How a New York Restaurant Eliminated Bad Tippers

It has been a fairly standard practice in much of the Western world for hundreds of years to tip members of the service industry, or gift workers an additional amount of money beyond the cost of service as a way of showing gratitude; a gratuity. But what exact percentage is the acceptable bare minimum to leave? Does that vary depending upon the quality of service or professionalism shown? What about when workers pool tips and split them evenly, despite not necessarily working equally? What happens when a server is taxed for tips they may not have even received?

When did tipping get so complicated?

Apparently tipping became a standard practice in 17^th Century Europe. When immigrants brought the practice to the United States, it was met with controversy.

“Tipping, and the aristocratic idea it exemplifies, is what we left Europe to escape,” William Scott wrote in his 1916 anti-tipping screed, “The Itching Palm.”

Then in 1966 the Fair Labor Standards Act was amended to include a below-minimum-wage provision for workers and a tip credit for employers. Effectively what used to be a gift became taxable wage. Since 1991, the federal minimum wage for tipped workers in the United States has remained at $2.13 per hour, despite a significant increase in cost of living expenses.

In addition to shortchanging workers who spend long hours on their feet serving others, employers have cottoned on to the trend of tipping creating a culture of competition amongst co-workers, when their businesses would benefit greatly from a cooperative team effort. An increasing number of restaurants across the country are switching to an anti-tipping model, in which a flat gratuity charge is added on to every customer’s bill.

Shake Shack in New York, owned by Danny Meyer, is the latest restaurant to move in this direction. Meyer cites quality of life of his workers as a primary motivating factor.

“We believe hospitality is a team sport, and that it takes an entire team to provide you with the experiences you have come to expect from us. Unfortunately, many of our colleagues — our cooks, reservationists, and dishwashers to name a few — aren’t able to share in our guests’ generosity, even though their contributions are just as vital to the outcome of your experience at one of our restaurants,” said Meyer in a public letter. “By eliminating tipping, our employees who want to grow financially and professionally will be able to earn those opportunities based on the merit of their work.”

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