As an arrogant waiter working at a fancy Westchester County eatery nearly 40 years ago, I helped institute a policy of writing a 20-percent gratuity onto every check. We believed that we were offering superior enough service that we deserved it, and we were fed up with the clowns who thought half that amount was generous enough.
Our floor staff was terrific, and most customers didn’t seem to mind the effrontery. Those who complained had the tip amount removed. Those who, for whatever reason (alcohol, lust) failed to notice the added amount and tipped on top of it all—I wish I could say we offered back their money. As I say, I was arrogant.
We pooled and shared those tips. We were making good money. As a customer at a fine-dining restaurant, I leave a tip of at least 20 percent, even when the service isn’t as good as what I offered back in the day (and it rarely is). If that tip amount were slipstreamed into the price of the meal, and I knew that were so, I’d have no problem with it.
Or would I? “People like to feel generous at the end of a meal,” says Paul Parker. He’s the chef at and co-owner of Rare Earth Wine Bar in Glens Falls, an innovative restaurant where traditions of ordering and service are blurred—and tipping, until recently, was discouraged.
This put Rare Earth in the rarefied company of such places as Thomas Keller’s Per Se and French Laundry, Sushi Yasuda in New York, Brand 158 in Los Angeles and Black Star Co-Op in Austin, all restaurants where the employees are paid (we assume) well and the cost of those paychecks is in the menu pricing. In the case of Sushi Yasuda, which eliminated tipping to conform to standard practice in Japan, owner Scott Rosenberg raised his prices by about 15 percent.
Tipping is “irrational, outdated, ineffective, confusing, prone to abuse and sometimes discriminatory,” Pete Wells ranted last year from his bully pulpit at The New York Times. “The people who take care of us in restaurants deserve a better system, and so do we.”
Parker echoes this sentiment. “I worry that we’ve created a class of people who have to beg. And who know they’ll get rewarded for touching you on the shoulder or going down on one knee. Which means we’re rewarding them for all the wrong behavior.”
He’s referring to studies that show how heavily tipping is influenced by server appearance and behavior—especially when the server is a woman. Blondes, for example, tend to get higher tips. Wearing red can net you a bonus. (One of the most-quoted researchers on this topic is Michael Lynn, and you can study these studies at his website, tippingresearch.com.)
At the higher end, however, some of that may not matter. “All of the studies I’m aware of have concluded that people will always tip the same,” Parker observes. “If you’re a 15-percent tipper or a 20-percent tipper, you’ve learned to do the math for it, and that’s the percentage you’ll always tip.”
The custom of tipping has resulted in a different minimum-wage structure for servers. New York’s minimum is $8 per hour, which will rise to $8.75 at the end of the year and to $9 at the end of 2015. But the server minimum is $5 per hour, with the extra three dollars coming from tips. Should the tips total not bring it to $8, the employer is expected to kick in what’s needed. But in a deft piece of legislative magic, the $5 minimum won’t increase over the next two years: The difference is still expected to come from those tips.
The New York State Restaurant Association helped with that magic. As its website boasts, the association “worked to educate legislators about the cash wage for tipped employees and why an increase is unnecessary” and “opposed legislation to increase the minimum wage to $8.50 an hour and the cash wage for tipped foodservice workers to $5.86 an hour and ties both to the consumer price index for annual increases.”
And the IRS also has to be reckoned with. As a server, it’s expected that your tips income will be at least eight percent of your restaurant’s receipts, and you’re expected to report anything you make over $20 per month to your employer.
Which means that pursuing a living wage outside of the fine-dining realm can be a continual challenge, and those tips are desperately needed. It’s the upper end that has any flexibility, but, as Parker discovered, expectations are tough to change. And offering a different service model created new confusion. “We were trying from the very beginning to be experimental,” he says. “We don’t have servers in the traditional sense because our people work on both sides of the kitchen door.”
An important component of Rare Earth’s no-tipping scheme was a point-of-sale system that allowed customers to use a tablet to view food and beverage options and then send an order directly to the kitchen. “That way,” says Parker, “our people on the floor could spend more time talking about those options and being available for questions.” But the POS system has been riddled with bugs, “so the servers were spending all their time doing damage control.” (He assures me that the system has since improved.)
It also turns out that many customers look forward to leaving that tip. “People want to be generous, so we initially set it up so that, in lieu of a tip, they could make a donation to charity. They like leaving money at the end of a meal.”
In the end, Parker realized that the money from tips could provide the margin his restaurant needed to survive. “As a new business, you’re trying to pay your employees a living wage while keeping your labor costs to a certain percentage of your sales. Without those gratuities, it became too hard to do that.”
For now, his philosophy on tipping—and on the potential benefits of eliminating it—is tempered by business realities. “I still like the idea,” he’s quick to say, “but it needs tweaking. And we have to survive first.”