(Nexstar) – It’s widely understood that workers in the food service industry typically get paid less than the rest of us, in part because they’re tip. But, many have argued, paying a tipping employee to the servant, along with the tip they receive, is sometimes not enough to reach the standard minimum wage of $7.25. This is prompting some restaurants to switch to a headless style of business.
Current federal regulations require tip-employees — those who receive more than $30 in tips each month — to have a minimum wage of $2.13. This server should average $5.12 in tip per hour, which means it will make the federal minimum wage of $7.25. If a server doesn’t earn enough tips in a shift to earn $7.25 an hour, federal law says the employer must pay them the rest to reach that rate.
While this may vary for some states, others follow this minimum federal requirement, including Indiana, where a business owner decided to stop accepting tips.
Last year, Curtis Cummings, founder and president of Switchyard Brewing Company, decided to eliminate tipping at his brewery in Bloomington, Indiana. Instead, Switchyard employees now charge at least $15 an hour.
“It is the responsibility of the employer to pay their employees, not the clients,” Cummings explained to Nexstar. He also noted how factors such as a server’s gender, age, weather, or day of the week can affect how much — or how little — a server is tip.
The researchers even found that the vast majority of people do not base their tip on the quality of service, in fact they only follow a social norm. And when it comes to service quality, Cummings said any issues you encounter shouldn’t be ruled out from server income.
“It’s still more likely the company’s fault because it’s the company’s duty to train, right?” It is to explain. In addition, the promise of a tip does not always guarantee a good service. What did you do? Like any no-pay job, it’s a security job, according to Cummings.
Cummings said Switchyard’s switch to the information-free service “has become a real draw for the job.” Employees no longer have to worry about missing out on the weekend shift — shifts that are usually busier, which means the opportunity to get more tips — and the company can offer other benefits like paid time off.
While Cummings employees and most of their clients have taken the idea of no more tipping, not everyone agrees.
Cummings explained that after the Switchyard moved to the new no-tip policy, some people — many from outside Indiana — began leaving one-star Google ratings for a business. It’s a relatively common trend, Mike Lane, professor of consumer behavior and marketing at Cornell University, told Nexstar’s KTLA.
Whether it’s a restaurant adding fees for service or raising menu prices slightly, as Switchyard has done, Lynn says businesses will likely see a dip in their online ratings.
“It turns out that when customers rate how expensive restaurants are, they pretty much look at menu prices, and that’s it,” Lynn said. “We are excluding, or in some way ruling out, the fact that you are expected to tip.”
The Switchyard has been tip-free for over a year. Some, like Triptych Brewing in Savoy, Illinois, have just joined the movement, while others, like Optimism Brewing (who inspired the Cummings) in Seattle and Zazie in San Francisco, have been ungrateful for years.