Minimum Wage Hikes Compel Restaurants to Consider “No-Tipping” Policies

Minimum wage hikes have provided restaurant owners across the country the opportunity to tackle what many have criticized to be unfair tipping practices. Faced with rising labor costs resulting from minimum wage increases, some owners are raising costs on their foods and services and implementing no-tipping policies to help offset the increased costs for their patrons — a change that some owners are actually welcoming.

Many restaurant owners have begrudged what they view as the inequity of tipping practices, with servers making nearly double what staff in the kitchen earned after gratuities. But unlike with tips, which they could not legally compel servers to share with the kitchen staff, revenue generated from certain types of surcharges and increased menu prices can be distributed to everyone.

According to the New York Times, restaurant owners have cited additional reasons for preferring a business model that includes a no-tipping policy:

In some cities like New York, where tipping is subject to a confusing welter of federal, state and local regulations and tax laws, eliminating it would simplify bookkeeping. Managers say it would also allow them to better calibrate wages to reward employees based on the length of their service and the complexity of their jobs.

(Of course, a simplified tax code would fix New York City’s problem right up, but that is a whole different discussion).

Critics have also pointed to evidence that patrons tip disproportionately, depending on race and sex.