RESEARCH STARTER

Tipping and gratuity

Tipping, or gratuity, is the practice of giving additional money to service workers beyond the base price for their services, commonly observed in industries like restaurants, hospitality, and personal care. While not mandatory, tips are an essential component of many service workers' incomes, especially in the United States, where tipping conventions often suggest gratuities ranging from 15% to 20% of the total bill. The custom of tipping has its roots in medieval Europe, gradually gaining popularity in the U.S. after the Civil War when American travelers returned from Europe. However, tipping has a controversial history in America, with strong sentiments against it resulting in anti-tipping movements in the early 20th century.

In recent years, some establishments have begun eliminating tipping in favor of higher wages, sparking debates about the implications for service quality and employee earnings. This shift has met with mixed reactions from both patrons and workers, reflecting the complex dynamics of service industry compensation. Internationally, tipping practices vary widely, with some cultures viewing tipping as unnecessary or even offensive. Overall, the topic of tipping and gratuity continues to evolve, reflecting broader conversations around worker rights, compensation, and social norms in service industries.

Full Article

Tipping is the act of presenting a sum of money in addition to the base price for services. Gratuity is another word for "tip." Workers in the service industry, such as food servers, hair stylists, taxi drivers, hotel workers, and valets, receive tips for the services they provide. While tipping is not mandatory, tips are usually part of many workers' incomes. Tipping rules vary by industry and country. People generally tip based on the type of service they receive—more for excellent service, less for poor service. The custom of tipping dates back to Europe during the Middle Ages but did not reach the United States until the nineteenth century. It has a contentious history in the United States that sparked an anti-tipping movement. Beginning in the 2010s, some US employers in the restaurant service industry banned tipping and instead paid their employees higher wages (equal to or above the regular federal minimum wage of $7.25) than the federal minimum tipped wage of $2.13 per hour. The federal minimum tipped wage has not increased since it was established in 1966.

Brief History

Tipping began in Europe as a practice of the wealthy who gave an allowance to those socially inferior. During the Middle Ages, European masters began to tip their servants a small amount of money for their worthy service. By the sixteenth century, guests of wealthy Europeans were obligated to tip the servants who hosted them during their visits; this tip was called a vail and was in return for the servants having to perform extra work above their normal duties. This expectation of a vail soon spread to workers at inns and hotels. Many guests complained about tipping, but the practice continued.

In the 1800s, the custom of tipping became common at pubs and restaurants throughout Europe. The word tip originated from an Englishman named Samuel Johnson as an acronym for the phrase "To Insure Promptitude," which he saw printed on a bowl meant for spare change at a coffee shop. Customers who put change in the bowl received better service from employees.

While tipping was common in many parts of Europe by this time, it was not a custom practiced in the United States until the nineteenth century. More Americans began to travel after the American Civil War (1861–65). Some wealthy Americans who visited Europe witnessed the custom of tipping and brought it back to America. These aristocrats thought that this new custom would show off their wealth and sophistication back home, but it was met with disgust. Many people called tipping anti-American because it favored the wealthy and encouraged classism, racism, and sexism. Some individuals thought tipping exemplified the European aristocratic society, which the American colonies sought to break away from during the American Revolution (1765–83).

This disdain grew, and an anti-tipping movement established itself in the early twentieth century in the United States. The Anti-Tipping Society of America formed in 1904 in Georgia, and more than one hundred thousand people joined the group and vowed not to tip. Laws followed. In 1909, the state of Washington became the first to pass anti-tipping legislation. Five states followed, but by the mid-1920s, all of these laws had been repealed.

The federal government tackled the issue of tipping in the 1960s, when Congress passed legislation that allowed tipped workers to legally receive a lower minimum wage than other workers. This meant that workers in the service industry, such as restaurant servers and hotel housekeepers, could be paid a subminimum wage ($2.13 as of 2025) because their tips were expected to make up the rest of their wages. If these tips did not make up the federal minimum wage ($7.25 by 2025), then the employer would be responsible for paying the workers the difference, known as a tip credit. Not all employers followed this law, however.

Abroad, tipping is not the same as in the United States. In other countries, people do not tip as much as they do in America, and many establishments do not accept or require tips. Some countries even find tipping culturally offensive. While patrons are generally expected to tip service workers in the United States, this is not mandatory. In the twenty-first century, the restaurant service industry tipping average was typically 15 to 20 percent of the total bill; however, this amount is subjective, and the amount to tip varies per industry.

Topic Today

Concerns over tipping in the United States continued into the twenty-first century. Service workers—especially those in the restaurant industry—remained some of the lowest-paid workers in the United States. Indeed, restaurant workers were more than twice as likely to live in poverty in the early 2020s. Women and people of color were disproportionately affected, as they made up larger proportions of the tipped workforce.

Some restaurants began to address the issue of tipping in the mid-2010s. Restaurateur Danny Meyer, who founded the eatery Shake Shack, decided in 2015 that he would eliminate tipping at his restaurants and instead pay his employees higher wages. To accomplish this, he raised menu prices. Other restaurants followed suit and banned tipping, but many were forced to pass the cost of paying higher wages onto the customers in the form of increased food prices and service charges.

While some customers welcomed this change, others were unsure if it was a wise move. Some could not comprehend not leaving tips for servers who they felt went above and beyond to take care of them. Some patrons even tried to slip servers tips secretly. Others worried that service would become poor as servers did not have to work as hard for their tips anymore. Some people disliked having to pay higher prices for food and service charges. Employees were also mixed on what they thought of the new policies. Some complained that they made more money with tips. Others were happy they were paid a steady wage. In the years that followed, some of these restaurants decided to reverse their no-tipping policies and go back to the old way of allowing tips. Others continued to institute no-tipping policies.

After the US Fair Labor Standards Act was amended by the Consolidated Appropriations Act (CAA) of 2018, the Department of Labor issued a final rule in 2020 to protect the tips of workers. The rule barred employers, managers, and supervisors from keeping workers' tips, clarified guidance on tip credits in cases where workers perform both tipped and untipped work, and allowed non-tip-credit employers to include back-of-house workers such as dishwashers and cooks in mandatory tip pools.

Even so, the debate over tipping continued into the 2020s. By the early part of the decade, several states and cities, including Florida, Chicago, and Washington, DC, had passed laws to phase out the subminimum wage for tipped workers. However, forty-three states still permitted subminimum wages, allowing employers to pay tipped workers as little as $2.13 per hour. Proponents of eliminating the subminimum wage, such as the One Fair Wage campaign, argued that tipped workers in states where such wages had been removed were less likely to live in poverty and faced less harassment in their jobs, among other benefits. On the other side, critics—including many restaurant owners and industry groups—contended that eliminating the subminimum wage would increase labor costs and force businesses to raise prices or reduce staff.



Bibliography

Elkins, Kathleen. "Danny Meyer's Anti-Tipping Policy Is Nothing New—6 States Once Banned the Practice." Business Insider, 22 Oct. 2015, www.businessinsider.com/history-of-tipping-2015-10. Accessed 12 May 2017.

Ferdman, Roberto A. "I Dare You to Read This and Still Feel Good about Tipping." Washington Post, 18 Feb. 2016, www.washingtonpost.com/news/wonk/wp/2016/02/18/i-dare-you-to-read-this-and-still-feel-ok-about-tipping-in-the-united-states/. Accessed 12 May 2017.

"How Tip Credit Helps Restaurant Employees, Operators, & Customers." Public Affairs Policy Brief Series, National Restaurant Association, Apr. 2024, estaurant.org/getmedia/38f3e0dc-3f22-4a0f-a825-d2454768e7bc/tip-credit.pdf. Accessed 26 Sept. 2024.

McConnell, Akila. "A Brief History of Tipping." About Travel, foodtravel.about.com/od/tippingguide/fl/A-Brief-History-of-Tipping.htm. Accessed 12 May 2017.

Murphy, Tim, et al. "Etiquette 101: Your Guide to Tipping around the World." Condé Nast Traveler, 26 Mar. 2015, www.cntraveler.com/stories/2008-11-11/etiquette-101-tipping-guide. Accessed 12 May 2017.

Simet, Lena, and Matt McConnell. "Ending US Subminimum Tipped Wages Can Reduce Poverty and Inequality." Human Rights Watch, 27 Oct. 2022, www.hrw.org/news/2022/10/27/ending-us-subminimum-tipped-wages-can-reduce-poverty-and-inequality. Accessed 11 Sept. 2025.

"A State-by-State Look at Wages and Tipping." Bar and Restaurant News, 6 June 2024, www.barandrestaurant.com/operations/state-state-look-wages-tipping. Accessed 11 Sept. 2025.

"Tip Regulations under the Fair Labor Standards Act (FLSA)." Wage and Hour Division, U.S. Department of Labor, www.dol.gov/agencies/whd/flsa/tips. Accessed 11 Sept. 2025.

Tuttle, Brad. "15 Things You Didn't Know about Tipping." Time, 19 Sept. 2014, time.com/money/3394185/tipping-myths-realities-history. Accessed 12 May 2017.

"U.S. Department of Labor Issues Final Rule to Amend Tipped Employee Regulations." 20-2268-NAT, Wage and Hour Division, U.S. Department of Labor, 22 Dec. 2020, www.dol.gov/newsroom/releases/whd/whd20201222-3. Accessed 26 Sept. 2024.

Wachteroct, Paul. "Why Tip?" New York Times Magazine, 9 Oct. 2008, www.nytimes.com/2008/10/12/magazine/12tipping-t.html. Accessed 12 May 2017.

Wee, Heesun. "More Restaurants Opting for No-Tip Policies: Survey." CNBC, 2 June 2016, www.cnbc.com/2016/06/02/more-restaurants-opting-for-no-tip-policies-survey.html. Accessed 12 May 2017.

Full Article

Tipping is the act of presenting a sum of money in addition to the base price for services. Gratuity is another word for "tip." Workers in the service industry, such as food servers, hair stylists, taxi drivers, hotel workers, and valets, receive tips for the services they provide. While tipping is not mandatory, tips are usually part of many workers' incomes. Tipping rules vary by industry and country. People generally tip based on the type of service they receive—more for excellent service, less for poor service. The custom of tipping dates back to Europe during the Middle Ages but did not reach the United States until the nineteenth century. It has a contentious history in the United States that sparked an anti-tipping movement. Beginning in the 2010s, some US employers in the restaurant service industry banned tipping and instead paid their employees higher wages (equal to or above the regular federal minimum wage of $7.25) than the federal minimum tipped wage of $2.13 per hour. The federal minimum tipped wage has not increased since it was established in 1966.

Brief History

Tipping began in Europe as a practice of the wealthy who gave an allowance to those socially inferior. During the Middle Ages, European masters began to tip their servants a small amount of money for their worthy service. By the sixteenth century, guests of wealthy Europeans were obligated to tip the servants who hosted them during their visits; this tip was called a vail and was in return for the servants having to perform extra work above their normal duties. This expectation of a vail soon spread to workers at inns and hotels. Many guests complained about tipping, but the practice continued.

In the 1800s, the custom of tipping became common at pubs and restaurants throughout Europe. The word tip originated from an Englishman named Samuel Johnson as an acronym for the phrase "To Insure Promptitude," which he saw printed on a bowl meant for spare change at a coffee shop. Customers who put change in the bowl received better service from employees.

While tipping was common in many parts of Europe by this time, it was not a custom practiced in the United States until the nineteenth century. More Americans began to travel after the American Civil War (1861–65). Some wealthy Americans who visited Europe witnessed the custom of tipping and brought it back to America. These aristocrats thought that this new custom would show off their wealth and sophistication back home, but it was met with disgust. Many people called tipping anti-American because it favored the wealthy and encouraged classism, racism, and sexism. Some individuals thought tipping exemplified the European aristocratic society, which the American colonies sought to break away from during the American Revolution (1765–83).

This disdain grew, and an anti-tipping movement established itself in the early twentieth century in the United States. The Anti-Tipping Society of America formed in 1904 in Georgia, and more than one hundred thousand people joined the group and vowed not to tip. Laws followed. In 1909, the state of Washington became the first to pass anti-tipping legislation. Five states followed, but by the mid-1920s, all of these laws had been repealed.

The federal government tackled the issue of tipping in the 1960s, when Congress passed legislation that allowed tipped workers to legally receive a lower minimum wage than other workers. This meant that workers in the service industry, such as restaurant servers and hotel housekeepers, could be paid a subminimum wage ($2.13 as of 2025) because their tips were expected to make up the rest of their wages. If these tips did not make up the federal minimum wage ($7.25 by 2025), then the employer would be responsible for paying the workers the difference, known as a tip credit. Not all employers followed this law, however.

Abroad, tipping is not the same as in the United States. In other countries, people do not tip as much as they do in America, and many establishments do not accept or require tips. Some countries even find tipping culturally offensive. While patrons are generally expected to tip service workers in the United States, this is not mandatory. In the twenty-first century, the restaurant service industry tipping average was typically 15 to 20 percent of the total bill; however, this amount is subjective, and the amount to tip varies per industry.

Topic Today

Concerns over tipping in the United States continued into the twenty-first century. Service workers—especially those in the restaurant industry—remained some of the lowest-paid workers in the United States. Indeed, restaurant workers were more than twice as likely to live in poverty in the early 2020s. Women and people of color were disproportionately affected, as they made up larger proportions of the tipped workforce.

Some restaurants began to address the issue of tipping in the mid-2010s. Restaurateur Danny Meyer, who founded the eatery Shake Shack, decided in 2015 that he would eliminate tipping at his restaurants and instead pay his employees higher wages. To accomplish this, he raised menu prices. Other restaurants followed suit and banned tipping, but many were forced to pass the cost of paying higher wages onto the customers in the form of increased food prices and service charges.

While some customers welcomed this change, others were unsure if it was a wise move. Some could not comprehend not leaving tips for servers who they felt went above and beyond to take care of them. Some patrons even tried to slip servers tips secretly. Others worried that service would become poor as servers did not have to work as hard for their tips anymore. Some people disliked having to pay higher prices for food and service charges. Employees were also mixed on what they thought of the new policies. Some complained that they made more money with tips. Others were happy they were paid a steady wage. In the years that followed, some of these restaurants decided to reverse their no-tipping policies and go back to the old way of allowing tips. Others continued to institute no-tipping policies.

After the US Fair Labor Standards Act was amended by the Consolidated Appropriations Act (CAA) of 2018, the Department of Labor issued a final rule in 2020 to protect the tips of workers. The rule barred employers, managers, and supervisors from keeping workers' tips, clarified guidance on tip credits in cases where workers perform both tipped and untipped work, and allowed non-tip-credit employers to include back-of-house workers such as dishwashers and cooks in mandatory tip pools.

Even so, the debate over tipping continued into the 2020s. By the early part of the decade, several states and cities, including Florida, Chicago, and Washington, DC, had passed laws to phase out the subminimum wage for tipped workers. However, forty-three states still permitted subminimum wages, allowing employers to pay tipped workers as little as $2.13 per hour. Proponents of eliminating the subminimum wage, such as the One Fair Wage campaign, argued that tipped workers in states where such wages had been removed were less likely to live in poverty and faced less harassment in their jobs, among other benefits. On the other side, critics—including many restaurant owners and industry groups—contended that eliminating the subminimum wage would increase labor costs and force businesses to raise prices or reduce staff.



Bibliography

Elkins, Kathleen. "Danny Meyer's Anti-Tipping Policy Is Nothing New—6 States Once Banned the Practice." Business Insider, 22 Oct. 2015, www.businessinsider.com/history-of-tipping-2015-10. Accessed 12 May 2017.

Ferdman, Roberto A. "I Dare You to Read This and Still Feel Good about Tipping." Washington Post, 18 Feb. 2016, www.washingtonpost.com/news/wonk/wp/2016/02/18/i-dare-you-to-read-this-and-still-feel-ok-about-tipping-in-the-united-states/. Accessed 12 May 2017.

"How Tip Credit Helps Restaurant Employees, Operators, & Customers." Public Affairs Policy Brief Series, National Restaurant Association, Apr. 2024, estaurant.org/getmedia/38f3e0dc-3f22-4a0f-a825-d2454768e7bc/tip-credit.pdf. Accessed 26 Sept. 2024.

McConnell, Akila. "A Brief History of Tipping." About Travel, foodtravel.about.com/od/tippingguide/fl/A-Brief-History-of-Tipping.htm. Accessed 12 May 2017.

Murphy, Tim, et al. "Etiquette 101: Your Guide to Tipping around the World." Condé Nast Traveler, 26 Mar. 2015, www.cntraveler.com/stories/2008-11-11/etiquette-101-tipping-guide. Accessed 12 May 2017.

Simet, Lena, and Matt McConnell. "Ending US Subminimum Tipped Wages Can Reduce Poverty and Inequality." Human Rights Watch, 27 Oct. 2022, www.hrw.org/news/2022/10/27/ending-us-subminimum-tipped-wages-can-reduce-poverty-and-inequality. Accessed 11 Sept. 2025.

"A State-by-State Look at Wages and Tipping." Bar and Restaurant News, 6 June 2024, www.barandrestaurant.com/operations/state-state-look-wages-tipping. Accessed 11 Sept. 2025.

"Tip Regulations under the Fair Labor Standards Act (FLSA)." Wage and Hour Division, U.S. Department of Labor, www.dol.gov/agencies/whd/flsa/tips. Accessed 11 Sept. 2025.

Tuttle, Brad. "15 Things You Didn't Know about Tipping." Time, 19 Sept. 2014, time.com/money/3394185/tipping-myths-realities-history. Accessed 12 May 2017.

"U.S. Department of Labor Issues Final Rule to Amend Tipped Employee Regulations." 20-2268-NAT, Wage and Hour Division, U.S. Department of Labor, 22 Dec. 2020, www.dol.gov/newsroom/releases/whd/whd20201222-3. Accessed 26 Sept. 2024.

Wachteroct, Paul. "Why Tip?" New York Times Magazine, 9 Oct. 2008, www.nytimes.com/2008/10/12/magazine/12tipping-t.html. Accessed 12 May 2017.

Wee, Heesun. "More Restaurants Opting for No-Tip Policies: Survey." CNBC, 2 June 2016, www.cnbc.com/2016/06/02/more-restaurants-opting-for-no-tip-policies-survey.html. Accessed 12 May 2017.

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