Until the federal minimum wage is increased, automatic gratuities are the only protection servers have against losing money by going to work. Let me explain why.
Since 1991, the federal minimum wage for restaurant servers has been frozen at $2.13 per hour. While the federal minimum wage for every other occupation has risen several times, restaurant servers have been excluded. This is because tipping is such a recognized custom that it has been codified into law that a server is expected by the government to receive a tip. Anyone who has ever been a server knows this is not always the case.
While the cost of most everything has increased substantially since 1991, restaurant companies have benefited from this low and stagnant pay rate. Restaurants have passed this benefit on to consumers in the form of prices that have not kept pace with inflation. Restaurants and guests have further benefited from classifying many positions as “tipped employees.”
What many guests do not know is the employees who fill their water glasses, make their drinks, bring their food and clear their tables are also receiving that low minimum wage. A majority of their income is derived from a portion of the servers’ tips.
The cumulative effect of these sub-minimum wage positions subsidizes the price of a guest’s meal. If the hourly wage of all of these employees was raised to the full minimum wage, menu prices would increase substantially. If the federal government and restaurant companies are allowed to pay wages based on the expectation that a guest will tip, then it is only reasonable that the expectation be mandated.
A majority of guests uphold the expectation of a tip. Some still do not. While this is often a reflection on the service they received, many times it is not. Out-of-town guests may not see the need to tip at a restaurant they will never return to. A guest may dislike a restaurant’s policy on an issue and decide they should spend no more than they are obligated to. An intoxicated guest who is denied service may refuse to tip out of spite.
Regardless, the result is the same. The guest still enjoys the subsidized price on his or her meal. The server must pay his or her co-workers out of pocket.
There is no question that a tip should be based upon the service a guest receives. If guests feel the automatic gratuity is too high for the service received, they can address this with a manager. This leaves them the recourse of having the automatic tip reduced. If a guest, in spite of the service received, decides not to tip, the server has no recourse.
Given those options, an automatic gratuity is the option that allows fairness for both parties. No server should have pay for the opportunity to wait on a table.
David Hayden, a restaurant author and blogger, lives in Kansas City.
