Is Banning Tips a Good Thing?

Banning tips

Are banning tips a good or bad idea? IMG: via Shutterstock.

I think it could be. I hate the concept of tipping. Some restaurants actually pay their servers less than minimum wage, because it is expected to be made up in tips. Many restaurants are starting to ban tips and instead, just paying their workers a better wage and increasing the price of all entrees. This means that employees can count on a set amount of money every pay period, and not be worried if one day they make less than usual in tips.

While the US federal minimum wage is $7.25 an hour, wait staff can legally be paid as little as $2.13 in some places. In New York, one of the most expensive US cities, salaries for waiters start at $5.00 per hour.

Riki Restaurant in New York is one of a growing number of establishments eliminating tips by actually 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 by a lot of upscale restaurants, said Michael Lynn, a professor at Cornell University’s School of Hotel Administration.

“American customers tend to not think of the tip as an expense, and they don’t really factor that into their assessment of how expensive a restaurant is,” Lynn said.

If the price of the meal includes the tip, customers will know exactly how much their check will be at the end. This would solve the problem of some waiters being unfairly short-tipped. Some people tip based on how the food tastes or other small things that the waiter has no say in, which isn’t fair to their server. However, that doesn’t mean a waiter shouldn’t be tipped less if they are rude or ignore you the entire time you are there.

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 this from happening to his staff, “We want to ensure that they can pay their bills,” he said.

What are our thoughts on banning tips?


About DevonJ140
I am currently an Accounting Director living in New York City. I love reading and learning more about business, finance, tech, and current events.

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