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editorial | service not included

Tipping system exacerbates unfair pay at restaurants

THOMAS FUCHS FOR THE BOSTON GLOBE

Tipping is said to have started in the Roman Empire as a means to reward servants and slaves. Americans adopted the custom only after the Civil War, but it stuck: Diners doled out some $40 billion in gratuities in 2012, according to industry experts. Yet the entrenchment of tipping has given restaurant owners a pretext to avoid paying their workers a proper wage. The tip system should be uprooted — or at least returned to its roots as a purely voluntary reward for excellent service.

Other than restaurants, few other industries let bosses rely mainly on customers’ generosity to set employee wages. Owners are happy to save on labor costs. Back when tips still came mainly in cash (and therefore could conveniently be left off income tax forms), this arrangement probably made sense to workers, too.

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That’s changed in the era of credit card payments. Only the wait staff at the priciest establishments can count on big tips leading to livable incomes. Wage theft — the nonpayment of owed wages or tips — is now commonplace at restaurants. Overall, the vast majority of servers and other front-of-the-house employees have been left with little control over how much income they make each week.

A busy Friday evening shift can mean good money, only to be followed by a slow Sunday afternoon where tips total $20 for a whole shift. If a diner doesn’t like his meal, his dissatisfaction with the kitchen could reduce the take-home pay of his server, the busser who cleared his table, and even the host who seated him. Work performed outside regular shifts typically goes unpaid, and bad weather or illness may lead to no pay at all.

Rakel Papke earned good tips as a waitress at Braza Bar and Grill, a popular Everett restaurant. Yet in nine months of working there, she received only six paychecks — and, she says, those checks arrived only after she asked. “They basically only paid me to keep me quiet,” Papke adds. So she recently filed a formal complaint with Attorney General Martha Coakley’s office, asking her former employer for the more than $4,000 she is owed in back pay.

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Some of the volatility that Papke and others like her experience would be eased if restaurant-goers routinely left higher tips. But while most people are accustomed to adding a 15 to 20 percent gratuity regardless of the quality of service, others set their own tipping standards, which may include a host of factors beyond a server’s control. Still others — angry customers, foreigners who don’t understand the custom — leave nothing at all. American restaurants could emulate most of the rest of the developed world, where service charges are automatically tacked on to dinner tabs. Some eateries in New York and California have made headlines for simply including the cost of labor in their menu prices and banning tips altogether.

More realistic, however, would be systemic change through stronger wage laws and better enforcement of those regulations. The Massachusetts Legislature is currently debating whether to raise the minimum wage, and the state Senate last November voted to raise the minimum for tipped workers, pegging it to 50 percent of the minimum for other workers. Whether the House will follow suit is unclear. Such an oversight would be shocking. Four out of five states — Arizona, Colorado, North Dakota, and Florida — where the National Restaurant Association projects the fastest growth in the restaurant industry for 2014 have a tipped minimum wage of at least $4.86, or nearly twice Massachusetts’ current law.

Massachusetts is a laggard in protecting restaurant workers

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The Massachusetts Restaurant Association, the industry’s lobbying group, has devoted intense resources to keeping the tip wage unchanged. Its CEO, Bob Luz, notes that waiters and waitresses in the state already make some of the highest average wages in the country, significantly more than cooks and kitchen workers, and that raising the tipped minimum could increase menu prices for customers. “No victim here if the tipped minimum doesn’t go up,” Luz says. His argument, however, rests on potentially unreliable data that employers, rather than servers themselves, report to the US Department of Labor.

Even if Massachusetts diners are more generous with tips — as the Labor Department data imply — why not extend a greater level of wage security to all servers in the state? Advocates want the tipped wage to be at least 60 percent of the full minimum wage guaranteed to all other workers.

Even better, however, would be to pass a law that would prohibit a separate tipped minimum wage, as seven other states have done. Workers would be guaranteed $8, or whatever the current full minimum wage is. Then, any tips they received would be what most customers already see them as — bonuses.

The nation’s largest state, California, for decades has not allowed tipped workers’ base pay to fall below the regular minimum wage. From fusion bistros in Los Angeles to sushi bars in San Francisco where the fish is flown in daily, the industry is booming and expected to expand by 9.1 percent over the next decade. In fact, in California and the six other states without a separate tipped wage — Alaska, Nevada, Montana, Minnesota, Oregon, and Washington state — job growth in the industry is expected to exceed Massachusetts’ over the next 10 years, in some cases by more than double. The poverty rate for tipped workers in these states was 12.1 percent, compared with 16.1 percent in states with the lowest tipped minimum, according to a 2011 analysis by the Economic Policy Institute.

Massachusetts, which often prides itself on its progressive values, is a laggard in protecting restaurant workers. Its current tipped minimum wage is worth just one-third of the regular minimum wage, and is lower than the tipped wage in 27 other states, including all other New England states, according to the Massachusetts Budget and Policy Center.

Women, who make up about 73 percent of tipped workers, are disproportionately harmed. Waitresses in some gritty bars and grills say they feel compelled to flirt with customers and laugh at offensive jokes just to preserve their income. Even then, they earn an average of $0.50 less per hour than male tipped workers, government statistics show. Doing away with the tipped minimum and giving these women a steadier paycheck would be the quickest way to restore their dignity.

Under the current system, restaurants must pay wait staff $2.63 an hour. A server’s wages plus her tips for every two-week pay period must also average out to at least $8 an hour, the regular state minimum wage. If not, then her employer is legally required to make up the difference.

Reality is messier. The government agencies that enforce wage laws largely depend on violations being reported, and some restaurant owners have found they can underpay workers without consequence. Nationwide, an Aspen Institute study suggests that nearly 40 percent of restaurant workers earn at or below the federal minimum wage of $7.25, even with tips factored in.

A 2009 study of 4,400 workers in New York, Los Angeles, and Chicago found that more than one-quarter of tipped workers were not even paid the lower tipped minimum wage, and 12 percent had seen their tips stolen by an employer or supervisor, which is illegal. There’s no reason to believe Massachusetts is an exception. In 2012, Starbucks was ordered by a federal appeals court to pay Bay State baristas $14 million in tips that had been illegally meted out to managers.

Ending the tipped minimum wage would be the first step to preventing this kind of abuse. Frequenting and encouraging eateries that include a service charge in the price of a meal is another.

Until then, tip well.

Tomorrow: How higher wages will help workers, businesses, and taxpayers.

Correction: An earlier version of this editorial suggested the Massachusetts state Legislature had not considered raising the minimum wage for tipped workers. The state Senate voted to raise the wage in November, but the House has yet to follow suit.

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