Between Eagle’s player LeSean McCoy being under fire for leaving a 20 cent tip on a $60+ tab and Marriott hotels asking guests to tip their housekeepers, how much to tip has been on ongoing debate. In an hour-long restaurant visit, it might seem like your server doesn’t deserve much; but behind the scenes, your server is losing more money than you think.
Servers work for around $2.15 an hour, so they rely heavily on their tips. Each shift, their is no guarantee that your server will walk out with enough money to pay the rent that week or buy groceries that night. $2.15 is not a living wage. In some restaurants, the server is compensated minimum wage if they fall below that mark, but this depends on company policy. To understand how much of your “tip” is really a tip, we need to do some math. Let’s say your bill is $100, and you’ve consumed some alcoholic beverages during your visit. a 20 percent tip of your bill is $20. You only left $2 for your server. The restaurant you’re dining at requires a four percent tip-out to the bartender. Since you drank alcohol, your server needs to split four percent of your bill with the bartender. Four percent of your $100 bill means the server owes the bartender four dollars; so the server literally has to pay for your meal. In some states, the company is even allowed to subtract the credit card processing fee from all credit card transactions. A few dollars here and there adds up quick!
How about the automatic gratuity that you complain about for big parties and catering orders? Under federal law in most states, that included gratuity isn’t even considered a tip. The employer is allowed to keep that money as a “service charge” and employees have no legal right to that money. When you don’t tip your server who graciously and patiently waited on your party of 20 or more, they might be walking away with literally no money. A lot of people who rack up high tabs also try to “dine and dash”– leaving without paying for anything. Not only does this concept hurt the restaurant itself in covering food expenses, the server then has to tell management that they’ve been stiffed. The server may have to cover the entire bill themselves. Certain restaurants even have a “three-strike” policy which means if the server has three guests walk out on them they lose their job. To clarify on company policies, ask the server or management before the end of your meal.
Your server needs the money more than you think. The Wall Street Journal reported that almost 25 percent of the 2.4 million wait staff in the United States lives in poverty. While we do hear of stories like Loran Lopez’s $2,000 tip at the Logan’s Roadhouse she works at in Fort Smith, Arkansas the truth is generous tippers are few and far between. Many restaurants with bussers, hosts, bartenders and servers have a tip pool. This means that all of the server’s tips get combined at the end of the night and split between all employees. Others require all servers give back a precentage, sometimes upwards of 20 percent, of their tips to divide between all staff. When you leave a miniscule tip, you hurt all of these people.
The bottom line is that there are more hidden fees and company policies that you might not be aware of while you dine in at your favorite restaurants. Next time it comes to filling out the tip line, keep in mind where your money is really going.