A receipt showing a “living wage fee” at a restaurant has sparked heated debate online.
@ant.really.do.this asked on Threads, “WTF is a living wage fee? 🤔” and shared a photo of a receipt with a line item that reads, “Living Wage Fee (18.00%).”
At the bottom of the receipt was an explanation of the fee. It read, “Living Wage Fee of 18% Added to Each Dine-In Check. This Fee Goes Directly to Staff Payroll and Provides a Living Wage to Our Team. If You Choose to Tip, Tips Are Pooled Amongst the Entire Team. Thank You!”
The post quickly spread to the r/EndTipping subreddit, where people had a heated discussion over the existence of the fee.
Restaurant Lula & Sadie’s FAQ about their Living Wage Fee, for example, explained what this added fee does. It is how they opt to change the imbalance between tipped and non-tipped employees. They want “to bridge this gap to provide a more sustainable livelihood to our hardworking employees.” The way restaurants label these fees differs wildly, with some referring to them as an “administrative fee” or “service charge.”
According to EBSCO, the concept of the no-tip restaurant is becoming more and more common. Restaurants are trying to find a way to bridge the pay gap of their employees. “Instead of relying on tips for income, these establishments typically offer higher wages to their employees, funding this increase through either a set service charge or higher menu prices.”
The report adds that removing tips from the equation creates a more positive work environment. This is in part due to the subjective nature of tips and how customers decide to tip, and how much.
People in the r/EndTipping subreddit were largely opposed to the fee, with many calling it a hidden fee. Many people said that the restaurants should just raise their prices instead of adding a percentage fee to the receipts.
“If that wasn’t clearly advertised up front, it would be a hard no from me,” wrote u/Chicken_shish.
“That’s why it’s pointless to do sh*t like this and they should just increase the actual base prices of the items,” u/SwiftTayTay said. “Literally the only reason to do this is to tack on a hidden fee that takes people by surprise. Also, their employees probably still aren’t getting paid either way.”
u/couchtater12 had a take on how to handle the fee…which was to not pay it. “If I’m only finding out about this at the end of the meal (on the check slip), that’s a hard stop from me. I would pay my tab in cash in the amount of the check, less 18%. It is the employer’s responsibility to provide their employees with a living wage, period.”