To Tip Or Not To Tip

The idea of eliminating tipping in restaurants has been brought up more in the media lately, but it is hard to say what will happen to servers’ overall salaries if tipping is eliminated. 

Barcito restaurant owner Andrea Borgen has eliminated tipping in her restaurant. Barcito is a restaurant located in downtown Los Angeles, and the restaurant has been using the so-called hospitality-included model since 2016.

“I’ve been able to create a work environment where I am able to provide stable wages for my employees,” Borgen said. “Their income is stabilized much more dramatically. On average, they make the same amount as they used to make when they were making tips. It’s just not as many peaks and valleys. We’re also able to pay the kitchen [staff] a little bit better as a result, and we’re able to provide all of our full-time employees with health insurance.”

Being able to provide employees with health insurance is rare in the restaurant industry. A couple of years ago, several Los Angeles-based restaurants attempted to provide their employees with health care by adding a 3 percent surcharge to their customers’ bills. Customers were given the option to ask that the surcharge be removed, and a few reportedly did.

Another issue in the restaurant industry has been the increase in California’s minimum wage.  Some local restaurant owners say this puts even more pressure on their ability to stay in business. Workers say they are glad of the raise, but still worry about their ability to make a living through tips.

“Tipping is incredibly unstable,” Borgen said. “There have been countless studies that have shown that it is sexist, and racist, and completely depends on the guest’s mood on that particular day. The idea [of eliminating tipping] was, at the end of the day, for the guest to still pay the same amount for the same experience, but on the back end of things; they are distributing the funds in a different way.”

Some restaurant consumers have raised concerns about the idea of eliminating tipping.

“One big issue, of course, is whether service declines if you are guaranteeing people money,”  CSUN Professor of Marketing Art Shulman said, “and to what extent does service decline. People don’t have to work as hard, maybe, to make their money [if] they get paid anyway.”

“I do like the ability to control the amount that I’m leaving,” Shulman said.

“If there is an employee that is not meeting their potential, and that is not exceeding our customers’ and our guests’ expectations, [then] we as a business need to address that,” Borgen said. “It can’t just be that every individual costumer or guest gets to decide.”