Our No-Tipping Policy
Taking the High Road
To Our Guests,
Before I opened Casellula in 2007, I was a career server who made my living from tips. I dine out, and tip well, in the U.S. and abroad, regularly, so I understand the tipping tradition we have in this country from all sides. I do not take this issue lightly.
In 2015 I joined the advisory board of RAISE (Restaurants Advancing Industry Standards in Employment), an organization of restaurant owners whose mission is to promote the high road for restaurant operators, including higher wages and working conditions for workers; opportunities for promotion; and harassment-free workplaces.
After years of study and consideration and based on my experience with RAISE I have come to the conclusion, as have hundreds of other restaurant owners, that it is time for the restaurant industry to move beyond tipping. Recently, a customer told me that he liked that we are “not gratuitous.” I like the term, so I am going to use it. Casellula is not a non-gratuitous Restaurant.
Being non-gratuitous is only part of a larger effort to make the way that restaurant meals are paid for, the way that restaurants are run, and the way that employees are paid make more sense for everyone, from the servers and the dishwashers to the guests and the owners.
When most people hear the words, “eliminate tipping,” what they really hear is, “take money away from servers.” That is neither the goal nor the outcome of our no-tipping system. To the contrary, our goal is to make sure that servers make a good steady income and are treated with the respect they deserve. So far, at Casellula, it is working.
The federal minimum wage for tipped employees is a mere $2.13 per hour. In Pennsylvania it is $2.83. By forcing servers to accept a lower wage than other workers we are failing to respect them as the professionals that they are. By offering servers a fair wage when they are hired, giving them performance goals, and offering raises to those who deserve them, we can manage our business like other businesses do and treat our employees with the respect that workers in other industries get.
Whether restaurants will close en masse and the economy will crumble if we eliminate that sub-minimum wage and instead pay all of our workers a fair wage, as the big chains and the National Restaurant Association want you to believe, is not a mystery. In the seven states that do not have a lower minimum wage for tipped workers, all of them in the Western US, restaurant health and growth are greater than the national average; restaurant workers make more money, suffer less sexual harassment, and rely less on food stamps; guests actually tip more; and the overall economy is stronger. Raising the wages of workers, it turns out, is good for everyone.
Tipping isn’t really about good service anyway; it is about pandering to guests to extort money. Studies have shown that tips do not actually reflect the level of service. Most people tip what they tip. For some that’s 15% or doubling the tax; for others it’s 20% on the pre-tax amount. Generous diners leave 20% or more on the post-tax amount. But tipping is not actually used to “reward good service.”
Although they generally phrase it differently, many diners like tipping because it gives them control over servers, emphasizing their own power and social position, and putting the server in the humiliating role of having to dance for their dollars. It will shock no one to learn that studies have shown that women with larger breasts and smaller bodies get bigger tips than women with flatter chests and/or larger bodies. Female servers get better tips when they touch male customers and allow themselves to be touched. That's institutional sexual harassment.
The racist effects of tipping range from servers of color being tipped less on average to servers assuming that customers of color will tip less and therefore providing less diligent service. By supporting the tipping system, we are implicitly supporting these unacceptable behaviors.
In the hands of benevolent guests, which is to say most of our guests, tipping can be used to reward excellence. But in the hands of too many it is used to punish, manipulate, control, and abuse. Tipping focuses all involved in the dining experience on the power discrepancy between customer and server. For many in the industry the money is good, so they tolerate it, but working for tips is often humiliating.
There is a commonly held belief that if servers aren’t working for tips they will have no reason to work hard. This idea is silly on its face. No one has ever landed a plane poorly, or half-assed a heart surgery, because they weren’t getting tips from their customers. Most people in most jobs in most industries work not for tips but for hourly wages or salaries and the results are exactly the same as in restaurants: some employees are good and others are not. Businesses keep and promote the best.
The theory doesn’t hold up even within the confines of the restaurant. Cooks, porters and dishwashers work their asses off and they aren’t working for tips; they aren’t even working for a decent wage. (Did you know that it is illegal to share tips with cooks, porters, dishwashers or other back of house employees? This leads to a huge discrepancy between front and back of house pay. ) The truth is that we want a restaurant full of good, honest, hard-working people who will do their best all the time because they are being paid well and it’s the right thing to do, not lazy corner-cutters who will do their jobs only for the promise of tips, like rats suffering electric shocks for food pellets.
For years, the practice of tipping has allowed owners to benefit by paying servers less than the actual minimum wage. But that benefit has come with costs. Paying the sub-minimum wage is an administrative and management headache and it opens us up to litigation. Federal labor laws define who is allowed to get tips and dictate what tasks those who do accept tips are allowed and not allowed to perform. This has meant, among other restrictions, that cooks and dishwashers can’t benefit from busy nights by sharing in big tip pools and servers can’t be asked to spend more than 20% of their time doing tasks that are not “face to face” with customers. Complying with this requirement is nearly impossible, as measuring face to face time is a game of estimation at best.
By not taking the tip credit (the difference between tipped minimum wage and regular minimum wage) and instead paying our servers at least the full minimum wage (we actually pay far more than that), we can manage our labor in the most logical way, without worrying about the state and federal restrictions, or fearing that we will get sued down the road for not complying exactly with the confusing laws.
Tipping is an unfortunate tradition for diners. For many, calculating a tip at the end of the meal is a stressful experience. They aren’t always sure how much to tip, they worry that they will be judged by their companions, or they are too buzzed to accurately do math. Dilemmas like how much to tip on complimentary items or when paying partially with a gift card can be complicated for some. Ending what should be a satisfying, relaxing, pleasant experience (a meal) with a test that can be awkward and challenging, both mathematically and socially (the tip) isn’t hospitable. Eliminating tipping eliminates this added stress.
There are essentially two ways to institute a no tipping policy. We could have added a “Service Charge,” but we decided to raise our prices enough that we could pay our whole staff fairly. Although customers currently enjoy seeing menu prices that are 15% - 25% lower than what they will actually pay, I believe that in the future customers will enjoy knowing that the price they see on the menu is an accurate reflection of what they will be paying.
Becoming non-gratuitous is good for the kitchen staff. Taking the responsibility for deciding how our staff is paid out of the hands of our customers allows us to make more sustainable choices about how to pay all of our employees. Unlike a system where tips go only to servers, we will be able to pay our entire staff wages that are fair based on their experience and abilities and the business’s success overall. Kitchen staff in our industry have made far too little money for far too long, so paying them more is the right thing to do.
Eliminating tipping is better for our servers. They will no longer need to live the feast or famine life of the tipped employee. They will get paid the same per hour on slow nights as they are on busy nights. They will have the freedom to trade a Friday night shift for a Tuesday night shift, knowing it won’t cost them a lot of money. They will be able to earn raises, not just rely on the whims of their patrons to determine their wage. They will be able to plan for their future knowing what their income will be.
There are downsides. Because we are eliminating tipping and increasing our base prices, our guests’ sales tax burden will increase. Essentially, the tip will now be subject to sales tax, which has previously not been the case. That will account for approximately a 1.7% increase in the final payment.
Businesses whose employees accept tips get a FICA credit on their federal taxes. I don’t fully understand how that works, but our accountant tells me that our federal income taxes will increase by about $24,000 per year by choosing all-inclusive pricing. Our Workers Comp Insurance, which is based on sales, will also increase. These are burdens on the business, but those cost, like all costs, will in one way or another be shared by our customers.
Don’t be scared; this is not a bold leap into the unknown. In fact, we are following a model that has developed over centuries and is used by almost every other business in the world. When someone is hired for any position, including server, they are offered an hourly wage. They will be taught the requirements of the job, given goals to achieve, and given regular raises if their performance is good and they achieve their goals. More experienced people might be hired at higher wages than newbies. Employees will make more money the longer they stay with us. It sounds revolutionary until you think about it and realize that it sounds totally, completely normal. This is how businesses are run.
We acknowledge that our system will not be perfect; no system ever has been. We have tried to foresee every potential issue, but we are certain that we have missed at least a few. There will be individuals who benefit and those who don’t, but we hope to keep the downside to a minimum.
Tipping is an ingrained habit for servers and customers in the United States, so changing it societally will be a struggle, but we will all be better off if we can create a future in which dining out is more enjoyable for our guests; our lowest paid workers earn a true living wage; and servers are treated with the respect that they deserve and are paid just like professionals in all other industries that don’t involve dancing on a pole.
I understand that most diners feel a need to reward servers for a job well done. I fell that need when I dine out, too. In the absence of tipping here at Casellula, please go online and leave a rave review on Yelp, Trip Advisor, or any other site, and tell your friends to dine here and at other high road restaurants.
Thank you for your business. It is our pleasure to serve you.
For more on this movement check out “Forked: A New Standard For American Dining.”