Will waiters' tips slip when owners' profits dip?
Chicago — This week at Booth 3105 of the National Restaurant Association convention in Chicago, restaurateurs are being polled on a momentous question: Should they ban tipping?
Changes in tax laws have made it more expensive and more difficult to report tip income. Instead of keeping the tip, restaurant owners in the United States would have the option of charging a mandatory, European-style service fee ranging from 15 percent to 20 percent of the bill.
``Americans are used to paying for labor charges,'' says Peter Berlinski, editor of Restaurant Business magazine. If they pay for labor when they have their car fixed or a party catered, he asks, why not in a restaurant?
Some US restaurateurs have already moved to a fixed service charge. ``The customers uniformly like it,'' says Barry Wine, owner of the Quilted Giraffe in New York City. He moved to the system three years ago to professionalize his staff and institute an incentive system of pay.
But many restaurant owners oppose any change.
``You're dealing with a public custom,'' says Mike Hurst, the new treasurer for the National Restaurant Association. Americans are used to using the tip to reward good service or punish bad service. ``You just don't take that right away from people.''
The new tax law requires employers to start paying Social Security taxes on the tips their servers receive. A small restaurant with $1 million in sales a year would probably pay an extra $9,000 in social security taxes, Mr. Berlinski estimates.
The straw poll Berlinski is taking will give some idea of how popular the service charge is becoming. But for now restaurants that use it are clearly in the minority: about 5,000 of the roughly 100,000 establishments where tipping would be expected, he says.
Mr. Hurst doubts the new service charge will ever catch on in the US. ``Look how quickly the public has adjusted to the metric system.''