Tipping system is overall harmful to employee income

By Page Wisniewski
On February 4, 2018

Gratuities are an economic cornerstone for many workers employed in the restaurant industry; federal law mandates that employers can pay tipped employees less than the minimum wage.

According to the Department of Labor, employers are only required to pay tipped employees $2.13 an hour. This payment model in the restaurant industry has been operating for centuries on the basis that these employees are compensated through customer gratuity.

In December, the Donald Trump Administration attempted to regulate the pay structure for tipped and non-tipped employees in the restaurant industry by proposing that states require a “tip pool.”

A tip pool allows employers to redistribute waiters’ earned tips as they see fit. This could mean tips are equally distributed to all employees or employers could opt to pocket the earnings themselves. This proposal is in opposition to a 2011 Labor Department regulation that mandates all tips are the property of the tipped employees.

However, tipping as a pay structure – regardless of pooling – is harmful to both businesses and their employees. Tipping should be abolished and all employees should be able to earn a reasonable wage from their employers, not their customers.

Tipping also creates a culture of sexual harassment and racial disparity for employees who depend on tips as living wages. According to Restaurant Opportunities Center United (ROC United), 40 percent of restaurant employees are people of color and 60 percent of restaurant employees are women.

ROC United reports that the restaurant industry produces up to five times the average number of sexual harassment claims per worker – making the U.S. restaurant industry as one of the leading industries in sexual harassment rates. Because tipping creates a system where the customer (rather than the employer) is responsible for paying the employee, the employee becomes subject to higher rates of harassment. When a person’s income and livelihood are based on pleasing a customer, the customer is not held accountable for mistreating the employee. In ROC United’s 2014 study, out of 668 total surveys, 80% of female restaurant workers and 55% of male restaurant workers reported to experiencing some form of sexual harassment by a customer.

According to a study conducted by Cornell University, non-white servers make less tips than white servers for the same amount of work. There is a $4 per hour wage gap between white and nonwhite workers.

ROC United’s co-founder Saru Jayaraman, attributes this disparity to the fact that non-white workers make up more of the lower-level positions — such as bussers or runners — in the restaurant industry. This racial disparity in tipping culture should not come as a surprise, because the implementation of tipping can be dated back to slavery.

According to UC Berkeley Labor Center, after the Civil War and emancipation of slaves, the wealthy white businessmen who lost their source of free labor participated in the emerging restaurant industry.

These businessmen then employed newly freed slaves without paying wages and instead required them to live off customer gratuity. Tipping not only began as a method to keep minorities poor, but it has sustained a legacy of inequality throughout the centuries it has been in practice.

Employers should be responsible for paying employees reasonable wages – not the customer. Tipping maintains a culture – already rooted in racist history – where women and people of color are subject to unequal opportunities and pay.

While pooling the tips would seem like an ideal solution to level the playing field for these workers, the Trump Administration’s proposal does not dictate how employers must divide the tip earnings, thus leaving room for employers to take property of the tips and further take advantage of their below-minimum-wage employees.

 

 

Paige Wisniewski is a junior majoring in interdisciplinary social sciences.

 

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