The tipping point: Is it time to give up on gratuities in favour of higher wages?

Halle Quinn makes $14 an hour — 30 cents over minimum wage — as a server at Gaia's Urban Eatery in Charlottetown. Her share of tips, divided equally between the servers and kitchen staff, might be $80 on "good day." 

She keeps the tip money in a jar at home, and dips into it when she needs to.

"As a server, I think we do rely on it a lot."

But with labour shortages in the hospitality industry, some restaurant owners are calling for an overhaul of how staff are paid, and a move away from traditional tipping models.

"It's not a fair system," said Chef Michael Smith, owner of the Inn at Bay Fortune.

"Everyone deserves to be fairly paid, transparently, not wondering and dancing this ridiculous thing that we only do in North America with the tip. Go to the rest of the world, there's no tip. It's fairly, transparently priced. So that is going to be part of the solution."

Many customers believe tipping is just part of the bill.

"If it was really terrible, we'd still tip," said Sandy Kerr, who was dining out in Charlottetown on Thursday.

"If it was extraordinary, we'd tip more."

Living wage

A living wage for someone living in Charlottetown is estimated at $19.30 an hour, according to a 2020 report by the Canadian Centre for Policy Alternatives. 

With the cost of living continuing to rise, customers like Guy Laliberte said it's more important than ever to tip servers.

"I always go to 20 or 25 per cent all the time now."

Smith, however, thinks that money would be better spent within the cost of the meal.

"Tipping does not correlate with service. It only ever correlates with sexism, with misogyny, with racism, never with service."

Tipping does not correlate with service. It only ever correlates with sexism, with misogyny, with racism, never with service.— Chef Michael Smith

That's partly why he has a no-tipping policy at his establishment. Instead, he charges more for food, and passes the extra money onto staff through higher wages and benefits.

The industry association, Restaurants Canada, said Smith's approach is becoming a bit more common across the country.

But it's still rare, said Richard Alexander, the association's vice-president for Atlantic Canada.

"In your traditional table service restaurants, it's hard to get people to change their behaviour. And customers are used to having the option to determine to value of the tip. So some other restauranteurs may not be as open to it."

Gaia's owner, for one, has no desire to get away from tipping.

Charbel Jreij said staff appreciate being rewarded for good service, and he worries higher menu prices would drive customers away.

"You're making the customer pay more money because you want to compensate your employees more. As a customer, you didn't give me a choice. We're not in Japan. I can't see that happening to be honest."

Quinn said she'd support a no-tipping policy — as long as she can keep putting the same amount of money in her jar.

"If I knew I was going to get paid just as much, and I had that comfort in knowing, I think I'd be OK with that."