notes, and the process will be similar, with checks clearly saying service included, credit-card receipts arriving already totaled and staff confirming that any extra gratuity is intentional (“which is very unheard of,” he adds).

From his research, Mackay says, “I think [in] the long run for full-service restaurants, you’re going to get a service charge … I think you have to do what you know is right in your heart, and that your guests believe in, and that your team will stand behind.

“If you do that, the critics can all come out, but if you take care of that, your business will be fine.”

Mackay’s throwing in a little perk for customers at the same time: valet service, formerly $7 to $9, will be complimentary.

Only El Gaucho Seattle and Aqua by El Gaucho are implementing the service charge at this time, though Mackay says there’s more to come on El Gaucho Tacoma and El Gaucho Portland as minimum wage changes unfold there.

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