Tipping Is Bad, But ‘No Tips’ Might Be Worse

Sarah Jaffe

The owners of Chez Panisse in the San Francisco Bay Area have added an automatic surcharge to bills in lieu of tips. (Ulterior Epicure / Flickr / Creative Commons)

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Tipping is falling out of fashion — at least if you believe a new article in the New York Times. According to Pete Wells of the paper’s Dining and Wine section, the practice is irrational, outdated, ineffective, confusing, prone to abuse and sometimes discriminatory.” And some fancy restaurants, it seems, are looking to get rid of it.

We’ve covered the many, many problems with tipping here at Working In These Times, from the ease (and creativity) of wage theft to the low pay rates it enables. Recently, I wrote about the fight launched by the Restaurant Opportunities Center-New York (ROC-NY) to raise the minimum wage for tipped workers to the same level as the regular state minimum wage, which would allow tipped employees to be able to rely on at least a guaranteed income when they go into work. But those of us who support workers in the restaurant industry face a complicated conundrum: Though we universally acknowledge tipping to be problematic, the odds of restaurants paying servers a comparable wage if tips are eliminated seem pretty slim without some major changes in law and practice.

I’m hardly a defender of the tipping system — as a former server, I know all too well the abuses and uncertainty it leaves servers facing. But it’s worth noting that if high-end restaurants and chefs are leading the charge against tipping, it may not be because they have their workers’ best interests at heart. In her book Behind the Kitchen Door, Saru Jayaraman of ROC United notes that only 20 percent of restaurant jobs pay a living wage, and those jobs are overwhelmingly concentrated in fine dining. That means that the few servers who do make decent money in the restaurant will most likely see a pay cut, not a raise, if their restaurant moves away from tipping and toward paying a salary.

Chef Tom Colicchio, who told the Times that he’s thinking about doing away with tipping at one of his New York restaurants, said he wanted to pay servers an hourly rate that would be consistent with what they make now.” We assume that means what they make with tips, but we don’t know what their new hourly rate will actually be. Colicchio noted that he’s not sure his staff will like the new system — suggesting that he’s aware that it’ll be hard for the restaurant to cover the typical tipped income of a server at a fine dining establishment, so their pay may well be lower than it would have been with tips.

Other chefs and owners have already begun substituting a service charge for the expected tips, according to the Times. Rather than most restaurants’ current system of paying kitchen staff out of the general income and then expecting tips to cover almost all servers’ wages, these restaurants split an 18 percent automatically added fee among all of their employees. But presuming that most servers make between 15 and 20 percent in tips per table and share only a small percentage of that with bussers, food runners and bartenders, dividing an 18 percent service charge” among the whole staff will lower the servers’ income — and there’s no mention of whether their hourly rate will be increased in turn to that of the cooks or dishwashers, who legally have to make at least the federal or state minimum wage.

Meanwhile, these owners express concern that line cooks and dishwashers haven’t seen their wages increase as a result of this system, as though they aren’t the ones who set those wage rates for back-of-the-house workers. Instead, they’re effectively playing off one group of exploited workers against another.

And as Wells notes, restaurants depend on tips to make their payrolls. The temptation to treat that money as general revenue can be hard for some to resist.” Treating tip money as general revenue is illegal under current law — we call that wage theft. Restaurants are allowed to pay a sub-minimum wage (federally just $2.13 an hour and higher in some states) to tipped employees because tips make up the difference. It’s not the restaurant’s money to take, in other words, unlike the money charged for the meal. Yet restaurants have been caught repeatedly taking cuts of servers’ tips. Wells acknowledges that lawsuits over wage theft are part of the reason that some of these restaurants are moving away from tipping. It seems that temptation is indeed too hard to overcome. 

One restaurant owner complained to the Times that as you grow to a certain size these days, and you’re high profile, everyone starts examining what you do,” and obeying the letter of the law for tipped employees means having to focus on nitpicky things like Did they get paid overtime for their sidework?” (Sidework, for those of you who haven’t worked in restaurants, is the work servers do, often before or after their shift, to set up or break down the dining room and prepare for the next meal. Depending on the restaurant, it can be as simple as rolling silverware or as onerous as scrubbing walls and scraping gum off the undersides of tables — two things that I personally had to do as a waitress making $2.13 an hour when not being tipped.)

Many questions remain. Will restaurants that voluntarily forego tipping still manage to dodge minimum wage laws? What are these restaurants that don’t accept tips actually paying servers, and how are they calculating whether those wages are consistent with what servers made before? What happens to servers at less fancy restaurants, where diners, as Wells mentions, are less likely to accept service charges or price increases, and where, as Jayaraman has pointed out, servers barely scrape by anyway?

Eliminating tipping without a guaranteed living wage for restaurant workers won’t be progress. Indeed, if this change comes from high-end restaurants on down, it may well end up taking money out of workers’ pockets rather than helping them, as we’ll have to take the bosses’ word for it that they’re compensating staff fairly when the law only requires the bare minimum. We need better wage and hour protections for tipped workers, including a long-overdue increase in the tipped minimum wage. If tipping is going to be eliminated, it needs to be done in a way that doesn’t slash the income of hundreds of workers in the name of fairness.”

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Sarah Jaffe is a Type Media Center Fellow, co-host (with Michelle Chen) of Dissent magazine’s Belabored podcast, and a columnist at The New Republic and New Labor Forum. She was formerly a staff writer at In These Times and the labor editor at AlterNet. Her previous book is Necessary Trouble: Americans in Revolt, which Robin D.G. Kelley called The most compelling social and political portrait of our age.” You can follow her on Twitter @sarahljaffe.

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