The bottom of the jar: The truth about tipping

Reading time: 5 minutes.

Tip or gratuity jar
Photo by Sam Dan Truong on Unsplash


The hypothesis for the waiter/restauranteur/customer debacle is this: It is legal to pay any service worker well below minimum wage, and the rest has to be earned by way of gratuity or tipping from the end customer.


The reality, according to a Reddit post here, is : “…If a waiter/waitress’s wages plus tips do not equal the minimum wage for his/her hours worked, the law requires the restaurant to increase cash wages for that pay period until it equals [minimum wage].” This law, called the Fair Labor Standards Act, is confirmed on this government page here.

At least in the United States, employers have to pay waiters, by law, at least minimum wage, even if they don’t get any amount in tips. In the event that a service worker does not accrue the necessarry amount in tips to supplement his or her base wage and go over the minimum wage, the employer must pay the difference to the worker, such that the worker ends up earning the minimum wage.

Why and when did the habit of offering gratuities start? Let us explore this.

What are tips and When did they start

According to Wikipedia: “A gratuity (also called a tip) is a sum of money customarily given by a client or customer to certain service sector workers for the service they have performed, in addition to the basic price of the service.”

Tipping is attributed to social custom and in some places, it is not expected and even often times discouraged. It is seen as a way to incentivize good work, although it can also be seen as derogatory. It has been shown in studies that the practice of tipping is often discriminatory or arbitrary. The amount you receive as a tip could be based on your race, sex, and body type, and not on the quality of service provided.

The history of Tipping

Before the early 20th century, tipping was viewed as not being consistent with the values of the current egalitarian, democratic society. Tipping was seen as a bribe in order to try to get an employee to do something that was forbidden. In 1919, hotels and restaurants lost the revenue of selling alcoholic beverages by the introduction of Prohibition. As a result of this, business owners started welcoming tips to supplement employee wages. Tipping did not arise because of servers’ low wages. This is a widely accepted misconception. Instead, the reality is that the occupation of a waiter or server was fairly well compensated in that era.

For a short period of time (1909-1926), six states, mainly in the South, introduced laws that made tipping illegal. The government repealed eventually repealed this laws, as it proved difficult to enforce them. Some believe that “This whole concept of not paying them anything and letting them live on tips carried over from slavery.”

On Tipping: A conclusion

To conclude, offering tips to our service workers started as a custom to validate good work. In some instances, people used tipping as an instrument for bribery. It is not a way to exempt business owners from paying minimum wage. It is not mandatory. By law, employers have the responsability to pay service workers at least the federal minimum wage.

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