When I waited tables at a fast-casual national chain restaurant in college, we were told in training that the tipping system was designed to "to insure proper service (TIPS)." It was written in the restaurant's training manual that way. When one of the trainees pointed out that the right word was ensure, not insure, it threw the trainer for a loop. But the point is, tips don't ensure proper service, nor are they some sort of insurance premium paid to ward off poor service. They are simply customary in our country, and they have become a way for restaurants and other service industries to put the responsibility of a worker's salary on the customer.

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There has been increasing debate about doing away with tipping in the United States, with the the salary of the wait staff be paid by the restaurant, not the customers. Often, what's first mentioned in these conversations is that restaurants would have to increase menu prices in order to do so. At first thought, it seems it shouldn't matter because it should come out even. Paying 20 percent more for your food and drinks or paying a 20 percent tip basically equals the same amount out of your wallet. But, it's not that simple.

On the customer end, the sticker shock of raised prices might be unappealing. Not only is the customer paying more for the meal, the control he had over how much to tip, is gone. On the restaurant end, it gets more complicated.

Just how complicated it gets was thoroughly laid out by Ryan Sutton in Eater earlier this week. New York City restaurateur Danny Meyer is eliminating tipping at all 13 restaurants within his Union Square Hospitality Group, including Gramercy Tavern. He's starting with a two-month trial at The Modern with a system he's calling "Hospitality Included." There will be no line for a tip on guest checks or credit card slips. The menu prices will go up significantly, more than the 20 percent suggested above.

The reason for the change

cooks in a restaurant kitchenOften the workers cooking a meal don't make nearly as much as the workers serving the meal. (Photo: Lars Plougmann/flickr)
Without any further information, it might seem that Meyer is trying to make money off this deal, but he's not. His intention is not to just eliminate tipping and pay his wait staff a higher hourly wage; his intention is to pay all the workers in his restaurant — from the wait staff down to the bussers — an equitable hourly rate or salary. Staff who work under the current tipping system will now be given minimum wage, plus have their "base income fortified by a revenue share program." If all goes according to plan, no one should end up bringing home less money than they currently do and many employees will end up making a better wage.

A 20 percent increase in menu prices would cover only an increase in the hourly wage of the wait staff plus the revenue share program. Meyer's system is designed to make sure the person cooking the meal is paid as equitably as the person serving the meal, so he needs to increase menu prices accordingly.

I can imagine what's going through many people's thoughts as they read this.

  • If a wait person is guaranteed to make decent money, what motivation will he have to give superb service?
  • I don't want to pay more for my food and end up getting bad service at the same time.
  • Some of the very best servers may end up taking a pay cut, despite the revenue share program.
  • Why should the hardest working servers be paid the same as the ones who slack off?

The plight of some restaurant employees

waitress returning change to a customerWith new "Hospitality Included" menus, there's no line on the bill for tips. (Photo: CandyBox Images/Shutterstock)
I understand the concerns, but they also take a very narrow view of what's happening here. The person who wants to keep his restaurant bill down while knowing many of the staff at the restaurant are being paid poorly is certainly only thinking of his own interests. How poorly are many restaurant employees being paid? Almost 15 percent of the 2.4 million waiters and waitresses in America live in poverty, according to the Wall Street Journal. Many of them are on public assistance. If Meyer's "Hospitality Included" program works the way it's designed to, all the workers in his restaurants will be earning an equitable wage.

The concern about some servers making less money than they currently do is one I would have had as a waitress all those years ago. I made good money. I worked hard and often made more per week than management. I would hope that a good restaurant that eliminates tipping will find a way to make sure the best staff remains properly compensated so it doesn't lose valuable employees. It's something that individual restaurants will have to figure out, but keeping everyone else's salary below fair so a select few can continue to earn a lot of money is not a good enough reason to keep the tipping system in our country.

These are issues that Meyer is willing to risk. He's taking a lead in the industry to try to change a system in which many employees are not paid fairly. If he sees success, it could be the start of a larger movement in the restaurant industry to eliminate the tipping system.

I need to give credit to Eater's Sutton for his well-written, in-depth article on Meyer's new policy. There's more to Meyer's choices than making sure everyone earns a decent wage, and Sutton explains it clearly (including how upcoming changes in New York's minimum wage influences Meyer's plans.) I encourage you to read the piece.

I don't know if Meyer's plan is the right way to fix the problems, but it seems like he's designed it with the best interest of all his employee's in mind. It has a shot of being the beginning of real change. My question to you is, when you look at the staff as a whole, and not just at those who serve your meals, do you see Meyer's new "Hospitality Included" as the type of change the restaurant industry needs?

(If you'd like to understand more about the problems of low-paid restaurant staff, I recommend you read People for the Ethical Treatment of Restaurant Workers, originally published in Edible Philly magazine.)

Robin Shreeves ( @rshreeves ) focuses on food from a family perspective from her home base in New Jersey.

Will nixing tips help more workers in the long run?
Danny Meyer will significantly raise prices at all his NYC restaurants to make sure that everyone makes a fair wage.