Wow. Ontario just announced it will eliminate the sub-minimum wage.
Yes, the plan for January 1, 2022, also involves raising the minimum wage to $15.
But getting rid of the “liquor servers” minimum wage, a.k.a the tipped wage, a.k.a the sub-minimum wage, though buried in most news coverage, seems like an even more significant move — because the sub-minimum wage is one of the support beams keeping in place the corrupt system of tipping.
Over the years, I’ve discussed the abolition of tipping with restaurateurs, chefs, cooks, and servers who were either considering or actually doing it. If you grew up here, tipping in restaurants, paying 15 or 20 per cent on top of the bill, is a way of life. If you’re from one of the countries without this practice — Japan, China, South Korea, Georgia, Iceland, Peru, Spain, Thailand, Australia, Finland, Norway, Denmark, Belgium, the Netherlands, Switzerland, Croatia, Iran, or Brazil — let me explain.
Following the American Civil War, formerly enslaved people had few employment opportunities. Service work, in restaurants and on trains, for example, came with the caveat that many employers would not pay workers but instead allow them to receive compensation.
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in the form of voluntary monetary gifts from customers; it was therefore positioned as an act of generosity rather than an employer obligation. Over time, this custom was fortified by laws, such as the 1938 Fair Labor Standards Act in the United States (and the tip credit, introduced in a 1996 amendment) and the various lower legal wages in Canada, such as the “liquor servers wage.” Perpetuating the legacy of slavery, these sub-minimum wages for tipped workers have suppressed wages for generations.
While Canadians are accustomed to the idea that tipping is voluntary, or a necessary mechanism for motivating a specific workforce, that is nonsense. Tipping hides the true price of a meal (the $12 lunch looks more affordable when we pretend it’s $10, plus 20 per cent we ignore until the bill comes). It removes control of restaurant revenue from small-business owners. And it enables all manner of endemic problems — sexual harassment, racial bias, income disparity.
If tipping makes sense, how much do you tip your dentist or electrician? Or do they charge you the full cost for a professional service, meaning the price on the bill is the price you pay?
All these topics swirl around the circular conversations about eliminating tipping. We go round and round when any restaurateur takes the plunge. The big questions are usually: How will customers react to the sticker shock when prices are increased to absorb the cost of higher wages (and the employer having to pay taxes on those wages) even if the final price paid is the same as before? And how will restaurateurs retain experienced servers who, unlike most of the kitchen staff, are motivated more by money than by love of the work?
These conversations always circle back to a common point. Getting rid of tipping will always be a matter of swimming upstream as long as it is the industry norm. And it will always be the industry norm as long as it is propped up by government assistance in the form of the sub-minimum wage. It is too hard to get rid of tipping in any one restaurant when our governments make it legal to pay tipped servers people less than the legal minimum. And who could conceive of that changing?
And then Ontario just did it.
“For us, because we eliminated tips over a year ago, our business is not affected by this,” says Carl Heinrich, co-owner of Toronto’s Richmond Station. “But, certainly, for restaurants across the board, this is an enormous change.”
With the many stops and starts for restaurants during the pandemic, and the various government supports in place, it’s too soon for Richmond Station to assess the impact of eliminating tipping on revenue or employee retention. But Heinrich is unequivocally happy with the shift away from a system he sees as incompatible with running a proper business.
“When I ask front-of-house service professionals how much money they want to make, in an interview, it’s almost a rhetorical question,” he says. “They have no idea how to answer, because they assume they’re going to make a sub-minimum wage and have to sing for their supper.” A server is expected to perform for clientele; they, not the employer, decide how to compensate the server. “Which is crazy,” Heinrich says. “In any other industry, you go into an interview saying, ‘I am worth this much to you. You should pay me in order for me to do this job that you’ve advertised.’ It shouldn’t be the client that is deciding how much our staff is paid. It never should have been and never should be. It’s so archaic, that system. No client should decide how much my staff is worth to our business. How asinine is that? That’s crazy.”
Of course, moving the provincial minimum from $14.35 to $15 is insufficient. A livable wage, according to the Ontario Living Wage Network, ranges from $16.20 in Sault Ste. Marie to $22.08 in Toronto. Premier Doug Ford, the same person who scrapped a scheduled raise to $15 in 2019, now says, “For many people, take-home pay has not kept up with the cost of living” — as if $14 had been enough to live on two years ago. A 65-cent increase seems like more of an election-campaign stunt along the lines of Ford’s “buck a beer” promotion than a meaningful increase to keep pace with the cost of living.
However, the elimination of the $12.55 sub-minimum wage puts hospitality employers in a position to reconsider how they pay staff and how they charge customers. It puts those decisions back in their hands.
I don’t want to be naively optimistic. But I also don’t want to be so cynical that I can’t recognize a good thing when I see it. This is a brick removed from the wall of structural inequity in the dining industry.
“I was talking with a colleague a few weeks ago, who was opening a spa and had three food and beverage areas in the resort and wanted to go hospitality-included,” says Heinrich. “She knew it was morally the right thing to do but was getting a lot of pushback from the board because it’d be expensive. Well, she’s going to have a much easier time having that conversation now.”