New Trend: US Restaurants Adding Mandatory Gratuity to Your Bill

New Trend: US Restaurants Adding Mandatory Gratuity to Your Bill

In the United States, customers are expected to add an extra 10 to 20 percent to their tab at the end of a meal – but increasingly restaurants are foregoing these tips.

Leaving a gratuity is de rigueur when dining out because pay for restaurant servers is so low.

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.

For wait staff, tips help bolster pay in line with other restaurant workers who don’t receive gratuities.

However there is a new trend: Riki Restaurant in New York is one of a growing number of establishments eliminating tips by taking the unusual step of paying their staff higher wages.

– Protection from customers’ whims –

The no-tip policy is especially being adopted by upscale restaurants, said Michael Lynn, a professor at Cornell University’s School of Hotel Administration.

Folding tips into the meal tab protects waiters from being shortchanged by the occasional tight-fisted diner, said Lynn, who specializes in issues related to marketing and consumer behavior.

It’s seen as an issue of equity, as restaurants attempt “to equalize the pay between the front and the back of the house,” he said.

A downside is the sticker shock that patrons sometimes suffer when browsing through menus that have tips factored into the prices.

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 staff from the whims of diners.

– Tips vary wildly –

As it turns out, tipping can vary wildly from guest to guest — and not always because of the quality of the table service.

Some patrons withhold tips because they feel the server was not sufficiently cheerful (“I don’t like her smile”).

Others do so because they didn’t particularly care for the food — even if a meal’s preparation is not under the control of the wait staff.

It’s also a problem, Frem said, if workers don’t know how much income they can count on from week to week.

Other managers say greater pay security in tip-less restaurant reduces turnover and improves morale.

The tipless restaurant is still a long way from becoming the norm, but some New Yorkers are beginning to warm to the idea.

Warren mused that it might in fact be fairer to take the decision about tips out of the fickle hands of restaurant patrons — which might even improve the table service that patrons.