Should We Stop Tipping?

May 10, 2016

Could salaries or set service charges be the solution to the restaurant wage gap?

By 
Brooke Jackson-Glidden
Should We Stop Tipping? | WGBH | Craving Boston

When I go out to eat, my least favorite part of the meal comes after the digestif: a combination of my two least favorite things, math and guilt. Figuring out a fair tip always gnaws at my care-about-the-worker gene, as a former pizza slinger and walking canapé tray. But should it be the responsibility of the diner to ensure your waiter gets paid? According to some restaurant workers and activists, not necessarily.

“Restaurant work is the only profession where customers can decide whether or not the employees earn a living wage,” says Alex Galimberti of Restaurant Opportunity Centers United (ROC),  an advocacy group for restaurant workers. “That needs to change.”

So do we need to ditch the tip? Not everyone agrees. The tip adds a tough wage gap that fluctuates depending on where a person works, and in which position.

When the waiters make more

For fine dining employees, the tip favors the waiters: The dishwashers and line cooks don’t get the benefit of tips, so many people who work in kitchens for years will only scrape away minimum wage after notoriously long and exhausting dinner shifts. Expensive menu items lead to hefty gratuity, so a server could come home with double or triple the paycheck of the guy peeling potatoes in the back.

According to Massachusetts Restaurant Association CEO and President Bob Luz, these cases are exaggerated and unfairly represent the wages of waitstaff. In his eyes, restaurateurs should focus on supporting the dishwashers who are unable to earn tips. Unfortunately, coming up with a model that keeps costs low is a challenge. That’s why he opposes raising tipped employee rates, and instituting hospitality administration fees — a small portion of a bill that goes to the chefs and clean-up crew.

“Restaurateurs resist menu price increases as much as they possibly can,” Luz says. “Every time a restaurant raises restaurant prices, there’s a subsequent drop in guest numbers. You lose guests. So restaurateurs want to figure out ways to avoid raising menu prices, but still cover the cost of doing business. If you raise menu prices, they cover increased menu costs, you’re again rewarding the highest paid employees in the restaurant.”

A solution: Restaurateurs David Doyle, Maricely Perez-Alers, and Keith Harmon (behind Jamaica Plain favorites Tres Gatos and Centre Street Cafe) tried to address their wage gap with a new business model that gives service staff the benefit of tips, while compensating the back of house with a hospitality administration fee. At restaurants like Tres Gatos, even 3 percent of a bill makes a huge difference in that wage gap; line cooks and dishwashers can watch their income increase with the rising cost of food or success of the restaurant.

“Kitchen staff aren’t supported in the way they deserve to be supported,” says Tres Gatos General Manager Yuri Bredbeck, 26, of Jamaica Plain. “As prices fluctuate, 3 percent admin fees allow natural increases and decreases of salary based on success, in a way a flat rate does not. Also, there’s no salary decrease for service staff, and it’s really just cents on every dollar so customers don’t seem to mind.”

But what if the waiter isn’t reeling in those tips? Then, a server might not even make minimum wage. Suddenly, the measly $10 an hour in the line cook’s hands look more lucrative.

When the chefs make more

In Massachusetts, restaurant owners only have to pay front-of-house workers  — waiters and waitresses, for instance — a portion of minimum wage. The rest, theoretically, comes from tips. At a pricey bistro where a table may drop a few hundred dollars, no big deal. But for some, that may mean just barely pulling minimum wage —  if that.

The “service rate” for bartenders, baristas and any other tipped employee is $3.35, with a “tip credit” that’s supposed to make up the rest. Basically, a waitress’s employer pays her a third of minimum wage, and if she doesn’t make up the rest in tips, her boss needs to cover the rest with a “tip credit.” Depending on the restaurant, it may be the waiter who makes less.

“When minimum wage was $8 an hour, the average income of tipped workers was $7.75, because of the tip credit,” says ROC's  Galimberti, over a cup of coffee in Somerville. “By law, workers are guaranteed the minimum wage, but the reality doesn’t bring them to that minimum wage. Owners commit wage theft, and withhold that supplemented wage increase… Often servers aren’t aware of the legal rights they have.”

This happened to Emily Taylor, Boston chef and social media manager, when she was working for a restaurant in Maine, which also falls under the tip credit system. Taylor, a then college student, started to suspect that no record was kept of her tips. A 23-year-old waitress at the time, Taylor wasn’t sure how to confront her boss.

“I just assumed that my employer would be honest would me, which is what every employee wants to assume,” Taylor says of her former employer. “At one point, I asked her about it, and she said, ‘Oh, I’m not sure, I share tips with the dishwasher,’ which is illegal, but I didn’t know that at the time... I remember following up with her afterward, but I kind of ignored it. I knew that, unless I signed on for some sort of legal situation, nothing was going to come of it.”

Although Taylor was able to live without those tips, many aren’t in contemporary Boston. The city’s cost of living continues to rise at an astronomical rate, already 18 percent above the national average, according to Forbes. Simultaneously, full-time workers making minimum wage take home just enough to cover what jumpshell designates the “baseline” cost of living here — around $1,600 per month — and that’s before taxes.

In other words, the average restaurant worker, if they snag a full-time job, can only pay for the bare necessities with absolutely no wiggle room — no birthday present fund, trips to the ER, surprise car repairs. Galimberti, a Brazilian national, says the people who feel this most are frequently minorities and immigrants, who often work back of house in fine dining and front of house in casual restaurants. Women, as well, often work as waitresses in casual restaurants, where they may be victims of wage theft via “forgotten” tip supplements.

The servers making $30-$35 an hour? They tend to be white men. According to a ROC United study, 40 percent of front of house workers are people of color, while only 22-23 percent of fine dining servers are people of color. 

A solution: Select Oyster Bar’s Michael Serpa choses to build a 20% gratuity into the bill, to be split by all the servers. While technically opitonal, this is factored in to every bill so guests can just swipe their card and blow that oyster stand. This way, tip fluctuation is less likely to occur, and a waitress knows she’ll come home with a more predictable haul any given night.

“If you’re at Target and someone forgot to stock the cereal, you don’t say, ‘Hey, I’m not willing to pay for this.’ It’s not your place!” Serpa explains. “There’s incredible discrimination that service staff experience based on tipping. Not necessarily based off of service, but based on assumptions.”

His model is similar to Danny Meyer’s restaurant model. The restaurateur eliminated tipping in all of his New York restaurants last February. Meyer raised menu prices, instead of adding a mandatory service fee. Serpa chose not to raise menu prices, because of his risk factor.

“I’m trying to run a restaurant, and if this fails, it’s my only option. It’s my first project,” Serpa says. “It’s hard for everyone to adopt that same model. If we model that, our 38 dollar halibut would be 46 dollars, and people would say, ‘This is insane.’”

What’s next?

In 2017, minimum wage for most employees will jump another dollar to $11 an hour, but the server’s rate will only increase by 40 cents.

Galimberti agreed with the Massachusetts legislature’s overall increase, but he wants more. For him, the onus of paying your employees a fair wage is on those restaurant owners, not the customers. By eliminating the tipping system (and subsequent tip credit), Massachusetts can force restaurants to adopt a more egalitarian distribution of wages among the people who get food on the table.

When asked where the extra dough would come from, Galimberti suggests restaurant owners check their own wallets before relying on their guests’.

What do you think? Skip the tip, or create a new model? Do you mind paying a set service fee, or do you want to pick your own price? Let us know in the comments!

Topic 
  • May 9, 2016