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AP article on waiters and tips.

  • PeterL Sep 12, 2006 08:00 PM
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Read and discuss:

http://tinyurl.com/e5o3p

“One former waiter, Yakup Ulutas, is proposing restaurants change the system. Ulutas, a 36 year-old restaurant manager in Atlanta, founded a nonprofit organization, Fairtip.org, to persuade restaurants to implement an automatic 20 percent service fee on every check. He estimates 2,500 waiters have joined.”

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  1. Have you ever traveled in a country where no one accepts a tip?
    Startling and fabulous. Wouldn't you pay more for food if the
    restaurant paid a fair wage and this wage was reflected in the
    prices charged for food? (The restaurant already makes the money on alcohol and this might not go up in price.)

    1 Reply
    1. re: serious

      I have and will again soon. People's Republic of China. Tips are not accepted for meals. Also no one goes Dutch. Someone always pays for the table. 9 of us ate 12 dishes for $17. Very good food too.
      In the US how can I be sure my great waitstaff has received the tip I gave them? and not someone else?

    2. I snipped my rant about what's gone wrong with the notion of tipping in American restaurants and I'll just leave it that I will NEVER go to ANY restaurant that has a mandatory service charge for a party of less than eight or a restaurant who's mandatory tip for large parties is 20 percent. It's ludicrous that the tip MUST be 2-3 time the server's hourly wage. Let retaurants pay a fair wage and let the *tip* go back to being "a small gift for good service."

      6 Replies
      1. re: KayZee

        Let me get this straight. You won't go to restaurants that auto tip, and yet suggest that they should pay their waiters enough so that tips are just a nice little extra token? Where, pray tell, should this money come from?

        1. re: KayZee

          Two to three times my hourly wage? Yeah, right! Your average server makes $2.13 an hour, KayZee. I work in a fairly generous place and make $3 an hour. The bills at our restaurant average $50 per person. On a table for 8, that makes $400, and if you liked me, a tip of $80. That tip is more than 25 times my hourly wage. In fact, after the taxes and such get taken out of my paycheck, it's my take-home pay. A table like that could be a third of my wages for the night. Can you see why places do automatic gratuities on large parties now?

          1. re: JK Grence the Cosmic Jester

            write to your congressman to have the laws changed. in most states servers are not allowed to be paid less than minimum wage (still low, but not $2). restaurants still make money in these states, so i say there is something wrong with the labor laws in your state.

            1. re: Jennieb

              actually, Jennieb, I'd say that *most* states have a much lower min wage for tipped employees. perhaps servers from around the country can chime in to be sure. I can attest to the $2.83 min in New Jersey, Pennsylvania, Maryland, North Carolina, Virginia, and Washington, DC.

              1. re: Jennieb

                In San Francisco, waiters apparently are paid the minimum wage of the CITY, which I think is $9.14/hr. I guess customers can't tip less even though the restaurants probably raised it prices to pay the staff, which means the total bill is higher, which means the tip will have to be higher... wow, I'm surprised I haven't thought about this earlier!

                1. re: boltnut55

                  >surprised I haven't thought about this earlier!
                  >
                  you've always got to be vigilant to find reasons to tip lower.

                  see the long discussion about tip credit and differetial impact on
                  frontroom/back room staff by that incanto fellow.

          2. I never understood why waiters and waitresses are so severly underpaid. I waited tables in college and made well below the minimum wage (around $2/hour). So I was completely dependent on tips. Other "tipping" industries (e.g. hairdressers) at least pay their people a somewhat fair wage. The worst part for waitstaff is they are taxed on an estimate % of their bill (18%, I think). So even if they encounter bad tippers, they are still stuck paying axes.

            I would much prefer for restaurants to raise the waitstaff rates to at least minimum wage, then tipping can be more discretionary. I wouldn't mind having the menu prices increase to compensate.

            1. I have several friends that work in the industry, and they fully believe that tipping etiquette is no longer 15% - 20%, but AT LEAST 20%. No matter how many times I explain to them that as the cost of living goes up, the price of food goes up and therefore the tips, they don't want to hear it. Of course 2,500 waiters have joined this cause, they have nothing too lose.

              On a side note, these friends of mine feel very insulted when they get "autograted" at restaurants. Where they normally tip well over 20+ (almost to make a point), they tip only the "mandatory" amount if the gratuity is included.

              1 Reply
              1. re: The_Bayou

                Your friends work in the industry, probably a place that autograts large parties and they feel insulted? That doesn't make sense. In my experience people who say they would have left more really mean they tip between 5-10%. there is no reason you can't add more money to the service charge to bring it up to what you would normally tip.

              2. And..i'm not so happy to see tip cups at take out counters.

                4 Replies
                1. re: serious

                  Yeah, I know it's trendy for tip cups to appear at places like Starbucks, but those people are paid more than waiters.

                  TT

                  1. re: TexasToast

                    I throw money in those, but that's because I live in Los Angeles where anyone in customer service has some pretty tough customers as a rule.

                    And the minimum wage no longer can cover cost of living.

                    Nice weather, though.

                  2. re: serious

                    It tip at my local taqueria, because I can see the staff working their butts off. I also tip (but not 15%) on pickups from some restaurants I go to regularly, especially if they put up with fuzzy mobile calls. It makes them much more willing to fix the misunderstandings that sometimes arise from not having the menu in front of me.

                    1. re: serious

                      ditto. or even worse...when they have the tip line on the credit card slip.

                    2. Maybe I don't understand. What's the difference, from the customer's point of view, between paying for a $10 meal that includes a 20% service charge that goes to the server (a total of $12), and paying 20% more for a meal so that the server can be paid a decent wage (in this case, again a total of $12)? Why do I care how the restaurant gets enough money to pay its employees? Either way, I'm no longer an employer as well as a customer (as I am in the current system, in which I pay my server separately from the restaurant). I just don't want to be bothered with tipping and all that it implies, any more than I want to be bothered tipping the person who sells me shoes.

                      10 Replies
                      1. re: Marsha

                        If restaurants paid the full wages and society eliminated tips, the cost of going out to restaurants would triple.

                        1. re: industry worker

                          That's not true. Nobody tips in London and service charges were, until fairly recently, uncommon. Yet still, those amount to less than a 20%++ tip. Is the food expensive? No more so than in Manhattan.

                          TT

                          1. re: TexasToast

                            I'm not sure where you're eating, but everyone I know in London does tip (ok, not as much as in Manhattan, but they do tip). And in my experience the food is definitely more expensive than in Manhattan. This may only be my experience, but it seemed much easier in NY to find really good cheap food. In London, you can get really great food, but you'll pay much more for it.

                            1. re: Kagey

                              Expensive it may be, but it's not three times as much, as "industry worker" suggested. And you can find really good, inexpensive food. Most people just don't know where to look.

                              TT

                              1. re: Kagey

                                I'll pay what I'm charged, as long as I don't have to employ subcontractors to bring me my food. If I can't afford it, I'll order something cheaper or go elsewhere. I just plain hate the whole tipping system, and I'd welcome a replacement.

                                1. re: Marsha

                                  Why??? It empowers you to do as you wish.

                                  1. re: therealbigtasty

                                    This kind of empowerment I don't need! I just wish to buy a meal that someone else has cooked and have someone serve it to me, and pay one flat fee for the experience. Knowing that someone is depending on me to decide how well they have behaved and how much they should be paid for that behavior is not something I want to do; it's the antithesis of relaxation, which is what I want when I go out for a meal (seriously, I do love to cook, so when I go out it means I'm really tired or in need of a break). I don't want to be worrying about being fair or unfair to my server; I don't want to do the math; and I'm perfectly willing to lump both service and food (along with ambience) into my total estimation of the restaurant when I'm deciding whether or not to return. I want the process to be as simple as possible. (Thanks for asking!)

                                2. re: Kagey

                                  I work at one of the top restaurants in Canada. In that top segement, wages would have to more than quadruple for waiters to maintain their take home pay. With overhead, product and profit for owners, the prices wouldn't be far off tripling....

                              2. re: industry worker

                                Not so sure about your math.

                                The simple answer is that each item on the menu would increase by between 15% and 20% because that's exactly the amount of money the waiters are accustommed to getting. Perhaps this would be a touch higher given the fact that restaurants currently have the luxury of erring on the side of plenty when it comes to staffing waiters knowing they can always send one home and that they don't add up that fast on labor for the few hours they're around before getting cut.

                                The reality, the gap between prices at high-end and "fast casual" would widen. Fast casual places would hire barely employable waiters and pay them like $10/hour (maybe), thus their costs wouldn't go up even 15% over all. Meanwhile, high end places would likely suck it up, pay their waiters well and pass that cost along to the consumer (though they'd likely make out better).

                                In any event, waiters should not want this in a million years. They kick and scream at the audacity of restaurants either requiring tip outs or even charging a customer say $150 per bartender for an event and only paying the bartender $125. The fact that each and every other industry does exactly this is always lost on them, but why let logic ruin a perfectly good argument.

                                At anyrate, if restaurants did away with tipping, over all one of two things would happen, either customers would end up paying a bit less, or restaurants would make more. Waiters (at least those who are used to making huge bank), would make less.

                                1. re: detlefchef

                                  Your math makes sense, you should be able to increase prices by 20% and use all that increase to pay wages equal to what waitstaff makes today with tips. The problem comes in the fact that the today in the US most waitstaff are reporting an income to the IRS that is lower than what they actually earn. If they get their tips replaced 100% with salary they will end up paying more taxes (and most likely restaurants will have to pay more social security). So prices would need to go up about 25-30% to make the portion of this market that is black and untaxed, legal and taxed. But anyone who says that prices need to double or triple and that every place would close either loves the idea of cheating Uncle Sam and/or has never been to the dozens of countries around the world were service staff in lots of industries get real wages and no or little tips without the whole market collapsing.

                            2. Food in Japan is very inexpensive..if not eaten in a hotel. I had super meals in underground stations and at random places on the street. NO TIPPING anywhere.

                              17 Replies
                              1. re: serious

                                industry worker, I am math challenged (hence, in part, my aversion to tipping, so I still having a little trouble understanding why the prices would need to triple - is it that the server under the present system gets paid about 25% of the take-home by the restaurant, and makes the rest in tips (75%)? I get that. But since each individual diner gives (for the sake of this discussion) about 20% of the cost of the meal as a tip, then all of these 20%s from the diners that the server serves must add up to the 75% of the total take-home of the server, right? So why the need to triple the cost of each meal? Why not just shift the payment of the 20% (which doesn't vary) from the tip to the cost of the meal, and distribute the very same 20% to the server? Also, why would the overhead and product and profit for owners be affected? (The mention of overhead always makes me a little suspicious, as it is usually accompanied by a fine, vague wave of the hand as someone is explaining to me why I am either getting less service or paying more for the same service, which makes sense if the rent is going up or food is becoming more expensive, but I already know that these prices would be included in my meal anyway). Can you clarify this for me?

                                1. re: Marsha

                                  As a former small business owner (not in the food industry), I know that for every dollar paid out in salary there is close to another dollar paid in taxes, unemployment insurance, FICA, etc. So the same 20% paid directly to a waiter as a tip would increase significantly if paid via the restaurant as salary.

                                  It should not triple food prices, that sounds extreme, but the increase would be noticeably more than the simple tip amount.

                                  1. re: BobB

                                    Okay, I'm starting to understand. Are you saying that if servers got a larger salary, they would also get more FICA and unemployment (assuming these aren't the same - I'm a little foggy on that). Is this the case?

                                    But why would taxes go up, since the restaurant is only paying sales taxes on the food and that is already being paid? Property taxes wouldn't go up. Do they charge taxes on employers that rise in proportion to how much the employer pays employees? (As you can see, I have no small business experience, and if these are dumb questions, please forgive me).

                                    1. re: BobB

                                      That is hyperbole. FICA is 7.65%, FUT is generally under 1.0% on the first $8k in earnings and SUTA even in high cost states are generally under 10% of the first 10k in wages. And that is due from employers on BOTH wage and tip income up to the statutory maximums.

                                      Now if you are saying that a FULL benefits package *might* cost as much as the wage package in the restaurant industry, I would again say, I have never seen one that even exceeded 65% of wages (including medical). That industry generally provides few benefits (with the exception of some of the chains) where some of the employees do pretty well.

                                      For the record, I have 700 manufacturing employees in six states,

                                    2. re: Marsha

                                      Think of it this way. Current ideal situation for a restaurant is 1/3 product, 1/3 overhead (including wages), 1/3 profit. So every $100 (our menu is about $100), 33 for overhead, 33 product, 33 profit.
                                      The team I'm with right gets $6.50 per hour (on which they pay taxes) for 7 hours, plus they make an average of $190 in tips per shift (on which very little tax gets paid).
                                      So with no tips, they need to make $235 which is $33 per hour (higher if you look at actual take home pay). So wages are up about 5x
                                      Food cost is same-$33.
                                      New wage (even bigger chunk of overhead now)- $166
                                      Same proportion of profit to owners (who won't be taking a cut)-$100
                                      New Menu price =$300.

                                      1. re: industry worker

                                        I think I'm following you. Currently, your team members earn $6.50 per hour salary, plus about $27 in tips, which comes to $33 per hour. (Question: Does this $27 equal about 20% of the cost of the meals they serve each hour? I am assuming so.) So why can't the restaurant add the 20% directly to the cost of the meal, and cut out the middle man (me)? Your team members would still be getting the same amount per hour. Why do we need to rely on the current ideal situation ratio of 1/3, 1/3, 1/3, when that is based on the old way of paying the tiny salary? Why not change the ratio (to keep the business majors happy), since it wouldn't affect the restaurant's profits or product? Am I missing something?

                                        1. re: Marsha

                                          Any business owner would NEVER pay waitstaff that amount.

                                          They'd pay fifteen bucks an hour and save the rest as profit...

                                          1. re: therealbigtasty

                                            Ah. So the beneficiaries of the current system are the restauranteur (who pays tiny salaries) and the servers (who get a much larger hourly wage than most people)? But why wouldn't the restauranteur pay that to the waitstaff, if they made the same profit?

                                            1. re: Marsha

                                              You'll have to pardon me, as I'm very suspicious of all business owners. Especially in the restaurant business where the majority of owners are quite cheap.

                                              I've worked in a ton of restaurants where an owner is very likely to sacrifice safety and fair work conditions if it meant that he or she would be able to make a little more money.

                                              1. re: Marsha

                                                because if there was potential for greater profit, the owner would keep it. he would certainly NEVER keep his take the same and just hand over money to the waitstaff. no way.

                                            2. re: Marsha

                                              this system would also result in really pushy selling as opposed to good service--

                                              the waiter will try to sell you multiple cocktails, expensive bottles of wine, extra courses, the most expensive (as opposed to the best) dessert in order to get the "commission" on each item as your bill inflates, & they won't care about the quality of the rest of your service apart from how much you're spending

                                              but in the current system, even though many people tip on the percentage of their bill, the servers know they have to give good service to get a good tip-- they give good service to more customers, no matter the price of the entree etc.

                                            3. re: industry worker

                                              IW - Please take this as constructive but your analysis is seriously flawed. You have many apples and oranges in the assumptions so let me try to assist.

                                              If the total income generated by the resto is this one check and there is one waiter only handling this table then you might have an argument, be he has been given a 119% tip, somewhat unrealistic.

                                              But let's take a more realistic example. If that same waiter handles 10 tables in his 7 hour shift and each has $100 tab ($1,000 of checks), then we begin at about the same point of the $190 tips you started with at an average of 19%. For the resto to make the same amount on the night, it needs to increase the total tabs to $1,190, a 19% increase. At the end of the evening, the resto and the waiter would be in the same position (not takng taxes into account).

                                              Hope this helps.

                                              1. re: jfood

                                                Now this makes sense to me. As one of those ten customers, I'd be paying $119 instead of $100 - correct? And the waiter would get $19, and the restaurant would get $100, just as it did when it charged $100 and I paid the waiter $19. These numbers add up; I hope they are correct.

                                              2. re: industry worker

                                                Ideal? How 'bout wet dream. I have worked in and studied the bottom line of a ton of restaurants and nobody sniffs 33% profit. If that was even remotely normal, why is the attrition rate so high? I mean, you could do a lot worse than normal and still manage. The first time the basics were explained to me it was the 30-30-30-10 rule. 30 cost of goods, 30 labor, 30 overhead, 10 profit. Now it's certainly everyone's goal to turn some of those 30s into 25s, but achieving 33% profit margin is borderline impossible without pulling off something unreal. Once you base your economic model on something like that, your argument loses all credibility.

                                                1. re: detlefchef

                                                  Let's give the 33% labor cost estimate the benefit of a doubt even though I am not sure it is correct. How much of that 33% cost is wages for staff that lives on tips. Maybe 5 of the 33%.(1 head chef probably as a salary equal to 10 waitstaff) Say that 5% has to be increased by a multiple of 5. So now that 5% becomes 25% of the original. Or the old cost of 100 is not 120. Not the 200 to 300 some math geniuses here are claiming.

                                                  1. re: mdibiaso

                                                    Maybe the head chef in a hotel, but not a restaurant. I am a pastry chef in a chic Los Angeles restaurant, and, per hour, I make only about three times what the servers make before tips. With tips, they routinely make more than I do per hour. True, this is Los Angeles, where waiters are paid $7 per hour. I find it weird that NY pays so very little to servers. BTW, in London, where I lived years ago, service sucked hard in many restaurants, I'm convinced because tips were included in the bill, and they had no incentive to do a good job and please the customers. This may have changed in recent years. I wonder, why change the current system of tipping 20%? It's not that hard to figure out, and I think it does inspire better service. Thoughts?

                                                    1. re: mancina

                                                      i agree.

                                          2. Do service staff declare tips on their income taxes, or is it mostly under the table? If so, wouldn't the autograt 20% be automatically declared on their taxes? I'd think they'd want to keep the undeclared tips without having to pay taxes on them.

                                            1 Reply
                                            1. re: monkeyrotica

                                              A 20% autograt is a policy of the restaurant not the waiter, I don't decide when to autograt or not. All of my credit card tips are declared by my employer so I do pay taxes on them. Cash can be different but since 95% of my tips come from credit cards it doesn't make much of a difference

                                            2. Do service staff declare tips on their income taxes, or is it mostly under the table? If so, wouldn't the autograt 20% be automatically declared on their taxes? I'd think they'd want to keep the undeclared tips without having to pay taxes on them.

                                              4 Replies
                                              1. re: monkeyrotica

                                                I declare it...

                                                The restaurants I've worked for make sure of such things.

                                                1. re: monkeyrotica

                                                  First, the law says that servers must declare 100% of their tips. However, there is a minimum that can be reported that used to be (and may or may not have changed in the last couple of years) 8% of their sales. Many people think that's all servers are required to declare--not true. all tips are considered taxable income and must be declared by law.

                                                  How much servers declare depends on a) the server b) the % of checks paid with credit cards (usually at least in part a function of the cost of the restaurant) and c) the accounting, tipping, paycheck system of the restaurant.

                                                  a) some people are more honest than others. Some fear being audited more than others.

                                                  b) If you want to hide tips, you can only do so with cash tips. (Because the credit card tips are recorded.) In pricier restaurants, most of your tips are in cash, so you can't declare much under what you earned even if you want to.

                                                  c) Some restaurants keep very accurate records. Some restaurants are pooled houses, where all of the tips go into one pool and are then divided amongst the staff. In those restaurants, the management usually decides how much is declared, not the individual servers. Also, some restaurants collect servers' tips, deduct taxes, and pay the servers in paychecks. here again, the restaurant decides how much to declare, not the individual server.

                                                  1. re: nc213

                                                    >In pricier restaurants, most of your tips are in cash
                                                    >
                                                    er, that's not what i'd expect.
                                                    i'd think as checks went above say $20 dollars, they are more
                                                    likey to be all credit card transactions.

                                                    there might be a lot of cash forked over in modest restaurant
                                                    which get a lot of large parties ... say 10people x $30, or a lot
                                                    of cash business at an attached bar etc.

                                                    1. re: psb

                                                      sorry, I meant the opposite--in more expensive restaurants most tips are on credit cards, therefore even if you wanted to you couldn't hide much from the IRS.

                                                2. I don't understand why people can't just tip?
                                                  If you can't understand paying a 20% tip, then you should be at home cooking for yourself.

                                                  1 Reply
                                                  1. re: uman

                                                    If it were always a case of 20%, I don't understand why that 20% can't just be added to my meal.

                                                    But sometimes it isn't (or is it the new, unbreakable rule that all tips must be 20%?); sometimes the service is wretched and sometimes it's spectacular, and I believe I'm supposed to tip accordingly--isn't that the point? Lucky I like to cook for myself.

                                                  2. When did the 20% rule creep in and get universally accepted? It's too much, with the tax, added to cost of a meal. And that tip is on top of greatly inflated wine cost. And..the server?
                                                    I'm responsible for the living wage of that worker? Should I be tipping the truly underpaid department store worker?

                                                    3 Replies
                                                    1. re: serious

                                                      It's the Lemming Theory or If You Speak it Often Enough it will Be the Truth. I agree there is no 20% rule, at least in jfood-land.

                                                      With all commissions getting squeezed (Real Estate, Sales clerks, etc.) the wait-lobby has done an outstanding job on chest thumping for more money. Unlike some other commissioned based businsses waiters have a good point though in that they have nver been paid minimum wage. But, menu entrees have increased significantly over the last ten years and the 15% tip has become more in nominal dollars as it moved in lock-step with the ever increasing resto prices. To now raise the standard to 20% increases their take at a faster rate, double dipping in my book.

                                                      I start at 15%, and there is a high probability it will increase and a small probability it will decrease. If the waiter is rude, unattentive, does not perform the full wait service, or anything within his control, it will go down. If he performs his job well it will definitely go up. If the kitchen screws up, not the waiters fault, no demerits. if the busboy spills stuff on me, no demerits. If he charges me for items not ordered, brings the wrong dishes, brings entrees while appetizers still on the table, sorry but these are within his control. If he asks if everything is OK (after we have had a chance to try a couple of bites), checks in occasionally, comes by as the table is being bussed to see if everything was OK, he is looking at 18-22%.

                                                      I would love to see restos pay enough for waiters to earn a fair living and let the tip provide for service above the norm. That's how I feel in foreign countries when waiters are truly happy when they receive a tip versus the sour faces we sometimes see here. It's not fair to waiter or customer.

                                                      1. re: jfood

                                                        I like the jfood tipping bible. Where can I order copy?

                                                        TT

                                                        1. re: jfood

                                                          I agree that waiters have upped the ante perhaps unfairly, to the point that servers will routinely bitch about a customer who pays 15%, as if they have been undertipped. They also tend to complain that the sometimes-observed rule of 15% at lunch, 20% at dinner is unfair because they do the same amount of work at lunch as they do at dinner, but that isn't quite true. People tend to linger more over dinner, taking up a table for two hours or often more, so I imagine since turnover is slower, tips must be reflected. All in all, in Los Angeles, servers seem to have a pretty good deal. They get minimum wage, at least, and they usually get 20% or close to it. (Except from older people--what's up with the oldsters giving 10% or less?) Anyway, I always overtip for good service, and lavishly overtip for excellent service.

                                                      2. I tip 20% for good service, maybe a bit more for GREAT service. If I get a lousy waiter - not if the kitchen is slow, but if the waiter is lousy, I don't think they need to be making more per hour than I do, frankly. I still rarely - if ever - tip under 15% because I used to wait tables back in the day and just can't do it.

                                                        1. Was a waiteress and bartender for 5+ years and probably always over tip. However there are exceptions when your service is less than satisfactory (Today I was forced to have Tom Yum instead of Tom Kha b/c the waitress did not hear me correctly and didn't want to correct the matter. She merely took it in the kitchen and added some coconut milk...not satisfactory). I left her 15% rather than 20%+. There needs to be an incentive in the service industry to help ensure good service. Not all servers deserve 20%. Of course some people perpetually undertip on good service, but usually it rounds out if you are a genually good server (always did for me). If this Yakup wants to change the system he should try to secure better wages directly from the servers employers.

                                                          Last note...every single person that accepts a job as a server or bartender knows that they will be relying heavily on tips. That is what makes it so great b/c every so often you get a nice, big, fat tip! If you aren't willing to take the gamble, get a different job!

                                                          2 Replies
                                                          1. re: Jennieb

                                                            Amen, sister! Err, I mean, I agree wholeheartedly with my fellow Chowhound, Jennieb. Let's hope that puts and end to the topic.

                                                            TT

                                                            1. re: TexasToast

                                                              if restaurants paid servers a higher wage and added this to the cost of food there would be two problems that I see.

                                                              One, the restaurant has to now pay higher sales tax on their sales.

                                                              Two, the restaurant will also have to pay higher workers comp fees as it is in Florida 2% of wages.

                                                              therefore everything goes up even more than adding the original 15 -20% tip to the prices.

                                                          2. Sorry, just found this thread and had to add my two cents even though everyone seem to want to wind it down.

                                                            My problem is the complete abuse of the tip system by restaurant owners who:
                                                            1 - Pay wages below the regular minimum wage and subject salaried employees to 16 hour days and still hardly make a profit (yeah, right).
                                                            2 - Take the tip money directly and dole out anywhere from 15 % to 100 % back to the service staff. Disturbingly more and more restaurants are taking all tips and giving back a small percentage. Thought your tip was going to the waitress, think again.
                                                            3 - The tip money the restaurant owners take is tax free since the taxman assumes it goes back to the service staff. Yeah, it would be nice if the service staff actually declared their real tips too. "Sure you do"
                                                            4 - Tip out to support staff based on percentage of sales. Good idea for buspersons, hosts and bartenders who deal directly with the customers, bad idea for kitchen staff and management. Does the service staff support everyone and whose salary is the restaurant owner paying?

                                                            The tipping system is so abused here in Canada that I am in favour of scraping the whole thing. Restaurant owners - learn how to run a business - yes labour costs money. Every other small business owner has figured it out, I’m sure you can.

                                                            I will refuse to pay a set gratuity. A set gratuity is just an increase in the menu price from the customer perspective, so add it to the price and figure out your labour practices among yourselves.

                                                            Signed, 25 years in the industry (busgirl to management and all in between)

                                                            6 Replies
                                                            1. re: Mila

                                                              "Take the tip money directly and dole out anywhere from 15 % to 100 % back to the service staff. Disturbingly more and more restaurants are taking all tips and giving back a small percentage. Thought your tip was going to the waitress, think again."

                                                              I disagreee with this to a small point. As much as waiters love a good tip many can be unspeakably stingy when it comes to tipping out. I see no problem with servers needing to tip out the people (bussers, backwaiters, service bartender) who made it possible for them to focus on the needs of their customers to the point that they were given a huge tip.

                                                              Plus, I've worked in countries where there was no tipping and in some of them the service is consistently awful.

                                                              Paying minimum wage or slightly higher and getting rid of tipping WILL result in bad service, especially in fine dining. Why? Because it would be an end to the "career waiter". Excellent service is an art, a craft and a trade... one that no one will stay in for long without the money tips bring in.

                                                              And yes, to those who think that it would just necessitate a 20% increase on menus you are forgetting all the associated taxes that go with paying a worker more.

                                                              Plus, you may really be pissed about that 20% more you don't have a choice about paying when you would be seriously inclined to not leave a tip at all over a bad experience... first time that happens to you you'll be moaning about the good 'ol days when you could at least withhold the tip..

                                                              Whenyou're sitting there thirsty as heck... wanting nothing more than another drink... and no one has any incentive at all to make sure you get as many drinks as you want.. you'll be sorry.

                                                              1. re: lebelage

                                                                LOL, you're quick on the keyboard lebelage. Sorry if I was unclear on some points, it is a topic that gets me worked up.

                                                                I agree that wait staff tipping out to support staff can produce some of the stingest tippers around. So I agree that a percentage of total sales is the best strategy. And yes, sometimes you stiffed on a bill but many bills you get tipped exceedingly well and it all averages out. My gripe is when management and chefs garner part of the tip pool which to me is only an excuse for owners to pay lower wages.

                                                                Absolutely service is an art and a craft, but as the customer I would like to be the arbiter of what is good and what is bad. I don't buy products just to make sure all the products at the store are bought evenly. I don't want to have to tip for bad service to make sure each server get the same amount of tips.

                                                                And yes, there are many more associated costs with increased wages, tax, health care benefits, workman's comp to name a few. But at the end of the day this is a business and the business people who own restaurants need to learn how to run a business efficiently without relying on tips as wages.

                                                                I think we are essentially on the same page, I'm just fed up with the abuse of the tipping system. The abuse seems more prevalent in the high end restaurants. I believe somehow the system needs to be re-worked, maybe cash only tips like they do in many salons / spas. I don't know the answer but I simply refuse to be auto-grated and if I'm in a large party that has an auto-grat and the service doesn't measure up, I have and will refuse to pay part or all of it.

                                                                And of course I leave a ridiculously large tip for good to great service.

                                                                1. re: lebelage

                                                                  Your perspectives are interesting and well articulated, but having just returned from Paris, where tipping is minimal, I found that the service was consistently excellent. We ate at fancy places and totally non-fancy places. The prices were amazingly not outrageous; many times they paralleled those at home (SF Bay Area), or were cheaper. The restaurants seemed to be doing terrific business, and everyone seemed happy with the minimal/no tipping convention. And certainly several of (perhaps most of) our waiters were older, sophisticated, and knowledgeable. I'm afraid my experience contradicts your predictions. I just can't believe that all of Paris, which has excelled in the restaurant business for some little time now, can be so very wrong, and since nobody at all seems to like the system here (except the "career waiter" you mention who would prefer tips to a proper wage), I say it's time for a change.

                                                                  1. re: Marsha

                                                                    In most parts of the world Service is horrible!!! I travel quit frequently and stay at some of the top resorts in the world... from the Carlton to the Peninsula in Hong Kong. In most countries service is PATHETIC! I think we have a great system here in the united states. In my book service in LA, NY, SF are TOP NOTCH! as for the rest of the states... well they are okay as well.

                                                                    If servers deserve more money/wages/tips, I recommend we have a requirement (test, courses, mybe even schooling like bartenders) before we hire or even sit at one of their tables (Kind of like the Benihana Chefs with the color hats/seniority)

                                                                    1. re: Marsha

                                                                      Hi Marsha,
                                                                      I have waitressed and managed restaurants overseas in:
                                                                      London: generally no tips, certainly not 15%, occasionally a built in service charge
                                                                      Melbourne: same as London, possibly even cheaper
                                                                      Jakarta: no tipping

                                                                      The North American style of service tends to be customer centric, which is a fairly novel concept for the rest of the world. I find that NA servers develop a relationship with their customers, even if it only lasts 1/2 an hour.

                                                                      European service staff are very professional, albeit more distant, and certainly consider their job as a career. Interestingly enough, the patrons view the servers as professionals and treat them as such, whereas in NA we tend to assume all servers are working their way through college.

                                                                      Asian service was amazingly meticulous with attention to all details, though fair enough I was working in a 5+ star hotel.

                                                                      Somewhere is the NA system there is room for change. As barcelona says maybe a certification or apprenticeship program, as is common in Europe. I believe that the onus is on us, the consumer to change our attitudes as well and come to the understanding that restaurant service can and is a skilled and worthwhile career.

                                                                      Fun discussion, thanks for your input.

                                                                      1. re: Mila

                                                                        "Interestingly enough, the patrons view the servers as professionals and treat them as such, whereas in NA we tend to assume all servers are working their way through college."

                                                                        i can only speak for certain markets, but in places like boston that is indeed the case. students, writers and actors biding time till their big break... this country does not have a young generation of professional waiters. even many of the older waiters seem simply unfit for much else and barely competent for fine dining service. as a manager, sommelier and diner, i tear my hair out regularly.

                                                                        the mediterranean countries seem to excel at service. alsace has always been good to me. however, i had atrocious negligent service all through germany. in london, service was passably good at super high end spots, and varied crazily at other price points. service in the carribean resorts is atrocious.

                                                                        i'm in the industry and prefer the tip system as incentive. places like hotels and private clubs, that have union wages and mandated tips, usually offer the most disinterested service in town.

                                                                        the servers who do best consider themselves independent contractors. we need more of them.