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Are we supposed to be tipping much less than I thought in California?

I just fully realized what this whole "no tip-credit" deal in California means.

See here: http://www.dol.gov/whd/regs/complianc...

This is completely insane. In this piece, it says that waiter's wages are minimum of $10.55:

http://thepricehike.com/post/63737740...

And that is the minimum amount REQUIRED to be paid to all servers??

So when I dine out in SF, it should be fine to tip closer to 10% than the 20% I have been?

But this applies anywhere in California really. Why are we, as diners, tipping 20% when our waiters are getting guaranteed high hourly wages?...

I thought the justification for tipping high was that waiters had to makeup their minimum wage, and then exceed it with tips to make good money. But in California, that's not true.

So have I just been a gullible fool in tipping 20% average in California??

Can anyone explain this further to me? What do you guys tip on average?

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  1. Minefield of a post - but wading in.

    1. Insane hardly. States and local government can set their own minimum wage as long as it meets federal guidelines. The minimum wage in some areas of California (has it become all areas?) is yes, around $10.00. For a typical restaurant server with a 20 hr (optimistic!) shift per week it comes out to $200 a week.

    2. Business owners cannot get around paying the minimum wage in California, by putting the onus on their customers to make up the difference. (which for various economic reasons makes sense - while food service is a low margin business it surely isn't the only low margin one - and why restuarants should get a special exception i've never understood)

    3. As a personal thing, I never was tipping to subsidize the minimum wage! That was never the justification for tipping. It was tipping for personal serving, because personal serving is difficult and variable in ways other types of professions are not.

    4. I tip somewhere from 10 - 15% for food delivery, and 15-25% at restaurants. My understanding with tips, at $10 an hr, most in the food service industry with one job make about $18,000 a year (which is why they try to take multiple but it's hard because the various jobs don't have to take into account the other schedules)

    3 Replies
    1. re: goldangl95

      to add another point to all the valid ones you raise:

      the inescapable high cost of living in san francisco, makes all this talk about living on the minimum wage (especially if you don't even have full time work, health benefits, etc) absolutely idiotic.

      1. re: westsidegal

        So, you would live outside of the city then...

        1. re: BacoMan

          how familiar are you with the rental rates in the suburbs of san francisco and with the costs of commuting in san francisco?

          it appears that you don't have much knowledge about the area.

          let's put it this way: i moved from that lovely city because the cost of living was strangling me.
          by comparison, los angeles, where i live now, is an out and out bargain.

    2. When did 20% become the "standard" for tipping in restaurants? I have always thought 15% was standard.

      2 Replies
      1. re: DavidT

        Generationally, it's edged up (people under 40 tend to tip 20%). I'm not sure why (the receipts that print tips at the bottom and include 18% as the lowest number? recession? income inequality?)

        1. re: DavidT

          People in the service industry usually tip 20%.

        2. What I usually do is ask the wait staff for his/her 1044 from last year so I can tip according to his/her station in life.

          1 Reply
          1. re: PeterL

            Peter I think that's too intrusive so I just ask them what they made.

          2. You can tip whatever you want, that's the nature of a tip.

            But if you don't tip 15-20%, you'll look cheap compared with the average SF diner. You could leave a note explaining how you subtracted for the lack of tip credit and any surcharges, in which case instead of cheap you'll look crazy.

            http://www.zagat.com/b/san-francisco/...

            21 Replies
            1. re: Robert Lauriston

              So people actually do tip less in SF on average though. That makes sense given the rather high hourly wages waiters are earning there.

              I'm just a bit baffled, as everyone has always said maximizing tipping is important because waitstaff have to make up to the minimum wage with their tips.

              I now don't feel nearly so much pressure to tip 20% minimum, that's for sure.

              1. re: BacoMan

                I keep hoping someone will jump in here and explain the whole "tip credit" thing. I don't understand how it works. Sounds like the server's hourly wage is reduced by the hourly amount of tips so that it equals out to the minimum wage plus whatever tip amount that exceed the minimum. Is that right? And if so, how do we know who gets what? I've always understood that tipping in restaurants is to make up for the low wage. And I don't think highly trained wait staff should only make minimum wage. I'm even more confused having written this so hopefully it makes sense.

                1. re: c oliver

                  "I've always understood that tipping in restaurants is to make up for the low wage. "

                  Me, too. But this is FALSE in California. What you are thinking of is precisely the tip-credit.

                  So in the majority of the US states waiters are paid something like $2.13/hour by the restaurant. If they make less than the actual minimum wage (which differs by state, and even by county), the restaurant has to make it up.

                  So example #1:

                  Restaurant pays waiter $2.13 an hour, and the waiter only makes $5.00 in an hour for their shift. The minimum wage in the area is $7.25 though. Therefore the restaurant must pay the waiter an extra $2.25 for all of their hours.

                  Example #2:

                  The restaurant pays the waiter $2.13 an hour, and the waiter makes $15 an hour in tips (so, $17.13 total per hour). In states with tip-credit's the restaurant is allowed to deduct the difference between the waiter minimum ($2.13) and the minimum wage ($7.25), which in this case is $5.12. Basically, the restaurant saves $5.12 per hour on the waiter by not having to pay them up to the minimum wage.

                  Example #3:

                  The exact same as #2, but now we're in California. The waiter makes $15 an hour in tips on average, but there is no tip-credit system, so no matter what, the restaurant has to pay the waiter $7.25 an hour regardless of how much they make in tips. So the waiter in California makes $7.25 + $15 = $22.25 an hour compared to the $17.13 that he would make in most of the others states.

                  So basically, in California, we do not have the system of most of the country. The same system that people have been telling me my whole life was why we needed to tip so high all the time (20%+ minimum, etc...).

                  Imo, waiters in California should be fine with a tip much lower than 20%. Especially in places like SF, where the local minimum they must be paid is $10.55, AND there is a mandatory 4% service charge on all checks. (And in fact, as Robert's article illustrates, tips in SF are lowest on average in California of the major cities, so my logic would appear to have some sense behind it).

                  1. re: BacoMan

                    It's also possible that Californians go to informal counter service-type places more frequently (I don't usually tip 15-20% for a burrito at a taqueria). Additionally some cheap ethnic restaurants appear not to have quite the same tipping ethos. There's a pho spot I frequent that didn't even bother to give me change once - I think the bill was $9.05 or so and I gave them a $10 bill, figuring I could take the quarters in the change and add a dollar to tip ~$1.50. After waiting a reasonable amount of time I gave up and left, assuming that they figured I had meant to pay only $10 and that that was in line with what they were used to customers tipping.

                    Unfortunately, I have never seen Zagat or anyone else doing a study of tipping explain their methodology in detail.

                    1. re: bigwheel042

                      Crazy. I always tip 20% at those pho places...or thai places, etc...

                      To go burritos and such, yeah, that's usually much less though. But for sit-down dining where someone takes your order?

                      Interesting idea I guess.

                    2. re: BacoMan

                      If the waiter made $50/hour I'd still tip my usual 25% if the service is good.
                      How much he/she makes is irrelevant and none of my business.

                      1. re: latindancer

                        >If the waiter made $50/hour I'd still tip my usual
                        >25% if the service is good.
                        >
                        >How much he/she makes is irrelevant and none
                        >of my business.
                        >
                        do you tip for good service in Europe?

                      2. re: BacoMan

                        I'm sure this is a dumb question, but: Who ends up with the 4% service charge, the waitstaff or the owner?

                        1. re: SimSportPlyr

                          Traditionally, restaurant surcharges are the property of the restaurants while tips belong to the service staff. But it's a complicated issue that may involve the wording on the menu as well as various court decisions in different states. And if the restaurant charges a service charge for "parties of 6 or larger", why would you penalize a server assigned to a table with six people by not distributing the service charge?

                            1. re: nocharge

                              noncharge, your 'why would you penalize...' question is rehtorical, right?

                            2. re: SimSportPlyr

                              Actually, I believe, in SF, it is the back of the house (cooks).

                                1. re: BacoMan

                                  The SF surcharge goes to the house. It's promoted as a way to offset some recent mandates in the areas of providing employee health care. The only issue has been whether some restaurants have misrepresented the surcharge, e.g., by not paying out enough money for healthcare if the surcharge was represented as a healthcare surcharge. Easy solution: Just call the surcharge "SF mandates" and it could cover just about anything including garbage collection.

                                  1. re: nocharge

                                    It was discussed *extensively* last year on the SF board.
                                    http://chowhound.chow.com/topics/8878...

                            3. re: c oliver

                              <I've always understood that 'tipping in restaurants is to make up for the low wage'>

                              Says whom?
                              I don't care how much their wage is…
                              My tipping is for service.
                              Nothing else.

                              1. re: latindancer

                                I'm just saying that in many countries "service" is included and one would normally just leave some 'small change.' Unless it superior then add more of course.

                                1. re: c oliver

                                  Right.

                                  My foreign friends think I'm slightly insane for leaving the tips I do.

                              2. re: c oliver

                                There's nothing about the "tip credit" idea that includes the concept that consumers should individually adjust their tips to help ensure that waiters hit the target of making minimum wage, but not more. The tip credit idea assumes that consumers tip however they tip, which can be highly variable from one period to the next.

                                Fundamentally, the tip credit is designed as a way to lower the minimum wage so the restaurant industry can keep wages lower. The argument behind it is that since waiters earn tips, owners shouldn't have to also pay full minimum wage.

                                When the law was originally passed, Congress agreed that this minimum wage could not go below 50% of the Federal Minimum Wage. Then in 1996 because of lobbying by the restaurant industry, Congress let that agreement lapse, and the current tip minimum wage is 29% of the federal minimum wage. With the Federal minimum wage potentially going up again, this issue is also coming up again.

                                There have always been issues with reporting of tip revenue. I know someone back in the 1980's in CA who was forced by her employer to report higher tips, so that he wouldn't have to make up the lost income -- on threat of losing her job. But she spent years making less than minimum wage because she wanted job security.

                                The tip credit is fundamentally about giving restaurant owners the ability to pay restaurant workers less money. There's no morality clause which says that tippers should contribute to this by adjusting tips to ensure that restaurant workers don't move out of lowly-paid status.

                              3. re: BacoMan

                                Per Zagat's survey, people in SF tip on average 18.4% vs. 18.5-18.7% for other West Coast cities.

                                I'd say that's well within the margin of error, especially given that they don't ask whether that's before or after tax.

                                1. re: Robert Lauriston

                                  :-).

                                  Thanks for this.
                                  I didn't think tipping customs were any different in SF than the rest of the west coast.

                            4. These owners don't expect to get goods from wholesalers at less than the cost to produce them. They don't expect electricity, gas or water at less than it costs to produce it. That wouldn't be sustainable in the long run.
                              .
                              Why do they expect to get human labor at less than the cost it takes to produce that? That labor model isn't sustainable. There are the costs of rent, food, raising a family, healthcare, taxes, making a reasonable profit for your labor, etc.

                              32 Replies
                              1. re: Antilope

                                Because of the tipping system? And the ability to make far more money in tips than is possible with a basic wage?

                                1. re: BacoMan

                                  If this system is so good, let's introduce it to other retail locations. Make sure to tip the clerk for your groceries (add 20%) and tip the greeter at Walmart.

                                  1. re: Antilope

                                    <tip the clerk for your groceries and tip the greeter at Walmart>

                                    What service are they providing?

                                    1. re: latindancer

                                      You don't consider someone bagging your groceries a service?

                                      1. re: BacoMan

                                        I tip them when they'll take it…most can't or won't.

                                        I don't consider a greeter at Walmart a service.

                                        1. re: BacoMan

                                          Grocery store workers are mostly unionized. Since they can strike when they don't feel like their pay is up to snuff, at a moments notice, without any regard to anyone else, I don't feel tipping them is appropriate.

                                          1. re: BacoMan

                                            Not when they are making $18 an hour to bag my groceries!! (YES, that is what baggers in L.A. make, thanks to their UNION!!!)

                                            1. re: PotatoHouse

                                              Are you absolutely sure about this, PotatoHouse?

                                              I usually market at a nonunion store so my visits to the union ones are minimal.
                                              I had no idea.
                                              They're also receiving benefits?

                                              1. re: latindancer

                                                Yes, I was an over the road truck driver and I was in L.A. in the late 1990's when the baggers went on strike because along with their union-mandated $18 an hour wage, they didn't want to have to pay anything for their health care insurance.

                                                    1. re: BacoMan

                                                      Not sure what you're implying......

                                                      But as bagging groceries is about as unskilled as you can get while working retail, I am aghast as well....

                                                      1. re: Dirtywextraolives

                                                        Why are you aghast at people making a living wage?

                                                        1. re: Papuli

                                                          Hmmmmm, $18 to put groceries in a bag....no skill required.... Perhaps if they didn't put raw chicken in with the produce I wouldn't feel like it was an inflated wage.....

                                                          1. re: Dirtywextraolives

                                                            But why is it a problem for people to make a living wage?

                                                            1. re: Papuli

                                                              I have no problem with people making living wages. They are all around me in my city. What I have a problem is people making inflated wages for doing unskilled labor.

                                                              1. re: Dirtywextraolives

                                                                Dirtywextraolives,

                                                                The real issue is that everyone who works 40 hrs/week should be earning a living wage (not just union workers), and the scale for more skilled types of jobs should scale up from there.

                                                                The idea that people can work a 40 hr/week job and still need taxpayers to pay for food stamps and other government subsidies is ridiculous.

                                                                Mr Taster

                                                                1. re: Mr Taster

                                                                  The idea that people can work a 40 hr/week job and still need taxpayers to pay for food stamps and other government subsidies is ridiculous.
                                                                  --------------------------------------------------
                                                                  Completely agree with this statement and a very simple, basic solution exists: government needs to let all of us keep more of our own money.

                                                                  1. re: Dirtywextraolives

                                                                    Let's do the math.

                                                                    Someone working 40 hours a week earning $8/hour, and who is allowed to keep 100% of their taxes, is making $16,640 per year. That's $1,386.67/month. My 1 bedroom apartment costs $1,150/month, and that's because I've been in a rent controlled building for 10 years. (Market value starts at $1,600-$1,800). 2 bedroom apartment starts at $2600. And these are crappy mid-century dingbat apartments, without dishwashers and central air. These are not luxury flats.

                                                                    Just looking at rent alone, I don't see how this person could possibly afford to live in Los Angeles as a restaurant server at this minimum wage.

                                                                    Now, if that same person were making a minimum of $18/hour and allowed to keep all of their taxes, then we're talking about an actual, honest-to-goodness living wage ($37,440 actual cash to spend, or $3,120/month). But then we have that pesky problem of roads and bridges collapsing, inability to pay for police and firemen, and our educational system deteriorating further.

                                                                    Mr Taster

                                                                    1. re: Mr Taster

                                                                      Thanks for offering to do the math for me, it was never my best subject. Are you available to help my kids with their homework?

                                                                      I'm not sure what your point is, and if you really want to get into a brass tacks socio-political economic debate on Chowhound with me, I'm up for it but somehow I don't think that will fly with the moderators here.

                                                                      But here's my simple response, without getting too political about it. Lets just keep it local and leave the feds out of it for a minute....If the LA city and county, along with the Einsteins up in Sacramento would allow my family to keep a bit more of our hard earned money....that would leave a lot more money in my pocket to spend in my community. And I would be able to leave a much bigger tip for the waiter/waitress on an $80 bill for lunch for four people. I do not under tip nor stiff my waitstaff. I used to be one of them, so I am extremely sympathetic to their economic plight, and the increasing cost of living here in LA.

                                                                      1. re: Dirtywextraolives

                                                                        I understand your perspective. It's great in theory, because it empowers each individual to affect change. But in the end, your generosity is just one person's effort.

                                                                        In order for that system to work effectively (to the point where a livable wage for everyone is ensured), *every singe customer* needs to contribute their fair share. With human nature being what it is, that's just not going to happen.

                                                                        I wish it were different, but we have 30 years of stagnant wages as proof that the the whole "trickle down" thing just doesn't benefit unskilled workers in any lasting or meaningful way. The trickle is all but dried up by the time it reaches them.

                                                                        Mr Taster

                                                                        1. re: Dirtywextraolives

                                                                          Taxes pay for civilization. The evidence of our short-sightedness on this point is all around us, from the decaying schools to the decaying climate.

                                                                          Laissez-faire sounds great in theory, but in practice is a disaster.

                                                                          1. re: Josh

                                                                            Ya, since there was no such thing as civilization before 1913..... Mmmm hmmmm.

                                                                            Funny how much $$$$ we throw at our decaying schools and yet, they are still......decaying. Wonder how that works.

                                                                            Yes, and the millions of immigrants who risk their lives to cross our borders think this place is a disaster too. Yup.

                                                                        2. re: Mr Taster

                                                                          Add about 1,000 more entitlements to that, including pensions for county workers, and you're on the right track.

                                                          2. re: BacoMan

                                                            <Too much for the peasants eh?>

                                                            Might want to try and stay on point Baco…it helps with credibility when introducing subjects to lawmakers.

                                                            I can't count the number of times the same bagger where I shop, who's been working the same job for over 10 years, needs to be continually told not to put soft items under heavy items. But, he's union so he's not going anywhere soon.
                                                            Yep. Insane.

                                                            1. re: latindancer

                                                              It is on point.

                                                              You only tip in order to feel superior to the Plebeians who serve you.

                                                              And then you get upset when people actually make a living wage because it might elevate them above slave status.

                                                              I find it hilarious.

                                                              1. re: BacoMan

                                                                <You only tip in order to feel superior to the plebeians who serve you>

                                                                Really?

                                                        2. re: PotatoHouse

                                                          I would like to see evidence of this $18 an hour claim. I asked my bagger yesterday how much he made and he said $11 an hour.

                                                          I also looked at the median salary from online sources and it was around $12 an hour in CA.

                                                          1. re: BubblyOne

                                                            <I would like to see evidence of this $18 an hour claim. I asked my bagger yesterday how much he made and he said $11 an hour.

                                                            I also looked at the median salary from online sources and it was around $12 an hour in CA.>

                                                            Yes, Potatohouse's "I was an over the road truck driver and I was in L.A. in the late 1990's" has been taken as absolute fact, and as if it is current information. Being a retail clerk used to be a comfortable living, buy a house, drive a decent car type job. But baggers always started at the bottom of the payscale, nowhere near $18/hr. In the early 2000's the grocery strike basically broke the union. The pay for any new employees was drastically reduced, and the pay for experienced employees practically frozen. Here is the near current payscale http://www.ufcw1167.org/pdf&#39;s/Sta... Everyone can sleep well tonight, baggers top out at $8.75/hr. Good luck paying for gas and rent and union dues with that!

                                                            1. re: aimeekm

                                                              Thank you. I asked my favorite checker (NOT BAGGER) today and she is making $20 an hour after 18 years.

                                                              I was also told that bagger jobs have the most turnover due to the low pay.

                                              2. re: BacoMan

                                                Are you defining "minimum wage" as a "basic wage"? No one can live on a minimum wage be it CA or ND.