TIPPING POINT

by Norma Vavolizza

We all love great service when dining out, but how much are we willing to pay for it? What’s fair to server and guest alike?
These questions are especially vexing when it comes to the way foodservice workers are compensated. According to the Bureau of Labor Statistics, median annual pay for waitresses and waiters is $31,040, subject to variables such as location, menu, hours worked, and the like. In addition, benefit packages vary. Flex time may be more common than not, but health insurance isn’t a given.

Federal and state laws play a big role in foodservice wages. Most states allow restaurants to pay their waitstaff a sub-minimum wage. Federal law sets the base tipped wage at $2.13 per hour as long as tips raise the total to the standard minimum wage which is currently $7.25 per hour (unchanged since 2009). Many states require a higher base wage while still allowing sub-minimums. And several jurisdictions have minimum wage rates that far exceed federal law, New York City being one at $17 per hour.

Regardless of this patchwork system of compensation, tips in the restaurant business are nearly universal—and complicated. Regardless of where they live, workers need to be compensated fairly and tips are a lifeline. At the same time, how do you argue with someone who says a 20% tip on an $800 meal for two does not require any more service than a $400 meal for the same two people? The $800 table just happened to order more expensive food and wine.

While calculating our tip, it’s good to remember that service at many restaurants—not just the ones with a Michelin-star— is usually the result of intensive and ongoing staff training (“Where did the chef source today’s organic mushrooms?,” the diner wants to know). A knowledgeable staff contributes to the overall dining experience. Then, as food and beverage costs go up with inflation, a tip percentage automatically adjusts. This helps preserve the waitstaff’s purchasing power, and allows the restaurant to continue delivering the expected high level of service with less staff turnover.

Admittedly, there are still structural problems with tipping as we practice it that can’t be overlooked. Tipping benefits workers in high-end restaurants and disadvantages those working in diners. Also, research shows that tipping amounts can be influenced by race and gender and also whether a server is perceived to be attractive or not.

So is percentage-based tipping ethical and fair? The conversation continues. As of this calendar year, eligible foodservice workers can deduct up to $25,000 in qualified, voluntary tips from their federal income tax. Workers who earn their living in diners, luncheonettes, and no-frills coffee shops aren’t complaining. As for me, I’ll stick with 20% and when the tab is modest, I’ll tip generously. Someone’s health insurance may depend on it.

This Ethical Times post is presented by the Westchester Community for Ethical Culture.