Palo Alto to reconsider minimum wage for tipped workers

Why not enforce the minimum wage for all Palo Alto employees, raise the price of restaurant items accordingly, and eliminating tipping?

How about also making the minimum wage only for those over 18. 16 year old students should not be subject to the minimum wage either.

Now that new microchip-
embedded credit cards are becoming the standard across the country, diners and bar patrons will have to make their tips known BEFORE their cards are swiped.

Gone will be the days of scrawling a hastily calculated tip on a receipt. Paying with a chip card will require customers to either tell servers a tip amount before a transaction is authorized or ask customers to key in a tip themselves if an establishment has a tableside checkout terminal.

Some restaurants may opt to eliminate tipping and raise prices accordingly.

Palo Alto, and America, will see how this shakes out over the next year or so.

Having worked in many restaurants when I was younger, almost every one required the tipped employees to share with the non-tipped. Easy thing to implement as the restaurant owner.

With minimum wages up, Obamacare available, Healthy SF surcharge, etc., I'm considering reducing tips to a few dollars for shuttling the order and food. The justification for 15%, 20% of a total bill just doesn't exist.

Terrible policy - it's cruel to the low-skilled. Those people need a healthy supply of entry level jobs to gain experience in the work force. High minimum wages, benefits requirements, etc. reduce the supply of entry level jobs.

If you want to help the working poor, give them money. Don't make it illegal for some of them to work.

Why not enforce the minimum wage for all Palo Alto employees, raise the price of restaurant items accordingly, and eliminating tipping?

I can assume that many restaurant
ibject to increasing the minimum wage, but at the same time people who work in downtown Palo Alto are now required to pay for long-term parking, therefore the minimum wage increase would help offset the parking fees. Also, some restaurants such as NOLA are using Obama Care to add a percentage to the total bill, without first informing the patrons therefore these establishments should pay their employees the higher minimum wage as I am certain that they are able to afford it.

I thought the way it worked for tipped workers is that there was a floor if their average tips per shift didn't exceed the minimum wage (ie a very slow night) they were required to be paid the minimum. This is similar to how many sales people in companies receive a very low base salary but make it up big time in commissions. That seems like an easy solution. Doesn't make sense to boost their base just because and change all the logistics of how a crazy tipping system works.

I'd rather pay more for the food & not tip at all. I dislike tipping 15-20% for meals including wine, since alcohol is already wildly overpriced. Many diners tip in cash & I don't believe all cash tips get reported as income. A server at one of our nice PA restaurants told me that his tips run $300+ per night on busy weekends and I think a lot of that is "tax free."

I would prefer to eat at a restaurant that paid it servers the standard minimum wage and tip less.

Raise the prices if necessary. Don't run the restaurant like a sweat shop.

My understanding is that it is illegal in California not to pay servers the minimum wage.

I assume that tip-sharing arrangements are allowed but the wage must be minimum wage without taking any tips into consideration.

Gennady, can you clarify? Also does this prohibition apply only to the CA minimum wage?
Are the restaurants just complaining about the $1 difference between CA and Palo Alto?

If I owned a restaurant, I would be embarrassed to admit I didn't pay my employees minimum wage.

Time for the USA to do away with 'tips' as part of the compensation like many other countries. Clean floors, restrooms are as important as the clean dishes the food is served on. Leave any of that out and you have a disastrous experience.

A tip should be reserved for unusual (over the top?) service, not the basic, everyday stuff. A restaurant without waitstaff is self service, with self service pricing. A car wash without the vehicle being clean at the end? That is their JOB if it is normal grime.

Sadly, it's hardly surprising to see a city council bow to well-financed special interests PACs like the California Restaurant Association. On Monday, we witnessed the same behavior in Mountain View during a study session on housing displacement.

I hope the Ekwall's are paying attention to what's going in re:tipping in other parts of the US restaurant biz.

Last week, Danny Meyer announced he'll eliminate tipping at all of his New York restaurants: Web Link

This is soon to be the new normal.

La Bodeguita (which already has relatively high prices) should plan for the day when they'll have to pay all of their staff directly and in full, and not rely on customer largesse to supplement worker pay.

I like that idea of no tips, but just add that cost into the prices on the menus. Then that puts the burden back onto the restaurant owners (where it should be) to figure that out...how much to add to their menu prices...but then that relieves us customers from having the tip angst/guilt trip to deal with. And that will make it much easier, as customers, to be able to sort it out and decide where we want to eat in the future. The total cost of eating out may be most important, but eating out with good food and service are also important.

Let the people speak!

Process question: National and State minimum wage laws have long dealt with this issue (employees that are expected to receive significant amounts of income from tipping). Minimum wage laws have lots of complications (for various reasons: some rational, some political).

1. Why are the restaurant owners seemingly bringing it up now? Were they not consulted during the formulation? Was their input ignored? Did they fail to provide input when queried?

2. How was this not anticipated in the original version? Even if the restaurant owners failed to respond, there should have been awareness by Staff and Council that this was a potential difficulty.

So these two guys come to our business and ask to talk to the manager. When I leave I ask him who they were. He says they were from a union. I think he said the union was called Unite Here, but I'm not sure about that because it doesn't sound like the name of a union. Anyway they said that our company could ignore the minimum wage law if we form a union. This doesn't make any sense because I thought unions were trying to raise wages. Is this even legal?

@Anonymous worker bee - you found out exactly why unions push for minimum wage, then exempt union employees. It is so they can go to non-union employers and say, allow unionization, and you get to pay lower wages. Employer wins, union now has more dues paying employees, so the union wins. You didn't think it was for the benefit of employees, did you?

I believe that California law forbids tip-sharing. The non-servers, e.g., busboys, dish-washers, kitchen staff, etc., make a comparative pittance.
That is the rationale for those restaurants which add a fee to the bill and abolish tipping.

Hilarious.

Restaurant margins are typically 3-6%. But of course, no one understands this on the city council. Not surprising for a knee-jerk reflexive liberal area.

In any case, restaurant service in 100x better here in the US because of tipping. All you need is for a reminder is to actually travel to other countries where tipping is not done and see how it really is.

Freakonomics has tackled the topic of tipping several times, see Web Link

They point to several studies showing the practice is unfair, e.g., attractive people get bigger tips, African-Americans get smaller tips, etc.

It would be interesting to see the city explore alternative models, but I would not expect any bold leadership from City Hall.

When I served as a waitress -- many years ago -- I did not like working for tips. I would have been far happier with a flat service charge or higher hourly rate.

Actually, the Freakonomics not only concluded that the practice of tipping is unfair; but that it should be illegal because it is highly discriminatory based on race, gender, age. The US forbids employers to set wages based on these parameters, but it allows the customers to set compensation based on this.

It should be illegal.

Richard
Title 351 allows tip pooling as long as it does not include owners or management in the pool. So a Dishwasher, busboy can be included, but the shift supervisor can not...even if they wait on you

Contrary to what someone above said, I think European service is much better because they know they only get tipped for excellent service or by Americans so they tend to do well. However, their idea of good service is culturally different from here. Never in Europe will you hear "my name is __ and I will be your server today". Their idea is to be more discreet than the wait staff here and less intrusive to the dining experience of the customer. They will seldom clear plates until the whole party have finished a course and will try not to interfere in the conversation of the diners. Their idea is to "wait" rather than to "serve" and culturally there is a difference. In the same way, Europeans here think the service is much too brash, and they are often poor tippers because it is outside their cultural experience to expect to tip for service - regardless of whether it is good or bad.

It is so much fun playing Santa Claus. Let's just give away money. Sorry, the real world doesn't work that way. The extra money being paid has to come from somewhere. It is up the Santas in government to find out where it will come from.

@Worker Bee ... Why do you think council put the union exemption in the minimum wage ordinance? Because the council and the staff are controlled by the unions. That's why city salaries, benefits and pensions are shooting through the roof. Of council members are going to give their union buddies a break. They want the unions to help them in the next election. One hand washes the other. Meanwhile, if your boss agrees to have this union come in, you're not getting a raise.

Service in high end european establishments are good. Just like eliminating tipping at Baume would not change service. Lower-end establishments? Not even close. The same is true in Asia.

As for making tipping illegal, typical knee-jerk solution. "There outta be a law..."

Tipping is going away, it's inevitable. It's the only way to mitigate the hue pay discrepancy between FOH and BOH....One day soon, all full service restaurants will dispense with tipping....Guaranteed.

Eating out is a "luxury" for my husband and me. Not because we cannot afford it, but because I love to cook and I can serve a number of great and healthy meals for $75. Hence, we visit only two favorite restaurants, a lovely Italian one and an excellent pizza place (since no matter how hard I try, I cannot make good pizza.)

So, we only go out if we want to celebrate a special occasion, such as our meeting day (45 years ago,) our wedding anniversary, a birthday, a visit from beloved family or friends from out-of-town. In both restaurants, we will easily give 20% to 25% tip on the total bill without taxes.

In The Netherlands, where I am from, the Government automatically includes a 15% service fee in the meal price (in addition to an 18% - 20% value added tax,) which I can support. However, in the past I found service in Dutch restaurants to be rather mediocre, as there seemed to be no incentive to provide good service. That has changed over the years, as the Dutch people began to add extra tips for servers who did well.

In this area of wealth, I do believe it would be good to include the server's portion in the meal prices, with room to add some extra tip. Good food and good service make your restaurant experience. They are completely interconnected.

I am always surprised when I see people nickel and dime the bill, only for a few extra dollars.

My belief is treat the servers right, and they will treat you right.

@rocco - are you sure getting rid of tips "the only way" to help? Are you aware of tip pooling?

If the Minimum wage applies to Pre-Tip Wages, then the Food Service industry will raise prices (and possibly indicate "Tipping Not Necessary, we pay Lawful wages' on the menus).

Tipping will then probably fall from common usage, WITHOUT a law banning it.

If government requires employers to increase employee salaries, which undoubtedly will lead to raising their prices, then I for one will no longer tip servers in Palo Alto. If the purpose of the ordinance is to provide servers with a livable wage, then they no longer need a gratuity.

So making it illegal is apparently non very enforceable, but it should be the owners/managers to delete it.
Again, tipping in the US inherently discriminatory which goes against the nature of our existing laws:
Web Link