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‘I risk being labeled a tightwad:’ Is it OK for restaurants to add a 20% tip?

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Paying servers the minimum wage has influenced tipping practices in the U.S. Many folks were taught that you should tip 18% or 20% — unless the service is outright horrendous. But wait staff are already making the minimum wage in many cities and, if you add the tips they earn, they are oftentimes making significantly more than the minimum wage.

‘As more cities move to require servers to make a full minimum wage before tips, do we need to keep tipping? ‘

Is it time to reevaluate how much we tip? For instance, what are your thoughts on restaurants that automatically include an 18% tip on your final bill for six or more, or even regardless of service or party size? I risk being labeled a tightwad, I know. But I do have a valid question: as more cities move to require servers to make the full minimum wage before tips, do we need to keep tipping? 

Cities like Seattle mandate that servers make at least $16.50 before tips, and some restaurants add additional service fees for the “benefit of employees.” It begs the question: in those situations should tipping be an optional for great service or does the previous tipping code remain in place, despite all the other types of payments being added? All of those tips add up for the customer too.

Two Tippers

Dear Two Tippers,

I don’t envy wait staff, or anyone dealing with the general public as part of their job. If you eat out, tipping is optional. Customers are not generally forced to tip. But I do encourage people to tip. If the restaurant adds an automatic gratuity, regardless of the table size, customers should be given the heads-up. Typically, parties of six or more are given fair warning of an automatic gratuity on the menu. 

This prevents a large group of people from taking up a table for several hours, drinking too much and/or getting obstreperous with the server, and deciding to forgo the tip, or tip a measly amount in protest. That server has one night to make their tips, and is charged with a designated station. One large table should not wield an inordinate amount of power over a server’s income. Hence, automatic tips.

The federal minimum wage is $7.25 per hour, but the minimum wage for employees who receive tips is $2.13 per hour. However, the amount of tips plus the $2.13 must reach at least $7.25 per hour. Obviously, many states set their own minimum wage. Still, around half-a-dozen states do not have laws stipulating a minimum wage for tipped employees. For other “charges,” ask if they go directly to employees.

‘One large table should not wield so much power over one server’s income on any given night.’

Seattle, among other cities, has set a minimum wage for servers. Do those servers still deserve to be tipped? Social custom dictates that people tip when they eat out. It may not be written into a legal contract, but it is part of the social contract. Wait staff maintain politeness in often trying circumstances, rush around carrying hot trays of food, listen to complaints, and are often judged for their manner and speed. They endure hungry, disgruntled customers and, yes, even sexual harassment.

So my answer to your two questions is “yes” and “yes.” Yes, it’s OK to add an automatic gratuity for parties of six or more with fair warning and, yes, it’s customary to tip wait staff even if they’re not making the minimum wage. How much you decide to tip depends on the kind of restaurant and, in some cases, the quality of service. But keep in mind that wait staff are on their feet all day.

The good news for wait staff is that Americans are, for the most part, generous tippers. Some 98% of people told this survey that they tip for table-side service in a restaurant, while 76% say they tip delivery workers (an admirable gesture, given that such workers will arrive with your food in-hand in rain, hail or shine). Only 25% of customers tip in a self-service restaurant like Chipotle
CMG,
-0.20%

or Panera.

If you can afford to eat out, you can afford to tip something. Like many people in the service industry, wait staff work evenings, weekends and holidays. And yet they have been caught in the crosshairs of an increasing number of companies asking customers to tip using iPads
AAPL,
-0.55%
.
You don’t have to tip for a $6 coffee. But servers deserve our respect and patience, and they deserve our tips.

“If you can afford to eat out, you can afford to tip something.”


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Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write to me with all sorts of dilemmas. 

By emailing your questions, you agree to have them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

The Moneyist regrets he cannot reply to questions individually.

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‘I feel used’: My partner stays with me 5 nights a week, even though he owns his own home. Should he pay for utilities and food? 

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