As of right now, most restaurants aren’t ready and aren’t planning to go tipless, but it’s the best solution for what’s coming down the pike. Just count on the minimum wage increasing to $15 per hour nationally and for the tip credit to be abolished, thus disallowing restaurants to pay servers sub-minimum wage, anticipating that they will make up the difference in tips. I’m no prophet, but you have to stick your finger in the air and determine which way the wind is blowing, and that’s where it’s blowing.
In a speech in New York in March, presidential hopeful Hillary Clinton sanctimoniously condemned the current practice of tip credits that are allowed in 43 states. If she becomes president, you can expect some action on that front. There’s probably not a restaurant owner out there who is OK with paying servers $15 per hour plus tips while the kitchen staff sweats in the back for $15 an hour with no tips. More than that, there’s probably not be a kitchen worker who is willing to work for a restaurant with that pay practice.
It is precisely because of the rise in minimum wage with the threat of eliminated tip credits that I believe, and experts have told me, we could be in the last decade of tipping.
What to do in place of tipping is what I interviewed restaurateurs about for a no-tipping article I wrote for The National Culinary Review magazine (it will be out in May).
There is a smattering of restaurants out there, especially in states that already don’t allow tip credits, that have gone tipless. I saw a proposition that seems to work well for one restaurant that could serve as a model for others.
At this California eatery, the owner changed everyone’s salary to $15 per hour, increased menu prices 20% and gives out bonuses to all based on sales. The servers get 12% of their individual sales added to their paychecks, and kitchen staff divides 12% between them, based on how many worked the shift. So she’s giving out 24% of sales.
This owner is happy with the structure, and the staff is motivated for the restaurant to make more money so everyone benefits. Thus, the servers do their best to upsell the guest on drinks, desserts and whatnot. I think it’s brilliant.
We are so used to tipping in our culture that we wonder what the problem is, but it’s a foreign concept to many foreigners and is so antiquated. If we can explore Mars, why can’t we explore alternatives to tipping?
There have been consumer surveys about tipping indicating that consumers don’t mind the practice. Sorry. Consumers are not the business experts, are they? If you surveyed servers, they would probably be opposed to eliminating tipping. But they aren’t the business experts either. All it would take is some awesome education and communication and they would get used to it. It would only sting for a little bit, and pretty soon a generation would rise up with no tipping history who would wonder why it was ever done in the first place.
I’m telling the truth. Tipping will go by the wayside in this generation. Mark my words.
Tell me what you think.