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I understand that the main point of tipping in restaurants is to supplement low wages for service staff. After personally knowing one waiter who works (perhaps illegally as he may not be permitted to work) in a particular restaurant, I learned that he received a fixed daily salary and whatever tip the customers leave go to the owner of the restaurant.

If this is true, do customers still have any ethical obligation to tip when dining in this restaurant? After all, whatever amount we tip will not go to the waiter.

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  • 34
    Perhaps the real ethical obligation is not to eat in a restaurant where you strongly suspect that workers are employed illegally and being exploited by not receiving a living wage
    – Traveller
    Mar 25 at 22:15
  • Comments have been moved to chat; please do not continue the discussion here. Before posting a comment below this one, please review the purposes of comments. Comments that do not request clarification or suggest improvements usually belong as an answer, on Travel Meta, or in Travel Chat. Comments continuing discussion may be removed.
    – Willeke
    Mar 26 at 16:54

9 Answers 9

62

whatever tip the customers leave go to the owner of the restaurant.

This is illegal. Please report. E.g., in WA state, report here.

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28

In addition to Franck Dernoncourts answer outlining the legal side, I'd like to address the ethical side, because you explicitly referred to ethics in your question.

The ethical thing is to not be a customer of establishments that are both immoral and criminal. If you know a restaurant is run by criminals who steal money that belongs to their employees, you report the establishment to the relevant law enforcement authorities. Hopefully the business will be closed down (or possibly receive a milder penalty and improve their ways), and the landlord will find a new tenant that respects the law.

Possibly, in some places, this is not only the ethical thing to do, but also the mandatory thing to do. You're knowingly supporting an ongoing crime, although it's probably unlikely to get you into actual trouble (I don't know, and I am not a lawyer).


Excursion into why I believe it is ethical to boycott such establishments, because a comment pointed out my answer violated Hume's law:

If you believe that theft causes harm (even more so if the victim is poor or otherwise vulnerable), and you believe it is moral to reduce harm, then the restaurant owner behaviour is not only illegal, it is also immoral. As a customer, you are rewarding this harmful behaviour, which also causes harm (indirectly). Therefore, it is ethical to not be a customer of such establishments.

Furthermore, if you believe it is moral to reduce harm and the harmful behaviour is illegal (as is the case in the question), then reporting the establishment to law enforcement contributes to reducing harm. You could choose to do this, depending on how strongly you consider this behaviour to be immoral and on what you think of the possible response from law enforcement.

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  • 1
    Comments have been moved to chat; please do not continue the discussion here. Before posting a comment below this one, please review the purposes of comments. Comments that do not request clarification or suggest improvements usually belong as an answer, on Travel Meta, or in Travel Chat. Comments continuing discussion may be removed.
    – Rory Alsop
    Mar 28 at 14:31
17

While I don't disagree with the suggestion to report the situation, that will take time; and unless one of the wait staff is willing to come forward it may not go anywhere.

In the meantime, to answer the question: tipping is always optional and you are under no obligation to leave a tip. The situation is different with a 'service charge' advertised on the menu and added to the bill, which must be paid.

You might also consider not eating at the restaurant.

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  • 4
    May not be true in US, but in UK the service charge is almost always nominally optional and you can ask for it to be removed or reduced if you feel that's appropriate (and can bear to social discomfort of doing so :D )
    – Brondahl
    Mar 26 at 8:36
  • 6
    I think this answer glazes over the fact that while legally optional, in the US it is still socially required to tip in most sit-down restaurants. Not tipping is generally considered very rude.
    – David K
    Mar 26 at 12:41
  • 1
    @DavidK I think if your companions knew that you were withholding the tip because it doesn't go to the waiter, they'd understand and probably agree. And the waiter won't retaliate because it doesn't affect them.
    – Barmar
    Mar 26 at 15:12
  • 1
    @Barmar Wrong, it most definitely can affect the waiter. In tip confiscation, the waiter will be responsible for paying an estimated tip, based on the gross tab. This is to prevent the waiter from pocketing. The same thing is done in legal tip pooling, a fixed percentage of the tab goes to the pool and is subtracted from tips via card payments.
    – user71659
    Mar 26 at 20:35
  • 8
    @user71659 The waiter doesn't get the tip, and gets penalized if we don't tip what the restaurant expects? That's horrible on top of illegal!
    – Barmar
    Mar 26 at 20:37
13

Other people have addressed the legal side and recommended to not visit the establishment if you know about illegal behavior.

Purely from an ethical standpoint I would say it is always ethical to not tip in the USA.

Because legally the waiters still have to be paid minimum wage by the employers if they do not manage to make above minimum wage through tips.

It may often be the case that employers break this law, but in that case if you know about it you should once again not visit that establishment.

(If you know the waiters do not pay taxes on tips, that would be further reason to not visit the establishment.)

As we are on the travel exchange I would add that while ethical it is not socially acceptable. And all my points are not very practical because most restaurants break the law and most waiters break the law. So you couldn’t go ethically eating at all.

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  • I was thinking along similar lines. All things considered, perhaps the question is: is there any other reason one would still want to go to said restaurant, e.g. because you know the waiter and want to say hello? Perhaps your friend can tell you more about the tip theft, how much is usually taken etc., so that you can give an average tip on the card, and an extra tip in cash or something like that.
    – Sir Jane
    Mar 27 at 14:32
12

Also in addition to Frank Dernoncourt’s and gerrit’s answers:

With regards to tipping someone, I will typically physically hand an employee cash, because wage theft in tipping is more common than you would like to think, but also because of theft by other employees and clientele!

Handing someone cash directly (and maybe saying “thank you”) significantly improves the likelihood that that someone receives the full tip that you meant for him or her, and that she receives it today and not at some future date, even when you are unaware of any illegal behavior on the part of the business owner or his agents.

Use cash to tip, and make it clear on the receipt that you offer NO additional tip surcharge be made from your card. This also decreases the likelihood that any other payment shenanigans will happen with your card.

You cannot prevent all malfeasance, of course, but you can make sure that you left an employee with money in-hand and later dispute any bad action with your credit card.

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  • Wage / tip theft is clearly illegal and immoral. A tipping pool is more debatable. Can I tip the cook?
    – gerrit
    Mar 26 at 13:24
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    Where tips are part of wages, yes. But where staff are paid at least the minimum wage and the tipping pool is clearly written in the work contract and thus known before people start working, I'm not sure if it's still wage theft.
    – gerrit
    Mar 26 at 15:45
  • 2
    @Dúthomhas Handing cash directly to the waiter does not prevent tip confiscation/tipping pools since the expected tip can be estimated. Tipping pools are not immoral in high-ticket fine dining. It's immoral to collect $200 on a $1000 tab when the waiter does less work than a family restaurant, due to sommeliers, bus boys, cheesmongers, maitre d, etc. all contributing.
    – user71659
    Mar 26 at 20:26
  • 3
    I abhor circular conversations where the premise of a question is jackboot shifted to prove someone wrong on the internet. Were this thread about high-end dining then we might have something to argue about. But it’s not, and I maintain my opinion that tipping pools in common dining are immoral, right along with labor laws that allow underpaid staff, AND that handing someone cash directly still significantly reduces the likelihood that it’ll be stolen from them. Sommeliers manage $55–100k a year, so, clearly not the problem in this thread.
    – Dúthomhas
    Mar 26 at 22:56
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    +1 from me, because this is what I've been doing for years. When I give cash to the waiter, I know the waiter got it. Perhaps I can't know whether their employer is hypothecating how much I handed over, and making compensation adjustments on that basis. Perhaps I can't know whether the waiter pocketed it or put it into a pool. But I can at least know for sure that the waiter got it, which is what I intended. That other parties can still try to frustrate my intention doesn't mean I shouldn't do what I can to accomplish that intention.
    – MadHatter
    Mar 27 at 11:10
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My answer in no way disagrees with anyone who states that this arrangement is illegal, that the best course of action is to not patronize the establishment, or that tipping is not required. These are all entirely true.

After personally knowing one waiter who works (perhaps illegally as he may not be permitted to work) in a particular restaurant...

(Emphasis mine.)

Sorry for your friend's situation. It sounds unpleasant.

If he is not permitted to work but does, he is breaking the law. The employer is breaking the law by employing him illegally. It should come as a surprise to no one that an employer who breaks one employment law, breaks another also.

All of that aside, while tipping is not required, it is extremely poor form not to tip when receiving sit-down service at a restaurant in the US. There are as many opinions about this as there are people, but if you're asking for societal norms, if you can afford it, 15% is the minimum.

Handing the tip directly to your server is generally pointless. Many establishments have tip pools or tip-sharing arrangements, where some of the people who you didn't interact with directly, but are still involved in your service (bussers, expo, bartenders, etc.), receive a portion of the collective pool. These schemes also often serve as normalization, so no one server benefits disproportionately from better or worse luck. I have no idea if these schemes are legal, but from my experience in the industry, they are normal.

I understand that the main point of tipping in restaurants is to supplement low wages for service staff.

As an American with experience in the service industry as a server and as a manager, I would disagree with this. This is a common complaint but it is factually incorrect.

The federal minimum wage stands, even if a server's posted hourly is below it. Servers declare their tips.

If the amount earned hourly, between wages and tips combined, is below the minimum wage, the employer must pay the difference.

I do not know how many employers either ignore this or get this wrong. I've worked at several restaurants in different states, and every single one I've worked for does follow this. Most have made mistakes that I've caught but none have ever disputed a correction.

This does come with two provisions:

  • The actual (legal) minimum wage isn't the putative minimum wage right now. McDonalds (they're often considered a hire-all entry job) in my area pays $13 an hour while the minimum wage is around $8. This is a big difference and I'm not taking a side. It's the way we do things in America.
  • Servers routinely lie about their tips when reporting for accounting and taxation, in my experience. I've met some who do some mental math to put their declared tips right in the minimum wage area. I've also met many who don't really care. I've also (as a manager) been instructed to dismiss a server who routinely declared such low tips that their salary had to be padded by the establishment. This person was under-reporting their tips. Lying on reported tips is tax fraud and is illegal. Then again, a lot of people break other laws routinely, like speed limits. Once again, I am making no endorsement of either side.

... I learned that he received a fixed daily salary and whatever tip the customers leave go to the owner of the restaurant.

(Emphasis mine.)

Is the fixed daily salary at or above minimum wage? I am not a lawyer but I don't believe that this is illegal in any way if it meets minimum wage requirements.

If the fixed daily salary is below minimum wage, this is definitely illegal.

So what do I do?

Try to help your friend get out of the situation. This requires somehow getting him on the right side of employment law so he can get a legal job where this is less likely to happen.

If you have presumed incorrectly and your friend is legally employed, or after he has gained the right to work, help him get a better job.

Until then, tip 15%. You're asking in Travel.SE so I presume you're not from the US. This is how we do it here. You are not breaking the law to do otherwise but you will be violating the social contract that Americans follow.

There are a great many Americans who have violated various social contracts (and laws) with mixed success. Martin Luther King, Jr. comes to mind, as well as many others. As a traveler, do you want to be in that company?

I know that I don't want to be an outlier, and definitely not a crusader, when I travel anywhere else. I can barely affect US laws as a US citizen. I feel like I am generally powerless to question, much less dispute, any situation when outside the US, whether societally incorrect or illegal, when I travel.

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  • Is the wage before tips enough to live from? If not, the employer is lacking in the care of the people working there, as is the case in almost all restaurants and many other businesses in the USA, as well as quite a few in the rest of the world.
    – Willeke
    Mar 27 at 15:04
  • If the amount earned hourly, between wages and tips combined, is below the minimum wage, the employer must pay the difference - I believe in California the employers are not allowed to reduce wages below minimum wage no matter the tips. See the FAQ #16 here.
    – littleadv
    Mar 27 at 22:09
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    “15% is the minimum” — that I think is dependent on location and social circles. At least when I was living in the states 10 years ago, there were some places (e.g. NYC upper-middle-class) where locals told me 20–25% was expected, other places (rural southeast) where they said 10% was the norm.
    – PLL
    Mar 28 at 8:48
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    “so he can get a legal job where this is less likely to happen” => this can take years assuming OP is in the country illegally or on a visa where such work is not permitted. Practically speaking it might be better for OPs friend to earn less than minimum wage than to have no wage at all.
    – JonathanReez
    Mar 28 at 15:19
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    "the best course of action is to not patronize the establishment" - disagree. If it goes under, their friend loses their job. And everyone who works there needs their friends and family to show up at least once in a while, or it will. - This isn't a thing 'you know' in the US, unless they're your friend. If they aren't, then definitely don't go there. - Otherwise, +1.
    – Mazura
    Mar 29 at 1:10
1

My experience in the industry tells me that that's an atypical arrangement. I suggest putting cash in the server's hand. That's what I do whenever possible.

-1

According to federal law, the employer is permitted to take up to $5.12 per hour of tips as a credit towards paying the tipped employee a minimum wage of $7.25 per hour. If the employee earns less than $5.12 per hour of tips they are to receive a fixed $7.25 per hour total.

If the employee is getting more than $5.12 per hour in tips and the employer is keeping all the tips then that's illegal. It's up to you if you want to support illegal activities by going to such a restaurant or tipping there.

-3

No, you are not. In fact you probably shouldn't, unless your experience was so extraordinary that you feel the owners deserve more than they chose to charge you.

The general rule of thumb is that you tip at any "sit down" restaurant where the staff takes the order at your table, brings your food to your table, and busses your table for you when you are done. (There are also some other non-restaurant situations, but the question was about restaurants)

The reason you personally want to tip these workers* is that in the USA restaurants are actually allowed to pay people way below the minimum wage if they are being tipped. The amount varies by state, but the federal minimum is only $2.13/hour! So if a tipped-wage server doesn't get any tip from your table, they were doing all that work for dang near nothing.

However, there are exceptions. Some restaurants have been going with a no-tip model. To do this and still be square with US labor laws, of course they have to at least pay the normal (non-tipped) minimum wage. Now in such a place, I could see where a patron might feel like tipping the server anyway. We're used to doing that. However, as an owner of such a place, I might not like that, as it means now servers may psychologically treat regulars who tip anyway better than those who don't, which now incentivizes everyone to go back to tipping! Suddenly I'm just running a more expensive tipping restaurant again.

So yes, one way around that would be to not let the servers keep those tips. If they're paid a good salary, and knew this was the deal up front, there's nothing wrong with that. It also means in such an establishment you should not be tipping. Its OK. That's what everyone there wants.


* - It always helps me at least to understand things when I know the reason for them.

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    This is factually incorrect. The minimum wage stands (not $2.13, but $7-whatever it's at). Tips are declared and if the net earnings are below minimum wage, the establishment must pay more, to raise actual earned wages to the actual minimum wage ($7-whatever). Mar 27 at 14:27
  • 1
    @StephanSamuel - The minimum wage for tipped workers is $2.13, which you can see for yourself quite easily by clicking the link under the text you are referring to in the answer. There is the proviso that the employee in question must make enough in tips to make up the difference with the normal minimum wage. However, talk to a few minumum wage workers and you'll find its quite common for tipped workers to make less than that, and the burden is entirely on the worker to fight their boss legally to get the difference. So realistically, not gonna happen if the boss doesn't want to be nice.
    – T.E.D.
    Mar 27 at 14:36
  • 1
    You misunderstand the law and your backup is a casual poll with no evidence. I can't answer to, "burden," but I've (personally) worked many places and every employer I've experienced has always done this calculation on my payroll for me without asking. It was rare for me, I declared actual tips and almost always far exceeded minimum wage. For the employer to do otherwise is employment fraud. This is Travel.SE, not the place to crusade about that. Your answer is factually incorrect. Mar 27 at 14:43
  • @StephanSamuel - That's cool for you, but I've also talked with people whose bosses just made them "tipped workers" so they could pay less, not because they actually got tips. Either way though, the tipped wage minimum rate is $2.13/h. Read the helpfully provided link, if you have trouble believing it. The rest (plus ideally some extra) is supposed to come from tips, not from the employer, which is what's relevant to the discussion.
    – T.E.D.
    Mar 27 at 14:54
  • @StephanSamuel - If you feel Wikipedia is "factually incorrect", you're free to go there and fix it. The page is editable.
    – T.E.D.
    Mar 27 at 15:18

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