I Wish All Restaurants Would Move To A Gratuity-Free Model

The last two times my husband and I have gone out to a nice dinner, we’ve noticed a little blue icon on the bottom of the restaurant menu that says they are now a “Gratuity-Free Restaurant” and a note that explains what that means. Essentially, these restaurants charge a little bit more than they used to, pay their employees a fair wage and benefits, and tell people not to bother with tipping.

I think it’s brilliant.

When I was in college, a friend of mine worked as a waitress. Her base pay was $2.75 per hour, and the rest of her wages were expected to be made on tips. Now, this was Iowa 20 years ago, but the current tipped wage in Iowa can still be as little as $4.35 per hour.

I had never worked in a tipping business, so I had no idea how this worked. Employees who can expect tips don’t have to be paid minimum wage — or rather, they can have a certain amount of their hourly wage deducted from the tips they make if they make more than the federal minimum wage including tips.

The federal minimum wage for tipped earners is $2.13 per hour for employees who make at least $30 in tips per month. If a worker doesn’t end up making the minimum wage of $7.25 with their tips, the employer must make up the difference. So waitstaff does make minimum wage — but not minimum wage plus tips. And then they have to pay their own income taxes, Social Security, and Medicare taxes out of those tips.

The system is wacky, to say the least.

It strikes me as a much better idea to just ditch the whole tipping system and pay waitstaff a straight, fair wage. Some might wonder if that would remove the incentive for servers to provide good customer service, but I doubt that’s true. Good customer service has much more to do with hiring practices and the culture a restaurant creates for its employees than incentives from tips. We can get good customer service at department stores and grocery stores, and there’s no tipping involved there.

Gratuity-free models also work out more equitably for the kitchen staff, who often get stiffed when it comes to tips. Why do we tip the servers and not the people who actually cook the food? Or the people who wash the pots and pans and dishes? Some restaurants split tips, but then everyone is riding on the performance of the waitstaff, or the kindness and generosity of the patrons. It all just seems like an unnecessarily complicated system.

And a gratuity-free dining experience is easier on the customer too. Who enjoys having to analyze how perfectly your server waited on you and figure out a tip accordingly? I imagine most people don’t do that anyway — unless the service was truly terrible, most of us just add on a customary 15–20% automatically. And if we’re already doing that automatically, I’d rather pay a little more for the food and not have to deal with it.

At first, it felt a little odd to not leave a tip, like I was forgetting something important. It’s such a customary habit for us here in the U.S., but that’s not the case around the world. In some countries, tipping is never expected. In others, it’s not as automatic or generous as it is in the U.S.

That’s not to say that I don’t support tipping. I absolutely do, and I have no plans of stopping at establishments that still follow the traditional bill-plus-tip structure.

But I think there’s a better way. I say, let’s ditch the tipping model and move to a straight-forward, pay-for-the-meal, everyone-gets-a-reasonable-(living)-wage system. I think it would work out better for all parties involved.