Restaurant Bans Tips for Waiters, but it's Not as Bad as You Think

June 11, 2014: Who knew banning tips could actually be beneficial for waiters.

Abolishing Tipping Culture Could Benefit Service Industry Workers

What’s worst than standing up for hours on end every day, walking and carrying loads after loads of dishes, serving people with a smile and still making less money than is needed to feed yourself? Nothing. Which is why for a lot of people the news that a restaurant in Kentucky has banned people from tipping comes as a big surprise. After all, if we take away tips from servers and waiters, who notoriously make minimum wage, how would it work?

The answer is, fortunately and surprisingly, quite straight forward.

The restaurant in question is Packhouse Meats, which now displays "No tipping" signs all over its dining area to discourage its patrons from tipping the wait staff. However, this move puts both the restaurant and the waiters into a very good position..

"I've heard the horror stories — $3 left on a $100 tab," Bob Conway, Packhouse Meats' owner, told the Cincinnati Enquirer. "How much a server makes has nothing to do with how hard they work. Servers had quit because they couldn't make ends meet."

The minimum wage in the US at the moment is $7.25 per hour, but Packhouse Meats has bumped its employers' salary to $10 per hours so that they don't suffer when thrifty diners visit. Moreover, in order to tempt the servers to provide excellent service to the customers, an alternative payment mode has also been put on offer.

Instead of being remunerated on an hourly basis, Packhouse Meats waiters can take a 20 percent cut from the bill charged to the customers they serve. On pay day, whichever amount of the two payment models is higher, gets credited to the workers' account. The commission amount is usually much higher than the hours logged, and so Packhouse employees end up getting paid $15 per hour on average. Which, for a lot of them, was unthinkable before the practice was put into place.

Research has found that tipping culture is very discriminating and usually incorporates the waiters' ethnicity and background. For instance, colored employees always get tipped less than their Caucasian counterparts. To counter these negative tendencies, Packhouse Meats has used a very practical and intelligent solution, which should be adopted by more eateries.

This is definitely an option a lot more restaurants need to look into.

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