The Tradition of Tipping: Is it Over?

Throwing down 15–20% of our tab at the end of a good meal is as expected and routine as being asked if we want fries with that, but it wasn’t always that way. While tipping servers in restaurants is widely considered beneficial today, its origins aren’t quite as benign. Citing pay inequality and racist beginnings, some local chefs and owners are pushing back against our ingrained tipping traditions, even eliminating gratuity altogether.

“Tipping is a dinosaur, and we’re the only country in the world that has this tipping culture,” says Bryan Dayton, who recently eliminated tipping at his Boulder restaurants Corrida and Oak at Fourteenth. “It’s left over from the slave world; it’s a decadent thing.”

In America, tipping at the end of a meal was unheard of until just after the Civil War, where it was essentially implemented as a way for employers to avoid paying Black workers a fair wage, according to published comments by Saru Jayaraman, director of the Food Labor Research Center at the University of California, Berkeley, and co-founder and president of Restaurant Opportunities Center United (ROC United),who advocates for equalizing wages for tipped and nontipped workers. But let’s go back even further, to when tipping first caught on, in the feudal system of medieval Europe. There, the ruling class would occasionally give extra money to their servants for performing a task extremely well. As a result, the practice stuck around for a while in Europe—tipping as a reward for good service.

Fast forward to the mid to late 1800s, when wealthy, upper-class Americans traveled to Europe and discovered this new-to-them practice. Wanting to feel like European aristocrats themselves, some of those rich vacationers brought tipping back home to the United States, doling out a little extra money to the people who served them at hotels and restaurants. It didn’t catch on. Most Americans were annoyed at being expected to pay a premium on top of the price of their food. They considered it classist, further distinguishing the wealthy from the rest of the population.

But timing is everything. Since this was right after the Civil War, Blacks had recently been emancipated but still had very limited options. Many became servants, waiters, railroad porters and bussers—jobs we now associate with depending upon tips—making very little, if any, money. The responsibility to pay these workers shifted from the employers, who were reluctant to pay Blacks in the first place, to the customers. And so, in the beginning, a good chunk of American workers depending on tips were Black, the newly freed slaves.

As this new practice gained traction, restaurant owners used it to their advantage, paying their workers less, according to Jayaraman, as quoted in TIME and elsewhere. In 1938, as part of the New Deal, wage legislation made it official that employers of tipped employees didn’t have to pay them the full minimum wage. Instead, tipped workers would get a reduced wage that, with tips included would add up to or exceed that minimum wage. And that’s about where we’ve remained. In Colorado current state law mandates that tipped workers receive $3.02 per hour below the minimum wage.

Tipping again became part of the conversation in 2015, when high-profile restaurateur Danny Meyer eliminated tipping from his restaurants. Meyer moved to a hospitality-included model, raising menu prices to reduce the pay discrepancy between those who work in the kitchens (non-tipped workers like cooks and dishwashers) and dining rooms (tipped workers like servers and bartenders). Because of our traditional tipping structure, the tipped dining room workers take home a whole lot more than the untipped kitchen workers. Climbing minimum wages only add to the wage chasm, as many restaurants increase prices to make up for the higher labor costs, resulting in higher check averages and, thus, higher tips.

To combat that wage gap here, Denver restaurant group Crafted Concepts (Rioja, Bistro Vendome, Stoic & Genuine, Ultreia) decided to implement a 2% surcharge to each bill for kitchen employees when they opened Ultreia in late 2017. With the Denver minimum wage hike this past January, they restructured and raised that surcharge to 3% across all of their restaurants. But instead of rolling it into menu prices unbeknownst to the diner, they wanted to call attention to the disparity, and so co-owners Beth Gruitch and Jennifer Jasinski made the surcharge, which they call “Denver Minimum Wage,” a separate line item on each tab.

“We wanted to show people that you’re getting what you pay for. You’re not getting an $18 burger instead of a $14 burger,” Gruitch says.

Of course we all know what happened in March of this year, and with Covid-19 hitting the restaurant industry hard—combined with the existing economic pressures of rising minimum wages, rents and food costs—some local restaurateurs decided it was time to nix tipping altogether.

“I’m hoping Covid will push it in a different direction,” says Corrida and Oak at Fourteenth co-owner Dayton. “I know a lot of restaurants are implementing this right now. It’s a smarter way to run a business that we haven’t been able to do prior to this. In order for survival, restaurants are going to have to be creative in a lot of different ways.”

His way is to eliminate tipping altogether at his two Boulder restaurants. In its place, diners will find a 24% surcharge added to their bill, called a “Community Value Fee,” which goes to pay employee wages and benefits like health insurance. Employees can choose how many hours they want to work, they’re then paid either hourly or on salary. At Dayton’s Denver restaurant, Acorn, however, he isn’t doing away with tipping, but adding a 2.5% surcharge to help fund employee benefits. This allows him to test two different models to see how patrons will react to the changes.

Austin Carson, co-owner of Denver’s Restaurant Olivia, also took the Covid downtime as a chance to change things up.

“We were sitting around twiddling our thumbs when Covid first hit and felt there was an opportunity where we could roll hospitality into our pricing with maybe a little more of an open mind from the consumer’s perspective,” Carson says.

When Olivia first opened in January of this year, a tip line was still on the bill, along with a 3% surcharge that went to kitchen staff to try to ameliorate the wage discrepancy between the dining room and kitchen workers. It wasn’t enough, and so when Olivia reopened following the Covid closures it was under a new tipping-free model. Like the majority of non-service-industry business do, Carson included the cost of wages, insurance and benefits for his employees into his cost of doing business. He accounted for that cost by increasing menu prices. Carson hopes that in addition to giving kitchen workers more competitive wages, going tip-less helps to raise the esteem of restaurant industry careers.

“I want more people to view what we do as a legitimate career, and not what you do in between ‘real jobs,’” he says.

Their goal is to pay everyone who works at Restaurant Olivia $30 an hour, and they’re doing that by raising prices, typically by about 25–30%. They’ve priced all the food and drink to match what it costs them to create it, including paying their staff.

“Our biggest concern was sticker shock,” Carson says. “But people have been really receptive. I feel like 10 years down the road it’ll be a lot less rare to see this type of thing.”

The George Floyd killing in late May solidified his and his partners decisions to move away from tipping at Olivia. Aside from tipping’s post-slavery origins in America, nonwhite servers still make less than their white counterparts.

“I’m a Caucasian male—that system is designed to benefit me,” Carson says. “Now there are all kinds of studies showing the inequity in tipping between Asian Americans, African Americans, men making more than women. We would never pay anyone more or less based on these factors, so why would we allow the feelings of some consumers to allow us to pay our staff different?

“I would love to see tipping go by the wayside over the rest of my career,” Carson continues. “If you [could] rewind back to the inception of tipping and erase it and build the restaurant industry going forward without it, I think we’d be better off. I have a great deal of conviction that the system needed to be changed. I don’t necessarily know that how we did it is the best way, and I’m open to maybe somewhere down the road changing course a bit, but knowing that the idea at the end of the day is equality between front and back, and men and women, and race.”

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