Should we really have to give tips to those who serve us?

Tipping waitresses and waiters has been going on for a very long time. In some cases, tipping should be done when the services has been exceptionally good. But should it be done if the services are simply mundane?

Restaurants in Ontario, Canada may have to cross out the 20 per cent gratuity that is automatically added when there are parties of six or more being served in restaurants if a bill proposing the elimination of automatic tips gets passed at Queen’s Park. (Ontario Legislature) Bill 81 or the “Elimination of Automatic Tips Act, 2010” was brought forth by Liberal MPP David Caplan. A transcript of parliamentary proceedings had Caplan introducing the bill on May 20, 2010.

Eliminating Automatic Tips, (EAT) prevents restaurant owners from charging automatic service charges in restaurants across Ontario.

The legislation has one exception. It excludes private functions and banquets. In this case, restaurant owners and operators would still be able to charge automatic service charges when dealing with private gatherings and banquets. At the time of this writing, Caplan’s bill is still in its early stages.

There is no doubt that his bill before the Ontario Legislature is going to spur debates among patrons and those working in the hospitality industry. The issue is, should tips only be given out for exemplary service or are they a mandatory amount given to servers who do a crappy job when they serve us—even when they’re serving six or more patrons?

The state of Maryland has a law with respect to automatically tipping in their restaurants. Offending restaurants would face a fine of up to $5,000 for adding an automatic tip onto checks for parties of fewer than 10 people under a bill introduced in its General Assembly.

The bill’s sponsor, Cheryl Glenn, said she’s not opposed to tipping for good service. But the Baltimore City Democrat decided to sponsor the bill after being served several meals in which the service wasn’t up to par, yet the restaurant tacked on a tip, anyway. She said that in some cases the restaurants added a tip for groups well below 10 people.

“I think it’s a consumer protection issue,” Glenn said of House Bill 1339, under which restaurants would get a warning for a first offense, a fine of up to $500 for a second violation and a fine of up to $5,000 for a third or subsequent infraction.
The Restaurant Association of Maryland has come out strongly against Glenn’s bill, saying that restaurants should be the ones to decide whether to impose an automatic tip and on how large a group. Not all restaurants do it, and those that do, make their policy known by including it on the menu, said Melvin Thompson, the restaurant association’s vice president of government relations. He said, “We don’t think a threshold is a good idea because one size does not fit all. We believe it should be the individual restaurant’s option.” Glenn on the other hand responded by saying that an automatic gratuity could keep waiters and waitresses from providing good service if they know they’re guaranteed a tip.

Houlihan’s restaurant in Elkridge, Maryland, add a 20 percent gratuity to bills for parties of eight or more, and lets people know of its policy on the menu. The restaurant didn’t have such a policy when it opened in 2007, but found some large groups were leaving miniscule tips or none at all.

But Julie Stevens, a co-owner of Houlihan’s restaurant, said it’s also a matter of fairness to servers — who depend on tips to make a living — so they don’t get stuck with little or no tip after working hard to serve a large party. Stevens said who opposes the bill said, “The tip goes to the server. It doesn’t go to us. It’s strictly a way of protecting the servers.”

From a restaurant's perspective, it makes some sense: waitresses and waiters depend on gratuities as a major part of their income, and when they get stiffed, it makes a significant difference in their take-home wages. That said; tacking on the tip for you takes away part of the diner's control, leaves less room to leave a gratuity that reflects the diner's experience, and, some would argue, disincentivizes good service.

In the USA and Canada, most waitresses, waiters and bartenders in restaurants are paid at the minimum wage, because the employees are expected to make up the difference, so to speak, in tips. This means that a server could earn far above minimum wage on a good night, or hardly break even on a slow night. Servers are even expected to pay income tax on the tips we give them, tips that are truly part of their normal wages for the job they do, not just ‘extra’ money for them.

Some restaurants in the U.S. pay their servers as low as $2.13 per hour. This base wage varies among states, for example, Massachusetts pays $2.63, Connecticut $5, and California $10. It is acceptable to leave a smaller % in tips in states where servers are paid well at a base rate and a higher % in tips in those states where owners of restaurants that pay their servers a smaller base rate. Service is almost never included in the bill. If it is, it will say ‘Gratuity’ with an amount next to it. It is customary, unlike much of the rest of the world, for your service to not be included.

All 50 states have different minimum wage laws. Some allow employers to pay less than the state's minimum wage to tipped staff, others do not. Federal employment compensation law requires that if employers pay less than minimum wage, tips must bring compensation up to the minimum wage or the employer must make up the difference. Therefore, no server legally makes below the federal minimum wage in the U.S. regardless of the amount of tips received.

It is obvious that restaurants who demand that its customers pay tips to its staff are doing so because they want their customers to subsidize their staff instead of the restaurants paying their staff decent wages. The owners of those kinds of restaurants don’t want to raise the cost of their meals in order to pay their staff a decent wage because they know that this will turn off the customers who will then eat their meals somewhere else.

Thompson, of the Maryland Restaurant Association, said that Bill 1339 isn’t necessary because restaurants aren’t likely to make a fuss if a customer doesn’t leave a tip. To the contrary, if a customer complains about an automatic gratuity, a restaurant likely would take it off the bill in an effort not to lose future business.

While the restaurant association opposes a curb on automatic gratuities, it supports another measure, House Bill 1186, that would end the state sales tax that restaurants are required to collect on automatic gratuities imposed on parties of 11 diners or more. The bill is sponsored by Kumar Barve, Democrat Montgomery, and Pat McDonough, Republican Baltimore and Harford counties. Thompson said that many customers don’t even realize restaurants are required to collect such sales tax and question the item on their bills.

I can see getting rid of the mandatory tip because it doesn't exactly motivate the server to work extra hard for a big party if 18-20% is going to be automatically tacked on at the end; even if the service was bad.

Admittedly, large parties tend to stay longer, eat up more of the server's time, and often involve another server as backup. Then there's all the bad diner behavior that's magnified in large groups like asking for something one visit at a time instead of all at once, making ridiculous substitution requests, and lingering over one cup of coffee.

I guess you can't win either way but I'd probably err on the side of the waitresses and waiters since most servers aren't exactly rolling in dough and getting stiffed would be devastating; whereas the Edmonton Oilers probably could afford an extra $2,500 as tip if they've already racked up a $15,000 restaurant tab and they are each personally rich and can afford paying such a large tip.

There are some situations in which we'd expect an automatic gratuity—say, a party of eight at a restaurant on New Year's Eve, or a birthday party at a crowded restaurant on a Saturday night. But increasingly in New York, there are restaurants tacking on tips for parties as small as 4 or 5, and Ace Hotel in New York City has been adding a 18% gratuity to every single drink served at the bar.

If you must leave a tip, always leave tips in cash and hand them directly to the person you are tipping, whenever feasible. This way, the right person is rewarded, and that the establishment itself cannot skim a portion of your tip by assessing the employee a percentage of what you tipped on the credit card. Further, your tip will be even greater when you consider the interest you will pay on your credit card.

Many places are legally able to do this now, so, unless you absolutely need to charge the tip for business reasons, a cash tip is almost always better for the people giving the tips. Of course they can also under-report their earnings to the taxman if they choose to do so, but no one would ever condone such action.

Many staff in Las Vegas are unionized, with benefits and high wages as well as getting tips. These few are at the top of the industry and can make a six figure income. Tips are expected regardless of what state or province you are in or what wages the staff are paid. For better or for worse, tipping has become a part of most hospitality worker's pay.

Tipping in the USA is something you get the hang of after you do it a while. After a couple of days, you'll be able to gauge when you receive stellar service, or whether someone is ‘phoning it in’. If you are mistreated anywhere, you must inform a manager. Don't tip poor service. Let someone know you were unhappy, even if you just leave a note to the server as to why there is no tip added to the bill.
Restaurants with table service: Tip 15% of the bill, based on the quality of service. If you receive exceptional service, 15-25% is customary. In most major cities of the U.S. and Canada however, 20% is considered to be a "good tip".

Unlike many countries, service is usually not included in the bill with the exception of large parties (typically six or more people). If you're with a large party, be sure to check your bill just in case. 15% - 20% is often automatically charged for a large party (six or more). If the tip is included, the breakdown of the bill will read "gratuity", which means that a tip is already included. As always, if you feel you did not receive 15% service, inform the management before paying your bill and have it adjusted to the adequate amount.

A good rule of thumb when calculating a table service restaurant tip is to ignore sales tax and liquor, and, for good service, calculate 15% of the food bill. Add 20% if the service was outstanding, especially prompt or friendly or the server fulfilled many special requests. On very large bills, the percentages can be slightly smaller; on fairly small bills, slightly higher. So, on a $150 food bill, you might tip $25 (16.7%), while on a $25 food bill you might give the server $6 (24%). Liquor bill tips, if the amount is substantial, should be split between the server and the bartender. Liquor service tips can be included in the total tip amount, as long as you make it clear what/who it's for.

At very fancy restaurants, you should tip the bar tender separately, at your discretion. Otherwise, since restaurant liquor is an extremely high-profit limited-labor item, you can also choose to not tip for it. But individual drinks you are served at a restaurant bar should always earn a $1-2 tip each. However in most restaurants now the server has to pay back a portion of there sales to tip out the bartender, busboy, hostess, etc. In Florida it is usually 3%, so the tip should be based on the total bill before tax.

In most states in the U.S. and provinces in Canada, the sales tax is applied to the bill and is clearly indicated as such on the bill. In those states where the tax is 5% (Massachusetts as an example) or 6% it is simple to calculate the tip by rounding the tax up or down to the nearest dollar and then multiplying by three.

It is worth mentioning that New York restaurants have started adding automatic gratuity even though the number of people eating is far less than 6. Even with a group of 3, gratuity of 20% seemed to be automatic both in restaurants and in 'pubs'. It is important to always check one's bills. You can get around this by each person asking for his or her own bill.

Some people will say that buffet restaurants with limited table service, a tip of 10% to 15% of the bill is still recommended because the servers typically work harder keeping the buffet line stocked and clean, and often provide table service for drinks. I disagree with that suggestion. If the staff are paid a decent wage, there is no need for the customers to subsidize the staff of the restaurant just because the owner is too cheap to pay his staff a decent wage. An exception should be made for exceptional service but quite frankly, I haven’t seen exceptional service in restaurants very many times. When I have been served exceptional well, I don’t have a problem leaving a tip.

Counter service/fast food restaurants often have tip jars out, but you are not required to tip. If the service is exemplary or unusual requests are made, then tips are appropriate.

When my wife and I took a cruise on an American Holland cruise ship, we were informed ahead of time that an automatic gratuity would be taken from our credit cards so that all the crew on board would be given extra money for their services to the passengers. By crew, this included the electricians, the laundry staff, the dishwashers etc. I balked at this automatic withdrawal of money from our credit cards. In the past, we generously tipped the waiter who was the same one every night who served us at the dining table and we tipped the man who cleaned up our room every day. I wrote the vice president of the line and complained. I receive a letter back saying that the tipping was optional and that we could let the staff at the main desk in the ship know this. When we got on board, we were given a form to sign and the gratuity was not taken from our cards. As before, we gave tips to the waiter and room cleaner.

As I see it, if waiters and waitresses want to work for substandard wages in restaurants, that is their business. They shouldn’t expect to have their earnings increased by getting tips from their customers unless their service is exceptionally good.

In most restaurants, you see your servers nine times. The first time is when they bring you the menu. The second time is when they take your order. The third time when they bring you your main meal, the fourth time when they take your order with respect to your desert. The fifth time is when they bring you your desert. The sixth times is when they take your order for coffee, the seventh time is when they bring you your coffee. The eighth time is when they bring you your bill, and the ninth time is when they bring you your change.

What is so difficult in that kind of work that merits a tip if there was nothing done on your behalf that was out of the ordinary and especially if the service was really slow?

I will give tips if the waitresses or waiters have gone out of their way to serve me but if the service is mundane, then I will pay the bill and leave the tipping to some fool who thinks he or she has a duty to subsidize waitresses and waiters who are willing to work for the owner of a restaurant who pays his staff low wages.