AUBURN — Tipping is out of control in this country, if you believe a Pew Research Center Poll published last month, which reported that 72% of adults say tipping is expected in more places than it was five years ago.

Restaurants, bars, hair salons, ride-sharing and even self-service kiosks prompt you for a tip — many times before the service or product is even delivered.

Blame it on the COVID-19 pandemic, or employers who are increasingly reluctant to raise their prices in an inflation-driven economy. But economists point out that generally, it’s because employers are not required to pay tipped employees the minimum wage.

At the federal level, the required minimum wage for tipped workers is just $2.13 per hour. The minimum wage in Maine will rise to $14.15 per hour on Jan. 1, while the minimum wage for tipped workers will rise to $7.08 per hour. The poverty level equivalent in Maine is $11.07 per hour for a family of two adults and one child, with one adult working.

A FAIR WAGE WITH A CONSISTENT AND PREDICTABLE INCOME

At Side By Each Brewing Co. at 1110 Minot Ave., all employees are paid a fair wage and benefits so they don’t depend on tips for a livable income. It’s a no-tipping policy, and Side By Each is one of the few restaurants and bars in the state to have one.

Side By Each has adopted a business model that works well for them that mirrors what fast-casual restaurants like Panera bread do — customers come in, order drinks and food at the register, pick it up and take it to their own table and are asked to take their dishes to a central location when they are finished.

Owner Ben Low and General Manager Casey Peacock sat down with the Sun Journal to talk about their fair wage policy and why it works for the employees, the business and their customers.

“This policy was established before we opened, and Casey’s been here since we opened,” Low said to start the conversation. “The whole system just isn’t really equitable. Employees’ pay shouldn’t be determined on how generous a particular customer is feeling that day. And, I mean, we all know there’s a wide range in how people tip.”

For decades, the hospitality industry has debated and struggled with the question of a fair wage versus tipping added on to the subminimum wage. The tipping culture in hospitality has also been associated with racial and sexual discrimination. The percentages vary, but the National Restaurant Association reports that 54% of the restaurant and foodservice workforce is female. Other organizations put the figure higher.

At Side By Each, every employee — including part-time workers — are eligible for paid time off, or PTO. Full-time employees also are eligible for health, dental and vision insurance, 75% of which is paid by the business. Low said he is hoping to be able to add short-term and long-term disability insurance to the benefits package.

Employee wages start at $16 per hour, which Low said is like a training wage. The wage rate goes up to $22 per hour, depending on position and experience.

Low, who has worked in the hospitality industry for more than 15 years, said the decision to initiate a fair wage policy was both a moral and a practical one, and was accomplished without adding a service charge to pay the higher wages and benefits.

“We knew we wanted to be open in the mornings, ” he said, which is not usually the first choice of shift for servers because they make less in tips serving breakfast or lunch. Dinner is the prize when it comes to tips, where servers can make hundreds of dollars a shift in a busy restaurant or bar.

“This way there’s one system for everybody, no matter what shift you’re working, ” Low explained. “You’re getting paid when you see the schedule, you know roughly how much you’re getting paid. There’s no guesswork.”

During the pandemic, Low said they didn’t have any employees leave, unlike in other restaurants, but that their hours were cut back significantly. However, they were able to collect unemployment for the hours missed, and while that was less than their regular earnings, the calculation was higher because all their wages were reported, which is not always the case in the world of cash tips.

WHAT CUSTOMERS AND EMPLOYEES THINK OF THE NO TIP POLICY

Because tipping is so entrenched in this country, a fair wage policy can create confusion for some customers. “The reaction from customers is pretty positive,” Casey Peacock explained. “Some customers are thrown off by it, or they are kind of in shock. They still try to tip.”

When that happens, there is what Side By Each calls a karma box behind the bar, where any tips end up. Once a month, management collects the funds and donates them to a nonprofit organization — most of the time a local one.

“I can think of maybe one person who’s ever been, like, not happy about it and maybe didn’t come back because they felt like they should be able to determine how much they pay based on how good the service is,” Low said. “For us, good service is just a minimum expectation. It’s not something that the customer needs to decide how much they should pay for.”

Tipping in North America is the most extreme, pushing past 15%-20%. In Europe, labor laws are stronger, especially with the European Union requiring a fair wage that is not dependent on tipping and consequently tipping is in the 5%-10% range or is not expected at all. Tipping outside of hotels and tourists districts in Asia is not expected and in Japan, you might have your tip politely returned if you decide to leave one.

In most of Africa, South and Latin America, a tip of 5%-10% is the norm but is certainly not expected.

With inflation adding pressure to menu pricing, Low and Peacock say they’ve had numerous conversations about adding a service fee as many other restaurants have done but have so far been able to avoid it.

“We feel like our prices are competitive,” Low said, adding that customers don’t always do the math when they compare prices. “Sometimes there’s some sticker shock with people because our prices really are 15% to 20% lower than they look if you’re comparing apples to apples,” because at the other restaurants, you have to add in the tip amount to the cost of the meal and/or drinks.

Low said it’s a constant process of educating the customers, which they don’t mind.

Employees left hospitality jobs in droves during the pandemic, and it remains a challenge to find enough staff for most restaurants. Pre-pandemic, Peacock said some job applicants scratched their head when told about the fair wage policy at Side By Each, but not anymore.

“Since the pandemic, I think the industry culture has shifted so much and people think there’s a lot of abuse that people put up with in this industry and people didn’t want to continue working for tips,” she said.

Peacock and Low said they’ve had one or two prospective employees who did not take the job because of the fair wage policy at Side By Each, but say they’ve never had an employee leave because of it.

“We’ve never had an employee who actually has taken the job be unhappy with it after the fact — including people who’ve had a lot of experience in the industry,” Low continued. “Every single one of them has ended up liking it better.”

Low and Peacock say there is no animosity between the kitchen staff and the front of house staff that has plagued the industry in the past, with kitchen staff not traditionally receiving any share of the tips.

The business model adopted by Side By Each doesn’t work for every restaurant and very few have adopted a fair wage policy. But Low says it matches up with their core values to treat employees fairly and respectfully, which could be why they have little to no employee turnover.

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