this post was submitted on 01 Nov 2023
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Tips subsidize business owners who don't pay their employees enough.
*in US
THIS IS IT. All other comments in this thread that don't say this are focusing on the wrong problem or are flat out wrong.
Not really. Money for everything at a business comes from customers. If anything you are subsidizing customers who don’t tip.
No, you are subsidizing owner's new yacht.
That’s what you’re doing by spending money there at all. Do you think these owners would replace tips with money out of their own pockets?
US minimum wage laws say yes. See: minimum wage for tipped vs non-tipped employees.
"The minimum wage for employees who receive tips is $2.13 per hour. The amount of tips plus the $2.13 must reach at least $7.25 per hour. If not, your employer must pay to make up the difference."
Employees who fall into that category are either bad at their jobs or the restaurant is about to go under due to poor sales. At 20% tip they would only be selling $25 worth of food an hour per waiter.
You seem to be moving the goalposts or talking about something different - we're talking about employer obligations when changing between tipped and non-tipped. I quoted the department of labor to show that contrary to your incredulity, yes all employers are required to increase base pay to a higher rate in the absence of tips. You seemed to suggest that employers would not cover any increase in pay if tips were removed - however federal law requires that employers meet a higher base pay for untipped workers. This is regardless of how well a restaurant is doing - if a Michelin 5 star restaurant pays it's employees 2.13 + tip but decides to go tip free, yes they too will be required to increase base pay to 7.25.
The detail about restaurants also being required to cover the difference between tipped pay and 7.25 in cases where the restaurant underperforms is an unrelated detail not central to this discussion. My quote of the department of labor was only to demonstrate the 2 minimum wages between tipped and untipped pay.
No, I’m talking about their take home not the legal minimum. Waiters aren’t making minimum wage after tips. If tips went away tomorrow, no waiter is going to staying making $7.25 an hour. Employers having to cover wages for those that don’t receive enough tips is an inconsequential part of it.