Should Restaurants End Tipping? Trend Comes With Struggle

by Siti Zawani @ 06 Nov 2015

As more restaurants ditch tipping, owners are asking: Should they? Or, just as important: Can they afford to?

"Raised wages are a very, very positive thing," said owner Dave Miller of Baker Miller, in Chicago. “It’s a very bold and ambitious and very scary thing to embark on. There are a lot of problems with [paying a living wage] that aren't always talked about." Baker Miller pays employees USD$14 an hour while guaranteeing full-time hours, paid vacation and sick days.

Baker Miller pays employees USD$14 an hour while guaranteeing full-time hours, paid vacation and sick days. Scary because, as Miller and other restaurateurs said, there are quite a few difficulties to overcome. Baker Miller is cutting into its profits to fairly compensate its employees, and some of those that earned tips are now making less money. In addition, it has raised menu prices on some items.

With the act of tipping being a cultural norm across the USA, it’s an issue that extends beyond just a form of habit when dining out. Many restaurants' leases have a "percentage rent component" where the restaurant pays the landlord a percentage of their gross sales. Tips are excluded from gross sales, but if tipping is removed and prices go up to accommodate for higher staff pay, restaurants will have to pay landlords more. For all the details, go https://goo.gl/VCNlsa

Should Restaurants End Tipping? Trend Comes With Struggle

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