Aligned with the pandemic boon of takeout and the restaurant industry’s struggle to attract and retain workers, the tipping debate has re-emerged. Wages have increased for tipped and non-tipped staff across the board as restaurant owners compete for rehires—a 13% increase in August 2021 compared to August 2020.
Many restaurateurs eliminated then reintroduced tipping in the last ten years, including Danny Meyer and David Chang. The pandemic has since prompted new debate around the existence of the subminimum wage, a legal exception allowing companies to pay certain workers less, including tipped, disabled, and incarcerated workers.
Sympathetic customers tipped extra earlier in the pandemic, with over 56% reporting tipping higher than usual for restaurant food, according to a Bank of America survey. Though tipping for takeout has been historically inconsistent, it became a more common practice in the past two years as customers sought to support local businesses and service workers. On-premise tipping has since returned to pre-pandemic levels of 18-20% (a downward trend, compared to the increasing percentage of average tips in recent years). With tips decreasing and customer etiquette waning—and of course, the continued risk of exposure during the Delta-induced wave of infections—tipped workers are reluctant to return (and stay) in the industry.
With the rise of mandatory vaccination indoor dining requirements in restaurant hotspots like New York City, front-of-house staffers are even more concerned about health and safety from hostile customers. A UC Berkeley and One Fair Wage study reports that of 1,600 tipped workers surveyed, 78% “witnessed or experienced ‘hostile behavior’ from customers when asking them to comply to Covid-19 protocols.” Over half indicated a fear of their tips being docked by the customer if all rules were correctly enforced. This concern is undergirded by the demonstrated practice of diners tipping discriminatorily in relation to the race, gender, and attractiveness of the server. With inconsistent pay, increased personal risk of infection, customer harassment, and increased workplace responsibilities due to COVID-19 sanitation expectations, many hospitality workers, are permanently transitioning to other industries.
According to a study reported by Quartz, American customers tend to tip primarily out of guilt or obligation. The widely-used Square and other digital payment systems have only increased these responses from customers due to automatic prompts for gratuity before the customer receives the food.
The current federal minimum cash wage is $2.13 an hour for tipped workers. The restaurant and hotel industries currently have the highest percentage of job openings on record compared to the last two decades.
