The shifting world of tipping

Attempting to reset a flawed system


When restaurant doors closed due to COVID in 2020, thousands of workers would never return to the industry. While reasons varied, many cited low wages and a lack of respect — both of which are wrapped up in America’s often dysfunctional relationship to tipping. 

“We’re the only industry that pays people less than minimum wage and relies on the customer to decide what staff is taking home for the day, and I take a little issue with that,” says Lisa Balcom, pastry chef and co-owner of Farow (7916 Niwot Road, Niwot) along with husband and executive chef Patrick Balcom. She calls America’s current tipping system, where tipped employees are paid a lower minimum wage and tips become income, demeaning and antiquated.

“I find it to be an area of reform in this industry that probably should have been considered long before right now,” she says, noting that the COVID pandemic offered a chance for restaurants to reflect on the practice and perhaps reset. “Once we were able to reopen, it was like wiping the slate clean, and it gave many people the opportunity to make changes they wanted to make but were perhaps afraid to beforehand.”

“It was an opportunity to start over and rethink,” agrees Mark Heinritz, one of three owners of The Sink (1165 13th St., Boulder). In the traditional model, servers alone receive the tips from their individual tables, a method Heinritz calls a “consignment approach.” After the pandemic, however, The Sink switched to a system of pooled tips. 

“We chose to do that because it equalizes the pay rate between different positions,” he says, explaining that all hourly employees from the front- and back-of- house are included in the pool. “It’s still merit-based. Employees have different rankings within the tip pool. The more time you put in and the attendant skills that you have, the higher level you can earn in the tip pool.”

After all, the back-of-the-house staff — more often people of color, according to data from the Census Bureau — contribute just as much toward a pleasant hospitality experience as those at the front and therefore deserve a portion of credit and tips. At The Sink, the new policy has helped with staff retention, which is vital through ongoing labor shortages. 

“It’s still an imperfect approach,” says Heinritz. 

In addition to tip pooling, Farow has gone a step further by also adding a 22% gratuity to every check. Balcom agrees the changes have helped with retention. Given the rising cost of living in Boulder County, a more reliable wage just makes sense. 

“Overall, people have felt happy about it,” she says. “It takes away a lot of the dynamics of the restaurant industry that cause drama: the tension between front- and back-of-house, the competition of who has the best section, who’s getting what, getting argumentative with the hostess. It’s helped foster a sense of teamwork and family rather than competition.”

Most vital to the tipping change has been clarity for the customer, informing them about tipping policies from the menu to the credit-card slip and everywhere in between. 

“Most people want to do what’s fair,” says Balcom. “You don’t want to do math after you’ve had a couple drinks and dinner. This way, you sign your check and go home, just like paying for groceries, with no extra thought process involved.”

And maybe with fewer underlying power struggles. The history of tipping in the United States is rooted in classism and racism, serving to draw a line between master and servant, and wages in general can be controversial. 

“It’s a sensitive subject,” says Heinritz. Even so, he encourages folks to politely ask about a restaurant’s tipping policies, which shouldn’t be a close-kept secret, and to be open to changes as the industry continues to evolve. 

“Recognize that you’re paying the same amount of money no matter how the bill comes,” he says. “If you were going to tip 20% and they’ve added that automatically, it’s still 20%. It’s the same math in the end. It’s just how you feel about it.”

What restaurant workers have been feeling for years is a lack of respect, well illustrated in how many of the essential workers fled the industry in the COVID era.

“There was a discussion that needed to be had about the treatment of the workforce in this industry,” says Balcom. “You’re expected to work long hours, holidays, weekends, missing out on what would be considered a normal life.”

She only predicts more change, adding, “Tipping is a crazy, backward thing that was never set up to be sustainable in the first place.” 

A short history of tipping

While it’s a cute story, the word tip is not an acronym for “to insure performance.” The history of tipping is rooted in feudalism, a tip originally meaning a small amount of money given from a master to a servant, usually pocket change. Always moving from social better to social inferior, the classism of the feudal period is baked into the concept. 

As Americans traveled to Europe and back over the 19th century, they brought the concept of tips back to the United States. The concept didn’t take root until after the Civil War when industries, especially in the hospitality sector, used tips as a way of not paying Black folks a wage, meaning racism is built in, too. 

President Franklin D. Roosevelt established the first minimum wage as part of the New Deal in 1938. However, restaurant workers were specifically excluded and were paid solely in tips until 1966, when the federal government set a tipped minimum wage. The idea was that employers would make up the difference between tipped and standard minimum wage when tips were low. 

Since 1996, the federal tipped minimum wage has sat at $2.13/hour, though the current non-tipped minimum wage is $7.25/hour. Colorado sets higher standards for both with a tipped minimum wage of $10.63/hour and standard at $13.65/hour. Jobs that rely heaviest on tips include servers, bartenders, delivery drivers, and taxi or freelance drivers. 


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