Tipping in Restaurants Reaches a Tipping Point

Food Policy

Next time you hear a waiter or waitress complain about his or her tips, remember that the United States and Canada are home to the biggest tippers in the world (but maybe don't tell them that fact, 'cause it probably won't help). In many other countries, service is included in the bill, and tipping is reserved for truly exceptional service. Also, people in the service industry in most other countries make higher wages than waiters in the United States, who rely on tips to bring their salaries up to minimum wage.

Lately, though, there's been a lot of talk about abolishing tipping in America altogether. A Slate article from last July called tipping an "abomination." The author, Brian Palmer, wrote: "Tipping is a repugnant custom. It's bad for consumers and terrible for workers. It perpetuates racism. Tipping isn't even good for restaurants, because the legal morass surrounding gratuities results in scores of expensive lawsuits."

He brings up some good points about the practice. So good, in fact, that others are starting to echo his concerns. In September, Pete Wells, restaurant critic for The New York Times, highlighted a number of restaurants that are moving away from tipping and toward surcharges or higher-priced menu items. The money made from these practices would then go toward paying servers a fair wage — as in, more than $2.13 an hour, the amount many servers make before their "tip credit."

But what about our right as consumers to let service staff know we're pissed by leaving a small tip? How are we supposed to express gratitude if not monetarily? And how are misguided teenagers going to elicit donations after they're stiffed for being gay (but not really)?

As tipping has risen to 20 percent in the past few decades, a greater income division has emerged between the front of the house and the kitchen staff. Some restaurants note that all tips are to be split among all employees, but in general, waiters are tipped, while line cooks, dishwashers and janitorial staff are not.

An issue arises, however, when restaurant managers ask servers to pool tips to share among the staff: Servers have been suing restaurants for sharing their hard-earned tips with ineligible staff (i.e., anyone who makes at least minimum wage before tips) and for being forced to clean bathrooms or fold napkins with their tip-able time (since obviously those toilets aren't congratulating their fine work). Most notably, 5,500 bartenders and servers sued Applebee's, claiming that they should be paid at least minimum wage for hours they spent performing non-tippable duties.

The only way around this is to charge a service fee up front, but this eliminates the tax credit on income from tips. Two weeks ago, the IRS added to the issue by enacting a ruling that an automatic gratuity for large parties must be considered as a service charge, not a tip. This went into effect January 1, which means that restaurants will either have to add the gratuities to servers' taxable wages or do away with them altogether. Neither option is great for the restaurant or the servers, but the group at your next birthday party will be pleased.

So why the recent re-examination of tipping, anyway? Well, tipping isn't a longstanding American custom. In fact, we picked it up from the Europeans when we started going on fancy vacations to Paris and Rome in the 1800s. Tipping in the United States initially faced a lot of backlash from patrons, who felt it was akin to bribing staff for decent service. Eventually, as we all know, Americans came around. And now we tip, on average, 20 percent of the post-tax total.

Recently, a push has been made to eliminate the tip credit, ensuring that all employees make at least minimum wage and freeing diners from the obligation to tip. Because when you think about it, do you most often tip for stellar service, or because you feel you have to? How often do you struggle to give your server a "fair" tip when you don't really want to?

The recent ruling by the IRS regarding gratuities aside, service charges seem to be the best route for many restaurants. Or, to eliminate any confusion regarding who's reaping the rewards of a service charge, an "administrative charge" or a "dining fee." Just as with tipping, diners would eventually become accustomed to seeing the charge on their receipts.

Service charges still don't protect restaurants from lawsuits, though, if servers continue to get tips and lose tips while they aren't actively waiting tables. Only a change in legislation regarding these murky charges can do that, and there hasn't been much headway in that department, in spite of encouragement from prominent restaurateurs, including David Chang and Alice Waters.

And here in Houston? Well, it's same-old, same-old. Many (though not all) servers are paid minimum wage, and service isn't included on tabs for small parties. We're expected to tip, though most of us don't even think about it anymore unless the service was truly terrible.

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Kaitlin Steinberg