Some restaurants are abandoning tipping in favour of paying their staff higher wages

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Chris Locke was surprised when he was given the option to tip on a recent purchase at a cannabis store. As the executive chef at Marben, a downtown Toronto mainstay, tipping had been on the forefront of Mr. Locke’s mind for years – the restaurant had experimented with various models of collecting and distributing tips among staff, and had recently decided to get rid of tipping altogether.

“I thought to myself, it’s just a way for employers to try and better compensate their workers without having any responsibility for that compensation,” Mr. Locke said of his weed-store experience. “It’s like … we aren’t going to look after you, but we are going to ask our customers to contribute to your wages.”

Tipping can be contentious.

From a customer’s perspective, there is often an unspoken internal conflict between rewarding a worker for good service versus incurring additional expenses for subpar service, all because of an entrenched cultural norm. With inflation in the mix, and tip rates rising, that unease has perhaps grown.

For servers, and other front-line workers such as baristas and budtenders, tipping is a means to higher wages – deservedly so – and can often make the difference in a worker’s ability to pay monthly rent and bills. But for kitchen staff and marginalized groups working as servers, tipping can invoke a sense of injustice and inequity: Why should a person be arbitrarily rewarded based on appearance, race, gender, sexuality or their role in a restaurant setting?

“The more I think about tipping, the more I conclude that it is an irrational quirk that is deeply embedded and very intractable,” said Marc Mentzer, a professor at the University of Saskatchewan’s Edwards School of Business who has spent decades analyzing North America’s tipping culture. “It is especially egregious in an age where we are concerned about how things like race, gender and age are affecting workers’ compensation.”

Anecdotally, tipping rates and the range of services customers are expected to tip for appear to have risen over the course of the COVID-19 pandemic, largely because of a newfound empathy much of the public developed toward front-line workers, who were either laid off from their jobs due to lockdowns or had to incur the risk of preparing and delivering food and other goods.

“People felt like they wanted to keep restaurants around, and they wanted to help workers. As a result, we saw an expansion of the tipping norm,” said Michael von Massow, a professor at the University of Guelph whose research focuses on how people think about food and pricing.

There is some hard evidence to illustrate that trend.

Data provided to The Globe and Mail from Square, the San Francisco-based payment processing company, found that Canadians have been tipping more generously during the pandemic – on average, customers were tipping 17.9 per cent on face-to-face purchases, up from 16.6 per cent before the pandemic. In the first three months of 2022, that percentage held steady.

During the 2021 holiday season, according to Square, the average tip size at restaurants, bars, health and beauty businesses was 18.2 per cent. Prepandemic, that figure was 16.8 per cent.

It’s a phenomenon scholars like Dr. von Massow and Dr. Mentzer call “tip creep,” in which the expected tipping percentage gradually increases, especially with the use of chip card readers. “The customer is confronted with a keypad and predetermined percentages, which now often start at 17 per cent. It creates an awkward situation where you really don’t have much of an option but to tip that amount or more,” Dr. Mentzer said.

He argues financial pressure on restaurants was immense, even before the pandemic. “Using chip card readers to encourage tipping on takeout orders is a subtle way to bring in more money to the establishment.”

North America’s tipping culture is unique. In Europe, Britain and Australia, for example, tips are not expected, even for bar service. In some restaurants and bars, a service charge is built into finalized bills, often from 10 per cent to 15 per cent, and the proceeds are distributed among staff.

The origin of modern American tipping is tied, in part, to the legacy of slavery. After the Civil War and the abolition of slavery, many of the jobs available to formerly enslaved people were as waiters and railroad porters. Employers chose to not actually pay those workers, but rely on guests to offer them tips, according to research by Saru Jayaraman, the director of University of California, Berkeley’s Food Labor Research Center.

Ms. Jayaraman’s work points toward the fact that restaurateurs keenly capitalized on the idea that they could pass on the cost of paying their workers to customers, so much so that tipping became the dominant form of compensation for waiters.

Rashid Mohiddin, a long-time server and bartender in Toronto, is torn about tipping. He understands it is fundamentally inequitable, but he would rather have the tipping system exist than get rid of it because it would mean a significant difference to his weekly income.

“Part of the appeal of working in restaurants is the tipping culture,” Mr. Mohiddin said. “If you work in a good place, your hourly wage can be between $30 to $40. Is an employer at another restaurant going to be willing to pay me that much?”

He also said he understands how costly it can be for owners of small restaurants – a thin-margin business – to pay their employees more given sky-high rents in cities such as Toronto and Vancouver.

But as a racialized man, Mr. Mohiddin has been on the receiving end of how unjust the tipping system can be. “Do racialized people get worse tips? Of course they do. I cannot even begin to tell you the number of microaggressions I have faced from white male customers doubting my ability as a bartender,” he told The Globe.

“And at the end of the day, regardless of how the customer is behaving, you’re waiting on that tip. You gotta say sorry, you gotta be nice.”

This inherently unequal dynamic is exactly why restaurant veterans such as Mr. Locke, of Marben, decided to abolish tipping altogether, in favour of paying their staff higher wages, even if it meant higher menu prices that could drive customers away.

In August, 2020, Marben moved toward a no-tipping policy. It was a natural progression from being in lockdown, where any tips that came in from takeout orders were split evenly between all staff. But when restaurants opened up again in the summer of 2021, that system was met with pushback from servers, who felt that it was unfair that tips meant for them were being given to back-of-house staff.

“There was much politics and negativity that went into tip distribution. So much emotional effort from all sides,” Mr. Locke said, adding that he found it hypocritical of Marben to have publicly endorsed the Black Lives Matter movement following George Floyd’s murder, while continuing the system of tipping. “That’s also why we canned it,” he said.

In Ottawa, restaurant owner Devinder Chaudhary set up his fine-dining establishment, Aiana, based on a no-tipping model. Mr. Chaudhary pays all his 24 staff at least a living wage, and charges customers a service fee on their bill. He calls tipping a “sneaky way of guilt-tripping a customer into subsidizing your workers’ wages.”

He admits his costs would be lower if he introduced a tipping model and paid each worker less, but he also believes it is his obligation as an employer to pay workers a fair wage. “These people are professionals. I cannot do what they do. They should thus be treated as such.”

One of Mr. Chaudhary’s staff, Robert Lamieux, who has been working in the restaurant industry for over two decades, said this is his first tip-less job, and he prefers a no-tip model because all the money he takes home is pensionable and he would effectively be contributing more to unemployment insurance.

“So if I’m laid off, I get to claim more,” Mr. Lamieux said. “I think it is very beneficial for employees to be paid in this salary model, compared to having an uneven income based on tips.”

Tipping also engenders abuse by customers toward workers, according to author and veteran independent food reporter Corey Mintz, an outspoken critic of tipping. “On the one hand, they can walk away with a pocketful of cash, but on the other hand, they are placed in a position where they are subject to physical, verbal and sexual harassment from customers and managers.”

In an interview with The Globe, Mr. Mintz expressed a degree of exhaustion about the debate over tipping. “It feels like we have been talking about this in cycles and the needle hasn’t moved much.”

The one thing Mr. Mintz has noticed in the pandemic, however, is that restaurant operators who have abolished tipping and offer their employees salaries with proper benefits, such as mental-health coverage, have retained more staff.

“Those who challenged industry orthodoxy around tipping told me that they hadn’t lost people, that they had a stack of résumés,” he said.

Growing awareness about how destructive tipping culture is, coupled with the rising cost of dining out, could move the needle on customers thinking about tipping differently, Dr. von Massow believes. “I think we have moved beyond the point where people believe that tipping equates to good service,” he said.

Dr. Mentzer, however, is less convinced North Americans will move toward a no-tipping model any time soon. For him, an ideal system is one in which tipping does not exist and employers pay workers a fair wage.

“Tipping subsidizes low wages, and I think it is so deeply entrenched in Canadian and American society that it would be unrealistic to expect that it could be suddenly abolished. There would be uproar from all sides.”

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