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Dec. 3, 2022

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The past, present and future of tipping and tipped workers in Seattle

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SEATTLE — Did you know it was once a misdemeanor to leave a tip in Washington state?

Long before there was a tip line on your credit card receipt and the nagging internal debate between leaving 15% or 20%, there was a whole anti-tipping movement, and advocates in Washington ranted against what they called the moral failing of tipping.

In 1909, they managed to pass a law that made it illegal to tip. The law, which lasted until 1913, was mostly laughed off as tipping continued unabated.

The law may have died, but the controversy, the moral questioning and the legislation around tipping is still a noisy conversation today as U.S. society continues to debate the fundamentals of tipping: Who gets tipped and why? How much do you tip? Is tipping demeaning? How much should tipped workers get paid?

Today, Washington state and Seattle have some of the best laws in the U.S. when it comes to protecting tipped workers, but the practice of tipping has an ugly beginning and a rocky past. As service industries (where most tipping happens) continue to be shaken up by the pandemic, and as the emerging gig economy raises new questions, the future for tipped workers is ripe for change and some new experiments.

A legacy of slavery

It all begins with slavery, of course — slavery and the great American obsession with cheap and free labor.

Travelers brought tipping back to the U.S. from Europe in an attempt to show their sophistication. The practice was met largely with disdain and didn’t really catch on until George Pullman, the founder of the Pullman sleeping car, found a way to make his railroad sleeping car service more enticing to his customers by hiring personal attendants.

After the Civil War, Pullman hired exclusively Black men and women, most of whom were formerly enslaved people from the South. His problematic reasoning was that they were essentially more servile and suited to service work, but he also was eager to take advantage of their desperation for work and the racist attitudes toward Black Americans that would allow him to pay them minuscule wages.

To earn a living, these porters and maids relied on tips from customers, which often meant enduring disrespect and working more than 100 hours a week.

“The uncomfortable history is that [tipping] is rooted in race and gender. It’s essentially a legacy of slavery,” said Kim England, the Harry Bridges Endowed Chair in Labor Studies at the University of Washington.

“Freed former slaves found it really difficult to find work and this economic desperation meant that they were more easily exploited than other workers,” England said. “White [employers] could pay very very small amounts of a regular wage, even no wage, and say that Black folks needed to work for tips.”

England stressed the importance of remembering the Pullman maids along with the porters. The maids were responsible not only for cleaning the sleeping cars, but also for intimate domestic work such as doing customers’ hair, providing child care and care for older adults and nursing the sick.

“The Pullman maids, as is the case for women in so many other histories, too often get forgotten or even hidden from the story of the Pullman cars,” England said.

The exploitation of the Pullman porters and maids and other formerly enslaved workers essentially cemented the practice of tipping into U.S. culture, but the way that these attendants fought back against injustice also created a legacy of action by tipped workers.

Washington leading the way

Early solutions to tipping inequities included things like Washington’s 1909 anti-tipping law (which was primarily aimed at restaurant workers) — i.e., getting rid of tipping altogether. But after the Pullman attendants formed the International Brotherhood of Sleeping Car Porters and Maids in 1925 (importantly, the “maids” was dropped during negotiations in 1937, England said) and successfully bargained for better hours and wages, it kick-started a new approach for tipped workers.

Here in Seattle, tipped workers, including domestic workers, were heavily engaged in the General Strike of 1919 that saw some 60,000 workers strike in the name of labor rights. The waiters and waitresses unions further supported the movement by serving food to the striking workers.

In 1938, the Fair Labor Standards Act was established, requiring all employers to pay their employees a minimum wage, but tipped workers were excluded from this. In 1966, an amendment to the act finally included tipped workers, but at a wage much lower than the minimum for other workers.

In 43 U.S. states, tipped workers, particularly restaurant workers, continue to receive a wage that is significantly less than the federal minimum for other workers and are expected to make up the rest of their earnings with tips.

But decades of action by tipped workers and their supporters have created a new way of thinking about tips in places like Washington.

“The core principle [is] that tips should be on top of your base wage,” said Sage Wilson, campaigns director for Working Washington, a local workers’ advocacy organization. Anything less, he said, “is unstable. It’s racist. It’s sexist. It’s an open door to harassment for women working in these positions.”

Per England, women make up 70% of tipped workers, and Black, Indigenous and people of color are disproportionally represented among tipped workers. Many of these workers report being the targets of sexual and other harassment from customers who expect them to “earn” their tip.

That’s part of the reason why, in 1988, Washington state got rid of the subminimum wage and required laborers to be paid the same minimum wage, whether they receive tips or not, Wilson said. Seattle followed suit in 2014. (State law allows cities to set higher minimum wages.)

Today in Seattle, all employees at large companies must make a minimum wage of at least $17.27, and small employers who don’t provide benefits must pay employees a minimum wage of $15.75, but Wilson says this is a temporary distinction that is expected to be phased out by 2025.

Still, harassment is a major issue in the industry. According to a December 2020 study on the experiences of service workers during COVID-19, 41% of service workers reported an increase in unwanted sexual comments from customers. Even more reported hostility and harassment surrounding mask enforcement and other COVID protocols.

Unlike the early advocates who argued against tipping altogether, most tipped workers today don’t really want to get rid of tipping. Instead, they want a regular minimum wage with tips being a bonus on top.

They want transparency about tips and wages from their employers, respect for their work, and, in the case of restaurant workers, equity between front-of-house and back-of-house workers.

They’re addressing these issues through experiments like tip pooling and dividing service charges — some businesses have even experimented with providing higher wages in lieu of asking customers to tip.

“People who get tips like getting those tips,” Wilson said. “Of course they do, and customers are really used to it.”

Anthony Anton, president and CEO of the Washington Hospitality Association, says today’s employers would love to get rid of tipping. This perspective is a flip from tipping’s origin as a way to get away with paying workers low wages.

One big reason? The burden of reporting tips to the IRS, Anton said.

“I’m in this no-win situation between the IRS and my employees,” Anton said. “That’s this constant burden. The bureaucracy to meet the IRS is time away from creating great food and great experiences and isn’t really why we got into the business.”

Another reason, Anton said, is the inequality between front-of-house workers (servers and hosts) and back-of-house workers (dishwashers and line cooks). Some restaurants today are working to address that issue in different ways, like a tip pool, which shares tips between front- and back-of-house staff.

A few years ago, Seattle employers led a movement to get rid of tipping and found that not only did their tipped employees not want that, but neither did customers. Employers had no choice but to get on board. Now that most tips are given via credit card, Anton said, it is easier to report tipped wages to the IRS and less of a headache for employers, too.

Still, experiments like tip pooling are being tested to address issues of inequity. And there are new issues arising, too.

With the proliferation of food-delivery and ride-booking apps and their pandemic surge, a new type of tipped worker rose in prominence: the gig worker. And with them came a hearkening back to tipping’s shameful origins.

The future

Ever wondered where your tip goes when you click the 20% box on your delivery app? For a time, that tip essentially went to the company, not the delivery worker. A delivery worker would be offered a certain amount for a delivery and they would receive only that amount regardless of how much the customer tipped.

“It was like turning back the clock to the Pullman porters,” said Wilson, the workers advocate. “Companies seemed to think, ‘We have this pool of workers who don’t have a ton of other options. They’re largely immigrants and people of color. Can we get away with paying them as little as possible?’ Time and time again, it’s always the same person, the same kind of work, that gets treated in this way.”

“The future is the past,” he said.

Once this was exposed, customers and workers alike pushed back. Currently, there are no companies known to have continued the practice, but gig workers still do not receive a minimum wage.

In Seattle, however, that will be changing.

In May, the Seattle City Council approved an ordinance that would ensure gig workers receive at least the city’s minimum wage, after accounting for expenses that other workers don’t have to worry about, like mileage and payroll taxes. Any tips will be added on top of the minimum wage. The ordinance goes into effect in 2024.

In the meantime, tipped workers in all industries continue to fight battles against harassment and inequity, legacies of tipping’s ugly origins, as the pandemic, labor shortages and other challenges continue to change the landscape of tipped work.

“The period of time of not doing the work, just because stuff was closed down [during the pandemic], led to a lot of reflection,” Wilson said. “It’s a pretty interesting phenomenon. There is a sense of, ‘I don’t want to keep taking this.’”

But the industry is in the favor of the workers and innovation is in the air.

“Various efforts by various people to find other ways to make it work, I think they’re interesting and worth watching,” Wilson said. “Because we have these strong standards as a base [in Washington] and because the labor market in the industry is really strong from the workers’ perspective, it’s interesting to see how it plays out.

“Workers in the industry right now in Seattle have the option of going somewhere else if something isn’t working for them, and that’s a good time to see experiments from our perspective.”

A consolidated timeline of tipping

1867 — The first Pullman porters began working in sleeping cars on trains, carrying luggage, cleaning and serving all of the needs of the sleeping car passengers. Exclusively Black men and women and primarily from the South, Pullman porters and maids worked long hours for minuscule wages and depended on tips to earn a living wage.

1909 — An anti-tipping law went into effect in Washington state, making Washington the first in the nation to outlaw the practice. The law made giving or receiving tips a misdemeanor, but the practice continued.

1911 — The “Waitresses Bill” was passed on March 4, 1911, establishing an eight-hour workday for women in the state of Washington. Waitresses, who often received tips for their work, were very engaged with the Seattle labor movement during the General Strike era.

1913 — The anti-tipping law was voted down in 1913 after having very little effect on the practice of tipping in Washington.

1917 — The Waitresses Union, Domestic Workers Local 15836, was granted a charter by the Seattle Central Labor Council.

1925 — The Brotherhood of Sleeping Car Porters and Maids union was formed and led by A. Phillip Randolph. They reached an agreement with the company that limited porters’ hours to 240 hours per month and increased their hourly wage. This was the first successful collective bargaining effort between a Black union and a major company.

1938 — The Fair Labor Standards Act of 1938 went into effect, requiring an employer to pay all employees the federal minimum wage. But the act excluded tipped employees.

1950s — Pizza delivery became popular, with most pizza restaurants offering takeout and delivery.

1995 — World Wide Waiter launched waiter.com where customers could order online to have food delivered to their homes in the San Francisco Bay Area.

2004 — Grubhub was founded in Chicago, effectively launching the era of food delivery apps. DoorDash and Uber Eats came later, in 2013 and 2014 respectively, these companies bringing with them a surging gig worker economy as they employed increasing numbers of food delivery drivers who are tipped workers.

2012 — Toast point-of-sale app was founded in Boston, creating a way for customers to start a tab at a restaurant or bar and link a credit card to their account, taking the cash factor out of, and automating, the tipping process.

2012 — The nationwide Fight for $15 began, when fast-food workers staged a walkout, demanding a $15 per hour minimum wage and union rights in New York City.

2018 — An amendment to the Fair Labor Standards Act was passed, allowing restaurants in a majority of states to split tips between front- and back-of-house workers.

2020 — The pandemic sent food delivery services to new heights, breathing new life into debates about benefits and wages for independent contractors and gig workers, how they should be paid and whether they should be considered employees.

2022 — A minimum wage law was passed requiring that tipped workers at small businesses in Seattle be paid a $15.75 minimum wage, regardless of how much they make in tips.

2022 — Seattle passed an ordinance ensuring gig workers receive minimum wage. The policy will go into effect in January 2024 and will include gig workers who deliver food, groceries and packages. It’s the first such policy in the U.S.

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