Some Afterthoughts On Tipping

It appears that the much discussed issue of either instituting mandatory tipping, adjusting menu prices to abolish tipping, or continuing to have voluntary tipping has, for the most part, been settled. Most operators are staying with allowing guests to decide the tip amount.

Fred G. Sampson
Fred G. Sampson

One group, Waiterpay.com, conducted a survey to get the servers’ point of view. They sampled a group of about 200 restaurant workers, the majority from the tri-state area, and asked how they thought “no tipping” would affect their work performance and livelihood.

Please note that the following reflects the survey exactly.

According to the survey, 78% of participants believed there was a direct correlation between tips and service, agreeing that the “quality of service greatly affects tips.”

When asked, “How will a no-tipping policy affect the quality of service you provide to customers?”: 38% of survey takers said they believe the no-tipping policy will significantly reduce the quality of service they provide to customers; 30% of survey takers said they believe the no-tipping policy will not affect the quality of service they provide to customers; 32% of survey takers said they believe the no-tipping policy would slightly reduce the quality of service they provide to customers.

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When asked, “Do you believe earning a higher hourly wage and eliminating tips will reduce your incentive to upsell?”: 33% will not have a reduced incentive to upsell; 77% will have a reduced incentive to upsell.

When asked, “How do you think eliminating tipping and earning a straight hourly wage will affect the amount you earn?”: 94% believed they would be earning less; 3% thought they would earn more; 3% thought they would earn the same.

When asked, “Do you think front of the house workers should make a higher hourly wage than back of the house workers?”: 35% said back of the house workers should be making more than front of the house workers; 46% thought they should be making the same; 19% said front of the house workers should be making more than the back of the house workers.

When asked, “If tips were eliminated at your restaurant, what do you think is a reasonable hourly wage for servers?” The survey average was $25/hr.

When asked, “Do you believe that restaurants should adopt a no-tipping policy?”: 94% of survey takers said NO; 2% of survey takers said YES.

Have you ever stopped to think how many service situations have a tip associated with them? To mention a few: delivery services, hairdressers, tip jars on quick-service counters, airline passenger luggage handlers, apartment and hotel doormen, cab drivers, hotel maids, garage attendants, various casino staff, and bartenders; and yet when most people hear the word “tip,” invariably their first thought is a server in a food establishment. Why is that? Because the chances are most of us have been in a food establishment in the last six to ten days and left a tip.

You should also know that tip income of all kinds was never policed by the IRS until the early 1990s. Their first stop was Las Vegas and their next group was the restaurant servers in all of the major cities. The reason they, the IRS, was able to calculate how much servers were earning was due to the greater use of credit cards, which created a paper trail, and they then established a base of cash tips at a lower percentage of the servers’ non–credit card sales. The downside of this procedure was to hold the employer responsible for the accuracy of employees’ tip earnings. That includes the employer’s Social Security share on the tip earnings of the employees, monies designated by the guests.

I think it is fair to say that today’s consumer is a somewhat more liberal tipper than previous generations. A server who is serious about their job can earn an average of 18 to 25 percent of the check’s total, plus $7.50 an hour in wages.

You can now readily understand why 94 percent of servers are opposed to doing away with tipping. I’m sure that, as an industry person, you knew that without my telling you. What you may not have given any thought to is the following.

In many ways, servers can almost be considered subcontractors. Management makes a major investment to offer its guests pleasant surroundings, it retains a qualified kitchen staff, purchases quality products, and, in most cases, pays top dollar in rent. The servers now find themselves in a position that, if they do their job well and receive an 18 to 25 percent gratuity, they in fact have made more on a party of four than the house, and without a financial investment, except their commute. Obviously, no one is suggesting that should or could be changed, but you must admit it is an interesting thought.

P.S. Don’t try it. Some have, and were fined.

Fred G. Sampson is the retired President Emeritus of the New York State Restaurant Association. He began working with NYSRA in 1961. Within the next four years the NYSRA more than tripled its membership and expanded from one regional chapter to eight. Sampson played roles in representing restaurants on issues including paid sick leave, minimum wage, liquor laws, a state-wide alcohol training program and insurance plans. Comments may be sent to fredgsampson@juno.com