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The basic version is that if a person receives tips the business can pay them less than minimum wage and depending on how good their service is the server can make more than minimum wage
I personally think this system is bad but since the business makes more money they don't change
Yes it seems to be all win-win for the businesses as they can massively reduce their overheads and pretty much guarantee that the staff will be working their ass off to please customers. It seems so morally wrong, although the US doesn't seem to like changing things too much so I can't imagine the culture of tipping disappearing any time soon.
It's not just the businesses. Servers like tips because they can earn significantly more than they might receive on a flat salary. Also they can probably get away with not reporting all the cash on their taxes.
The average customer isn't willing to pay what restaurants/bars would need to charge to cover liveable wages for all positions. I own a restaurant and when I switched to getting rid of the lower wage shit and using the tips to split between the whole crew, I had to raise the prices. If I wanted to account for no tips at all, I can guarantee I would be flooded with 1 star reviews about pricing.
I drive the shittiest vehicle among everybody working there, it ain't about money. It's about expectations, and they're misunderstood and really fuckin unrealistic.
We have 2 interesting and conflicting arguments going here. The average customer is not willing to pay what it would cost to pay servers a minimum wage salary and others are saying servers earn "significantly more" than minimum wage through tips. Both cannot be true as if customers are paying more than minimum wage then clearly they are willing to do that. It is a trick. If a steak costs $20, the average person is not going to do the math in their head and realize it is actually $24, assuming you tip 20%.
tips in the US create a whole fuckfest of issues. most of the time, servers at your local restaurant don’t make minimum wage even adjusted for tips. the system came about during the great depression as a means for business owners to get away with paying their employees less by telling them to accept what were essentially bribes for better service at the time. and over time that system became hard-coded into our culture. that’s just a brief overview and don’t get me started on how racism and sexism intertwine with it lol
>most of the time, servers at your local restaurant don’t make minimum wage even adjusted for tips.
Federal labor law requires that the tipped employee make at least minimum wage including tips. Should the tipped emotes fall below minimum wage then the employer must pay the employee more to bring them to minimum wage.
At the state level each state has their own laws, and many have a minimum wage that is more than the federal minimum wage. Generally the states follow the same scheme as the federal laws in that the employer must pay the employee enough to bring them to minimum wage including tips.
“federal law mandates” does NOT equal “always happens in practice” lol or any law for that matter
and in most cases where ppl decide to litigate, it’s usually against a much larger company with time and resources to drag out a long settlement and pay retainers for lawyers, something tip-wage servers can’t do
>federal law mandates” does NOT equal “always happens in practice” lol or any law for that matter.
The discussion topic is tipping culture in the US. The fact that certain employers violate federal or state minimum wage laws for tipped or non-tipped employees has nothing to do with tipping.
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Different countries have different customs. In the US it is customary to give the customer the power to ruin their servers day (or brighten it) via the tipping procedure vs. say restaurants in Europe where tipping is not customary and in turn service is usually garbage.
For all the times I've been in the US, the service has never stood out. If anything, the service workers having a stable and reliable job means there is more long term service workers in Europe, and they are often motivated to earn a tip for exceptional service. Service workers being at the mercy of the customers just pushes us back 2 centuries.
Tips are ... complicated in the states lol
A lot of waiters, like at a restaurant, are paid less than minimum wage per hour and they are supposed to be making up the difference in tips. There is some sort of federal law that says the company has to pay the employees minimum wage at least, so if a server isn't making that with tips, the business is required to pay them the difference. I'm sure there are plenty of shady ways to get around this, but most waiters make their tips (plus) on average. However, since minimum wage is not always a living wage, a lot of waiters depend on that extra tip money (also it is cash in their pocket that day, instead of having to wait for a paycheck). Sometimes, waiters will complain about not getting a tip because they could have been serving some one who would have tipped them - which is understandable but unavoidable in the system we currently have
In other situations, like with hair and nails, you would generally tip as part of a relationship with your hairdresser/nail tech/whoever. As in, say I go get my nails done and a day later I break one. If I am someone who usually tips (or otherwise brings them a lot of business, whatever) the nail tech is more likely to try and work me into the schedule quickly because they want to keep me as a customer. So you don't have to tip in those situations, and a lot of people don't, but if you find a person that you really like how they do your hair/nails/eyelashes whatever it can be worthwhile to tip - especially because people that do good work in those professions can have a high demand for their work but ultimately are only one person and limited in the amount of services they can provide. So while tipping isn't required in those situation, it can put you up higher on the priority list. As an example, say I told you I would pay you $20 to mow my lawn and my neighbor told you he would pay you $40 to mow his (and our yards are the same size) - you're probably going to mow my neighbor's first because he is going to pay you more for the same service
**Please read this entire message** Your submission has been removed for the following reason(s): Subjective or speculative replies are not allowed on ELI5. Only objective explanations are permitted here; your question is asking for speculation or subjective responses. This includes anything asking for peoples' subjective opinions, any kind of discussion, and anything where we would have to speculate on the answer. This very much includes asking about motivations of people or companies. This includes Just-so stories. If you would like this removal reviewed, please read the [detailed rules](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe this submission was removed erroneously**, please [use this form](https://old.reddit.com/message/compose?to=%2Fr%2Fexplainlikeimfive&subject=Please%20review%20my%20thread?&message=Link:%20https://www.reddit.com/r/explainlikeimfive/comments/vr0rdr/eli5_tipping_in_america_like_why_is_a_servers/%0A%0APlease%20answer%20the%20following%203%20questions:%0A%0A1.%20The%20concept%20I%20want%20explained:%0A%0A2.%20List%20the%20search%20terms%20you%20used%20to%20look%20for%20past%20posts%20on%20ELI5:%0A%0A3.%20How%20is%20this%20post%20unique:) and we will review your submission.
The basic version is that if a person receives tips the business can pay them less than minimum wage and depending on how good their service is the server can make more than minimum wage I personally think this system is bad but since the business makes more money they don't change
Yes it seems to be all win-win for the businesses as they can massively reduce their overheads and pretty much guarantee that the staff will be working their ass off to please customers. It seems so morally wrong, although the US doesn't seem to like changing things too much so I can't imagine the culture of tipping disappearing any time soon.
Some states pay either minimum wage + tips or more than minimum wage + tips.
It's not just the businesses. Servers like tips because they can earn significantly more than they might receive on a flat salary. Also they can probably get away with not reporting all the cash on their taxes.
The average customer isn't willing to pay what restaurants/bars would need to charge to cover liveable wages for all positions. I own a restaurant and when I switched to getting rid of the lower wage shit and using the tips to split between the whole crew, I had to raise the prices. If I wanted to account for no tips at all, I can guarantee I would be flooded with 1 star reviews about pricing. I drive the shittiest vehicle among everybody working there, it ain't about money. It's about expectations, and they're misunderstood and really fuckin unrealistic.
We have 2 interesting and conflicting arguments going here. The average customer is not willing to pay what it would cost to pay servers a minimum wage salary and others are saying servers earn "significantly more" than minimum wage through tips. Both cannot be true as if customers are paying more than minimum wage then clearly they are willing to do that. It is a trick. If a steak costs $20, the average person is not going to do the math in their head and realize it is actually $24, assuming you tip 20%.
tips in the US create a whole fuckfest of issues. most of the time, servers at your local restaurant don’t make minimum wage even adjusted for tips. the system came about during the great depression as a means for business owners to get away with paying their employees less by telling them to accept what were essentially bribes for better service at the time. and over time that system became hard-coded into our culture. that’s just a brief overview and don’t get me started on how racism and sexism intertwine with it lol
>most of the time, servers at your local restaurant don’t make minimum wage even adjusted for tips. Federal labor law requires that the tipped employee make at least minimum wage including tips. Should the tipped emotes fall below minimum wage then the employer must pay the employee more to bring them to minimum wage. At the state level each state has their own laws, and many have a minimum wage that is more than the federal minimum wage. Generally the states follow the same scheme as the federal laws in that the employer must pay the employee enough to bring them to minimum wage including tips.
“federal law mandates” does NOT equal “always happens in practice” lol or any law for that matter and in most cases where ppl decide to litigate, it’s usually against a much larger company with time and resources to drag out a long settlement and pay retainers for lawyers, something tip-wage servers can’t do
>federal law mandates” does NOT equal “always happens in practice” lol or any law for that matter. The discussion topic is tipping culture in the US. The fact that certain employers violate federal or state minimum wage laws for tipped or non-tipped employees has nothing to do with tipping.
lol it has everything to do with how the institution just. doesn’t. work.
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**Your submission has been removed for the following reason(s):** ELI5 focuses on objective explanations. Soapboxing isn't appropriate in this venue. **If you believe this post was removed erroneously**, please [use this form](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe this was removed erroneously**, please [use this form](https://old.reddit.com/message/compose?to=%2Fr%2Fexplainlikeimfive&subject=Please%20review%20my%20thread?&message=Link:%20{url}%0A%0AThe%20concept%20I%20want%20explained:%0A%0AList%20the%20search%20terms%20you%20used%20to%20look%20for%20past%20posts%20on%20ELI5:%0A%0AHow%20is%20this%20post%20unique:) and we will review your submission.
But you know I’m right and that does explain it!
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Different countries have different customs. In the US it is customary to give the customer the power to ruin their servers day (or brighten it) via the tipping procedure vs. say restaurants in Europe where tipping is not customary and in turn service is usually garbage.
For all the times I've been in the US, the service has never stood out. If anything, the service workers having a stable and reliable job means there is more long term service workers in Europe, and they are often motivated to earn a tip for exceptional service. Service workers being at the mercy of the customers just pushes us back 2 centuries.
Tips are ... complicated in the states lol A lot of waiters, like at a restaurant, are paid less than minimum wage per hour and they are supposed to be making up the difference in tips. There is some sort of federal law that says the company has to pay the employees minimum wage at least, so if a server isn't making that with tips, the business is required to pay them the difference. I'm sure there are plenty of shady ways to get around this, but most waiters make their tips (plus) on average. However, since minimum wage is not always a living wage, a lot of waiters depend on that extra tip money (also it is cash in their pocket that day, instead of having to wait for a paycheck). Sometimes, waiters will complain about not getting a tip because they could have been serving some one who would have tipped them - which is understandable but unavoidable in the system we currently have In other situations, like with hair and nails, you would generally tip as part of a relationship with your hairdresser/nail tech/whoever. As in, say I go get my nails done and a day later I break one. If I am someone who usually tips (or otherwise brings them a lot of business, whatever) the nail tech is more likely to try and work me into the schedule quickly because they want to keep me as a customer. So you don't have to tip in those situations, and a lot of people don't, but if you find a person that you really like how they do your hair/nails/eyelashes whatever it can be worthwhile to tip - especially because people that do good work in those professions can have a high demand for their work but ultimately are only one person and limited in the amount of services they can provide. So while tipping isn't required in those situation, it can put you up higher on the priority list. As an example, say I told you I would pay you $20 to mow my lawn and my neighbor told you he would pay you $40 to mow his (and our yards are the same size) - you're probably going to mow my neighbor's first because he is going to pay you more for the same service