To Tip or Not to Tip? Hospitality Included.

There is a movement in New York City restaurants that many may not fully understand. The Hospitality Included Movement aims to eliminate tipping in restaurants. This movement started to gain traction in October of 2015 when Danny Meyer of the Union Square Hospitality Group announced that their restaurant group would phase out tipping from their family of restaurants. They started with their restaurant The Modern which is housed on the ground floor of the Museum of Modern Art and will continue phasing out tipping with the rest of their restaurants this year. Besides this group, there is also a collection of Brooklyn restaurants committed to eliminating tipping who advocate including the cost of service in food prices.

If you would like to learn more about why Danny Meyer choose to eliminate tipping, you can do so here.

What many are confused about is why a restaurant would want to get rid of tipping in the first place. With tipping in place, restaurants are legally allowed to pay their servers and other wait staff a lower wage per hour and many cite that a server has less of a motivation to provide good service if they do not receive a tip. Those who want to get rid of tipping say mostly the opposite as an argument against tipping.

The History of Tipping in America

According to the New York Times in their article Why Tip?, tipping was imported to America from Europe. It is theorized to have started as a practice in England where overnight guests in someone’s private home would vails (tips) to the home’s servants. After this practice became more commonplace, customers in London coffeehouses and other establishments began to tip. In Europe, this practice was largely aristocratic and looked on as “a sprinkle of change for social inferiors”.

After the American Civil war, wealthier Americans started to travel to Europe and some brought the practice of tipping back to the United States. However, with no history of aristocracy in America, many were opposed to tipping. In 1897, the New York times claimed that the many believed that the idea of tipping was opposed to ‘American Democratic Ideals’ and that ‘Tipping, and the aristocratic idea it exemplifies, is what we left Europe to escape,’. In 1904, an organization called the Anti-Tipping Society of America was created with the goal of banning tips. They had the support of many traveling salesmen and labor unions and they did succeed in part by getting many stated to ban the practice of tipping.

However, all of the state bans on tipping were since repealed and reportedly were not very enforceable.

Now tipping is commonplace and even those who do not want to tip feel the social pressure associated with tipping.


Arguments for Tipping

Arguments for tipping include many of the arguments that people use against tipping. Proponents of tipping argue that a server or other service person deserves the tip as they make a lower wage than many other employees and that they rely on a tip to survive. Many business owners also support tipping citing that it brings their costs down and puts more of the burden of paying workers on the customers. Many employers say that the tip system in fact motivates servers and other wait staff to provide a higher level of service compared to a system without tipping.

In an Article from Eater, the author spoke specifically about some people believing that being a waiter is somewhat akin to a sales job and that a tip can be seen as a sort of variable commission based on how much food and drink is sold to a customer. Many customers also see tipping as a way to compensate servers for good service or voice their dissatisfaction at poor service.

Arguments against tipping

Some arguments against tipping aim to prove arguments for tipping wrong. The argument that tipping saves employers money is true but anti-tippers argue that it should not be the job of the customer to ensure that a server makes a living wage. They argue that tipping allows employers to make more money at the worker’s expense and that a business should pay an employee a living wage in the first place.

Furthermore, opponents cite research done by the Economic Policy Institute revealing that waiters and bartenders are more likely to live in poverty than tipped workers, and tipped workers are three times more likely to be on food stamps than the rest of the American population. This research also showed that states that raised the minimum tip wage showed reduction in poverty for this group of people. Proponents of tipping have argued that you should tip for this very reason.


Further, a study from Cornell University including more than 2,600 diners at 21 different restaurants, concluded that tips are only weakly correlated to service. Many argue that findings from this study and many like it raises serious questions over the argument that tips are based on server performance, customer satisfaction, or that tips are incentives for good service. Some even liken the practice of tipping as discriminatory as servers with differing looks and races have been shown to receive lower or higher tip percentages on average.

The proper compensation of all restaurant staff over simply waiters also gets brought up very often as an argument against a system that makes it illegal for an employer to have tipped employees share tips with kitchen staff in a tip pool or through a method referred to as tipping out. The average person cooking the food in a restaurant often makes less money per year than the person who serves the food to you. Depending on the no-tip model that a restaurant chooses to use, removing the obligation to tip may help put more money in the pocket of the chefs and balance the disparity between their pay and server pay.

Should people Tip?

Regardless of whether or not an individual tips, a service worker is guaranteed minimum wage earnings. According to Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) from the U.S. Department of Labor, employers can take a maximum tip credit toward the minimum wage of a tipped employee effectively bringing down employer costs to a minimum amount allowed by state or federal law. So regardless of if an individual tips or not, the server is making minimum wage. What you tip does however, increase the likelihood that the server you have will make more than minimum wage at the end of the day.

While there is a legal obligation to pay for your food, there is no legal obligation to tip. Tipping is customary but there will be no legal consequence if you choose not to tip. However, there may be a social one.

Some restaurants go about including hospitality in different ways. While the Union Square Hospitality Group includes service in their food prices, other no-tip restaurants have opted for a service fee, around 18%, added to the bill at the end. In addition to this service fee or in other hospitality included models, workers receive profit sharing or other incentives to give employees a stake in the business. These restaurants claim that they do not lose any Business after switching to this system but we will need to see at least a full year of sales comparisons to confirm this.

So what do you think? Do you like tipping, should we get rid of it? Would you buy less if service was included in the price or added as a service charge? If you run a restaurant, have you considered including hospitality in the price? Let us know in the comments.

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