What about tips these days? Local entrepreneurs, experts weigh in – InForum

FARGO — Emily Driscoll has been thinking a lot about tipping lately.

The owner of Fargo coffee shop Moonrise Cafe says discussions online and in the community about tipping can be frustrating. People who complain about tipping or say restaurants should pay workers more don’t always understand the economics of running a restaurant, she said.

“In terms of food, it’s very difficult to pay people enough to survive without those tips,” Driscoll said.

Tipping local businesses helps them keep track of labor costs, Driscoll says, and it shows appreciation for the services a restaurant provides, from making the food and drinks to providing utensils to eat it with.

Alyssa Goelzer / Forum file photo

“The culture of tipping isn’t changing anytime soon; people should expect to tip 20% when they eat out,” Driscoll said. “It is greatly appreciated by employees if people take this into account.”

Americans’ feelings about tipping are complex, said Juwon Choi, an associate professor of hospitality and event management at North Dakota State University. Opinions on tipping are determined by factors such as individual experiences, cultural backgrounds and personal beliefs.

“Some people appreciate the ability to directly reward good service,” says Choi. “Others feel uncomfortable with the practice and view it as inconvenient or unfair.”

In general, people are becoming more frustrated with tipping, especially when ordering takeout.

“Customers don’t feel like they’re actually getting service because they’re not dining on site, but you’re still expected to tip,” says Choi.

Little Brother, an Asian fusion restaurant in downtown Fargo, is seeing a mix of customers who leave tips and those who don’t, says manager Sasilak Suriwong. Food is ordered at the counter and many customers order food for pick-up or pick-up.

“A lot of customers tip,” Suriwong said. “Only a few customers don’t tip because it’s not a full-service restaurant.”

She has noticed that regular customers tip more.

At Little Brother, tips are shared among all employees in the restaurant, Suriwong said. Cashiers can take orders, but back-of-house employees prepare and package the orders for pickup.

“The chef and dishwasher can also get the tips, so they are happy with that,” Suriwong said.

In recent years, more and more restaurants have started displaying tip percentage options on digital payment screens, Choi says.

“It makes the tip more noticeable during the transaction, so customers may feel more pressure to leave a tip if it’s right in front of them, especially if others are around and a tip is being given,” said Choi.

Making tipping a default may annoy some customers, but for others it can make tipping more convenient.

“It really depends on people’s personality traits,” Choi said.

Tipping 15-20% in restaurants is the norm in the United States, she said. In bars, people usually tip $1-$2 per drink. For food delivery, a standard tip is 10-15% of the total, or a flat fee of $2-$5 depending on the complexity of the delivery. In hotels, it’s common to tip $1-$2 a day for housekeeping and bellhop services, Choi said.

Minnesota and North Dakota have different minimum wage rules for tipped workers.

Minnesota requires employers to pay tipped employees the full state minimum wage before tips. According to the Minnesota Department of Labor and Industry, the minimum wage in Minnesota is $10.85 for large employers and $8.85 for small employers.

North Dakota has a lower minimum wage for tipped workers. The state minimum wage is $7.25, but for workers who normally earn more than $30 in tips per month, the minimum wage is $4.86, according to the North Dakota Department of Labor. Tips earned plus direct wages paid by the employer must equal the full minimum wage of $7.25.

According to the U.S. Department of Labor, the minimum wage for tipped workers who normally earn more than $30 in tips per month is $2.13. Employers using the federal minimum must ensure that tipped employees earn at least $5.12 per hour in tips to meet the standard minimum wage.

“I feel that customers are now responsible for bridging the gap between low wages for service workers. It is not a reasonable income for workers because tipping has become a norm in the service industry,” Choi said. “The point is that this has led to tipflation over time.”

“Tip inflation,” Choi said, is the phenomenon in which typical tip amounts gradually increase over time.

“This happens for a variety of reasons, like obviously inflation, cost of living and things like that, and changing societal norms,” she said. “I think this could create pressure for others to follow suit, which could now lead to a cycle of increasing tip amounts.”

Jenny Olson, general manager at Marge’s Diner, saw the balance between paying employees more and other financial considerations in a restaurant.

Employees at the sit-down breakfast and lunch restaurant have a higher base wage than the state minimum wage of $4.86 for tipped employees, and the tips are distributed among anyone who works shifts.

“It’s a really good model so that we can make sure that people in the service industry are paid a higher hourly wage than normal,” Olson said.

Tips provide employees with the money to pay their bills, Olson said.

“In today’s economy, the hourly rate we pay is not enough; we would have to raise our menu prices that high to make that possible,” Olson said.

Like Driscoll, Choi said tipping isn’t going away anytime soon.

“Many people can agree that tipping is likely to be around for a long time, and I understand why so many restaurant and hospitality workers rely on tipping to make a living because it is such a low minimum wage for employees who are tipped,” Choi said.