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Should tips be tied to wages in the service industry?

Some restaurants have raised prices, raised wages and eliminated tipping

Sep 4, 2014

by Alix Kemp

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Those who serve alcohol make less per hour than those who don’t in Alberta. That has some suggesting their tips should be going up in percentage.

Alberta has joined the rest of the provinces in offering a minimum wage of more than $10. Well, as long as you’re not a bartender or server, that is. For those who serve liquor, ­Alberta’s minimum wage will now cap out at $9.20, a full dollar less than the minimum for everyone else. The two-tiered minimum wage was introduced in 2011, with the logic that the tips servers bring in will make up the difference in hourly compensation. Trouble is, tips are hardly guaranteed, and many servers are required to “tip out” part of the money they do rake in to kitchen staff – employees who don’t serve liquor and are thus entitled to the provincial minimum.

All this could be why many restaurants are now hinting that customers should be leaving bigger tips. That often rubs against time-worn beliefs about tipping, in which bad service gets no tip, good service gets between 10 to 15 per cent and perfect service gets more. Now, in Calgary, 20 per cent is often the default option on debit and credit card terminals. But elsewhere, some restaurant managers are beginning to question the wisdom of the tipping system altogether, which allows customers to determine how much a server should make, rather than his or her employer. One B.C. restaurant has decided to forgo tips and raise menu prices by 18 per cent, while paying servers at least $20 per hour. That trend, inspired by European restaurants and now taking hold in some American cities, has yet to reach Alberta.

Hear more about this topic in the Alberta Venture podcast, and weigh in using the hashtag #AVTalkingPoint

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