You may have heard of the recent movement in Washington lobbying for a higher minimum wage, but did you know that there’s a similar movement to raise the tipped minimum wage? According to the federal Fair Labor Standards Act (FLSA), all employees working in the United States are entitled to be paid at least the federal minimum wage of $7.25 per hour.
The minimum wage for tipped employees, though, such as waiters and bartenders, is lower, only $2.13 per hour, with the expectation that the tips earned by the employees, combined with wages, will add up to at least $7.25 per hour. If that does not happen, the employer is required to make up the difference. As millions of Americans have already experienced, though, living on only $7.25 per hour can be extremely difficult, if not impossible, and that remains as true for wait staff as for employees of other professions.
The practice of tipping has some up sides to it, but they mostly favor the restaurant and the customers, not the wait staff. Because the restaurant keeps its labor costs down by paying its waiters less than the normal minimum wage, it is then able to keep menu prices down. Customers also don’t have to worry about paying sales tax on the gratuities they pay, unlike the rest of the meal, and tips do have the potential to significantly boost the income of servers, but it rarely works out that way.
Because tips are left entirely to the discretion of the customers, they can tip well, poorly, or not at all. In theory, the gratuity paid is based on the quality of service provided by the waiter, but the reality is that there are many other factors outside of the waiter’s control that contribute to how well he is tipped, including appearance, age, and gender. Other factors, such as weather, can affect the number of customers a waiter has on any given day, which, in turn, has an effect on how much the waiter earns in tips that day. Continue reading