EXPAT LIFE: Tipping in the USA has to be one of the most confusing things to deal with for the new inexperienced expat. There are no exact guidelines and it’s no exaggeration to say there is a huge amount of variety in local behaviours, traditions and practices.
And here lies the difficulty. As an expat you come to your new home, biassed by your own standards, experiences and expectations. You are not aware of the nuances of your new home country. While most of us, at least from Australia know that tipping in a restaurant is a nice thing to do, when it comes to other things like getting a haircut or ordering a pizza, giving a tip isn’t second nature.
In fact, given the pricing of some things like haircut and colouring in the US, you could be forgiven for thinking a tip would be a bit rich. So perhaps the thought will cross your mind as it has to me some times: is this really a necessity? Sure I will tip in restaurants but where does it stop? I could be tipping people several times a day! It goes against the grain for many of us who feel they have worked hard for their money.
But the fact remains that tipping is widespread in New Jersey and many other places in the US. And it doesn’t just involve restaurants, hairdressers and food delivery workers.
Why is tipping in the USA so prevalent?
Tipping it seems, really depends on tradition, what job people do and what their wage levels are like. What is different in the US, and drives the whole tipping approach, is that many people get paid a very low minimum wage ( $7.25, Federal rate). What’s worse, in a lot of States, many low-end jobs are legally paid below the minimum wage.
In New Jersey, for instance, waitresses get paid $2.13 per hour. Yep, that’s no typo…. They really get paid a few cents more than a $2 coin per hour. Unbelievable? Certainly. But they aren’t the only ones.
Any small business that makes below a total of $500,000 per annum is also allowed to ignore minimum wage requirements. So that means many workers in small shops etc., are likely to be paid a small amount per hour as well. Labor laws also legally allow for below minimum wages to be paid to students learning on-the-job or working in retail, service, agriculture, or higher education. Others who can earn less than minimum wage include those whose mental or physical disabilities reduce their earning or productive capacity.
Strippers, maids, landscapers, snow removal workers, street vendors, taxi drivers, garbage collectors, barbers and sometimes babysitters, also rate amongst those who are poorly paid.
To put this all into perspective, in Australia, our minimum wage is $15.59 per hour for anyone 20 years or older, although it is less for children under 18 years old ($7.55 for 16 year olds). The US minimum is far below what we expect adults to be paid in Australia, and there are also lots of legal loopholes that seem to allow below-minimum-wage payments.
While the US price of living is lower than Australia, it is not so low, that you could be expected to live on $2.13 per hour. Obviously, tips are needed to survive.
Do you have to tip?
In reality, no, you don’t have to. You won’t be arrested for not tipping in the USA but it is a matter of courtesy. And also of understanding what happens when you don’t tip.
Take the example of a restaurant meal. In most cases you only pay the full cost that you fairly owe when you add the cost of the meal to the service tip. So in fact, if you avoid the tip, you get the meal cheaper but your waitress/waiter is making up the difference for you.
How, you ask?
Well there’s the obvious point that the waiter or waitress gets a lower income because of no tips. With little fixed income (on a low hourly pay rate), reality is that customer tips are the waitresses/waiter’s main source of income. If like many other students, the server is working their way through college using this job to pay exorbitantly high educational fees, you can expect them to be at least a bit disappointed in you for not leaving something behind.
If you don’t tip, then not only are you docking the wages of the server but in many cases they have to pay tips to their non-server co-workers for their help in delivering the meal e.g. barmen, cooks etc. This may put the waitress out-of-pocket in some cases.
Yes, this means they can actually lose money if you don’t tip….
Looking at it from the server’s point of view, you can see why they need tips so much. And why they feel disgruntled when you don’t tip.
In the case of hairdressers, by not tipping you are cutting into their take home pay significantly. My own hairdresser doesn’t even get paid a wage. She gets part of a commission for every customer she handles and relies on tips to supplement this. When there are no customers, she gets no income. It doesn’t matter how long she stands around all day in the salon, no customers equals no pay.
So it is in her best interest to have customers returning, although she would definitely prefer the happy tipping customers to the complainers who want to short-change her.
How will I suffer if I don’t tip?
If you are a penny-pincher or just don’t believe in tipping on principle, you may find your experience in dining places extends beyond just dirty looks received for not tipping.
Some years ago, I had dinner with some well-off Australian pharmacists in a LA restaurant. At the end of the meal, they refused to tip because they believed the meal and service was just average to mediocre. In Australia at this time, a monetary tip was only left when the dinner was exceptional. So maybe their ignorant behaviour was mitigated a little by their lack of awareness.
Despite some heated exchanges with the owner though, these Australians left the restaurant without leaving a tip, making the night an unpleasant and uncomfortable experience through their own ignorance and stubbornness. And no doubt, the waitress serving us will have borne the out-of-pocket costs herself. Because restaurant owners don’t reimburse them out of their own pockets-that just isn’t the way things are done here.
Learn the ropes on when to tip
So if you want to avoid short-changing your new countrymen, you need to try and tip when it is appropriate. Although it is impossible to know straight off whom or how much to tip, be on the lookout for people handing over little envelopes or folded money to service providers. Try to learn the local traditions by reading up on authoritative tipping guidelines or talking to locals who will definitely share this type of info.
Whatever you do though, don’t just stick your head in the sand and pretend it’s not your problem. Life is hard for many people in the US, with restricted free healthcare and low unemployment benefits. Tip when you can afford it and be OK with yourself if you can’t. And at least if you choose not to on principle, be aware of what impact you are making on other people’s lives.
Have you had any embarrassing moments where you were supposed to tip but didn’t?