As pandemic customs change, customers wonder how much to tip

ASHEVILLE, N.C. – With restaurants aiming to stay staffed during a historic employment crisis, many that qualify are advertising themselves as "living wage." Others are adding automatic service charges to supplement wages and lure in staff with the promise of better pay. 

But the quick changes seem to be causing confusion. 

In early July, for example, a North Carolina, TikTok user, aka James Butler, @wellandsepticlife, asked his more than 1 million followers whether he should tip at North Carolina's Blue Mountain Pizza, certified by Just Economics as a "living wage employer."

"What do you do in that situation?" he asked. "Here the servers make good money, so why would I tip?"

Tipping is a custom with no real rules, but the Emily Post Institute recommends 15%-20% for sit-down service. Most industry professionals say 20% is standard, including Eater chief critic Ryan Sutton, who says 20% before tax should be the minimum.

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Those customs should also be followed at Blue Mountain, where servers rely on tips for their income.

A restaurant can be living-wage-certified via nonprofit Just Economics if workers make $17.30 an hour or $15.80 with employer-provided health insurance. Part of that cash can come in the form of tips.

To stay certified, restaurants must pay servers the difference if their hourly wage falls short of a living wage, but tipped employees may still earn an hourly subminimum wage on their paycheck. In North Carolina, that's less than $3 an hour. 

Federal law mandates only that servers, between tips and their hourly pay, make at least minimum wage. An employer must pay the difference if not.

Servers do 'very well'

Matt Danford, who opened Blue Mountain Pizza in March 2004, said he pays his servers the subminimum wage, but he's never had to supplement server pay. That's mostly because they're great at their jobs and Danford's customers tip accordingly.

"Our servers do very well," he said, adding that his staff is pleased with the pay structure.

Even so, staffing remains a challenge.

"For 15 and a half years, I knew how to run this place like the back of my hand," he said. "After the pandemic hit, it's like we've reopened a new restaurant. Nothing's the same."

It costs more to do business now, mostly because of managing higher wage expectations, he added.

"This is the new reality; salaries have gone up and are going to stay up," he said. 

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The benefits of 'service fees'

In most cases, if a gratuity is included in the cost of your food or as a service charge, it will be clearly stated.

Customers generally don't complain about the automatic gratuity and, in most cases, add approximately 5%-7% on top of the 10% service charge, appropriate for counter service workers. 

In the past, front and back of the house workers split pooled tips, which made it harder to hire cooks who tend to feel most comfortable with a dependable hourly wage, Green Sage founder Randy Talley said.

Talley now pays back-of-the-house workers a bit more, while tips stay with counter workers, who make at least minimum wage. With tips added, pay generally exceeds living wage for employees with employer-provided benefits.

No longer 'king of the castle'

That same kind of psychology is at work at Bhramari Brewing, where customers now see a 15% service charge as a line item on their check.

That helps emphasize that service staff members are professional servers, not servants, said sales manager Allison Simpkins.

"We want people to understand what they're paying for," she said. "It's been too long; people feel like they're the king of the castle."

The service charge is also a way to keep prices in line with those of other breweries while supporting higher pay. A 15% price increase on a burger or a pint of beer, for example, would stand out in such a brewery-heavy town. 

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The impetus was finding a way to equitably pay all employees, he said. With dining room servers and back-of-the-house workers splitting the service charge, most employees make $20-$25 per hour. That relatively even pay has helped erase friction that can develop between the front and back of the house.

"Getting rid of that model encourages teamwork," Bhramari Brewhouse founder Josh Dillard said. "We're all on the same level and working hard toward the same goal."

Since 20% is the standard for tipping for full-service dining, many diners generally toss an extra few percentage points on top of the 15%, Dillard said. 

Adding that service charge hasn't meant that the restaurant pays employees a lower hourly wage, he added. 

"We pay the same if not more, but we're able to give people a living wage plus without ruining our business," he said. "A lot of people don't understand how much running a restaurant costs."

Eliminating tips altogether would lead to "astronomical" price increases to cover the cost of running a food business, he said. 

Simpkins said the issue of how to supplement pay to retain staff continues to be a delicate balancing act.

"We don't necessarily think this will be the final model forever," she said. "It's a work in progress."

But, Dillard added, "This feels like the future."

Follow Mackensy Lunsford on Twitter: @mackensy.