The US restaurants adopting a no-tipping policy in favour of higher wages

PUBLISHED : Friday, 09 May, 2014, 9:37am
UPDATED : Friday, 09 May, 2014, 9:37am

In the US, diners are expected to add an extra 10 per cent to 20 per cent to their bill at the end of a meal. But some restaurants are now forgoing these tips.

Leaving a gratuity is de rigueur when dining out because pay for restaurant servers is so low. While the US federal minimum wage is US$7.25 an hour, wait staff can legally be paid as little as US$2.13 in some places. In New York, one of the most expensive US cities, salaries for waiters start at US$5 per hour.

For wait staff, tips help bolster pay to match other restaurant workers who don't receive gratuities.

But there is a new trend: Riki Restaurant in New York is one of a number of establishments eliminating tips by taking the unusual step of paying their staff higher wages.

"Riki Restaurant is now a non-tipping establishment," read notices at the popular Japanese eatery. "Tipping is not required nor expected."

The no-tip policy is being adopted especially by some upscale restaurants where clients are less price sensitive, says Michael Lynn, a professor at Cornell University's School of Hotel Administration.

But a downside of the no-tipping policy is the shock that patrons may sometimes suffer when perusing menus that have tips already factored into the prices.

"It makes a restaurant look more expensive than a restaurant that has 15 per cent lower prices, but expects tips," says Lynn, who specialises in issues related to marketing and consumer behaviour.

Folding tips into the meal tab has the benefit of protecting waiters from being short-changed by the occasional tight-fisted diner.

Gabriel Frem, owner of the upscale Brand 158 restaurant in the Los Angeles suburb of Glendale, also sees his establishment's no-tipping policy as a way to protect staff from the whims of diners.

"We interview and hire our employees, not the guest, and we expect to pay them, and be responsible for their actions," he says. "If they do great, we keep them, and if they don't, we let them go.

"We don't want their pay to be at the mercy of a guest's random calculation, based on unpredictable factors."

As it turns out, tipping can vary wildly from guest to guest - and not always because of the quality of the table service.

Some patrons withhold tips because they feel the server was not sufficiently cheerful, as in, "I don't like her smile." Others do so because they didn't care for the food - even if a meal's preparation is not under the control of the wait staff.

It's also a problem, Frem says, if workers don't know how much income they can count on from week to week.

"We want to ensure that they can pay their bills," he says.

Some managers say greater pay security in tip-less restaurants reduces turnover and improves morale.

The tipless restaurant is still a long way from becoming the norm, but some New Yorkers are beginning to warm to the idea.

"At first, I really thought that if a waiter was rude, I would want my discontent to be reflected in their tip," says Noel Warren, a young New Yorker who dines out twice a week.

"But then I thought, why would a waiter be disrespectful in the first place? Probably because he or she has lost faith that customers are going to tip well - so why put in any effort?"

Warren muses that it might in fact be fairer to take the decision about tips out of the fickle hands of restaurant patrons. This might even improve the table service that patrons receive.

"If they were properly compensated for their work, they might treat their customers better," Warren says.

Agence France-Presse