The man was a regular. Once a week he would come into the bar where Peggy Olsen worked, order a drink, and leave her a hefty tip. Olsen had just moved into her own apartment in Boston, and tips like this helped her pay rent.   

When he made sexual comments, or repeatedly hit on her, she would let it go. She had worked in restaurants for a couple years, and knew it came with the territory. Besides, she thought, if you annoy a customer, they won’t tip as much.  

Olsen’s story illustrates a larger issue for women in the restaurant industry, where sexual harassment runs rampant and staff often feel pressured to tolerate it for fear of losing money. When tips are the majority of a server’s paycheck, customers hold a disproportionate amount of power over their wages. In December, Governor Andrew Cuomo proposed ending the lower wage for tipped workers in New York, citing sexual harassment as one of the reasons. But many servers are conflicted about what this change could mean, fearing customers may stop tipping if they know it is no longer necessary.

“It may make things more stable,” Olsen said, “But that’s not why I work in restaurants. I work in restaurants because I know I can make large amounts of money fast. You can’t do that in a minimum wage job.”  

Sexual harassment is twice as frequent among women making a tipped minimum wage than women making the standard minimum wage, according to a recent report by the Restaurant Opportunities Center United. The report surveyed hundreds of servers in restaurants across the country, asking them about their experiences while working. Over 50 percent of women surveyed said they at least somewhat agreed that “depending on tips” had led them to “accept inappropriate behaviors that made [them] nervous or uncomfortable.”

Minimum Wage vs. Tipped Wage 2018

As long as their tips meet the federal minimum wage of $7.25 an hour, legally employers can pay tipped workers as little as $2.13 an hour. Employers still have to pay taxes on a server’s tips — it still qualifies as income — but they can claim a “tip credit” so they pay less money.  Even in New York City, which has a relatively high tipped wage of $8 an hour, it still lags behind the $13 minimum wage. In other words, anywhere from 40 to 70 percent of a tipped worker’s income comes from the customer, putting pressure on servers to tolerate harassment for fear of losing money.

“Research shows that when a woman is paid a minimum wage at a hotel or a restaurant she no longer has to depend on the male customers to earn a living,” said Dr. Joseph La Lopa, professor at the Hospitality and Tourism Management school of Purdue University. “She can do her job and if she has problems with customers, she can tell them to knock it off. Or she can tell her manager, and her manager can tell them to knock it off.”

So far, seven states — including California and Minnesota– have broken with industry tradition and eliminated the tip credit, instating one standard minimum wage. For most states, having one flat wage is accompanied by lower levels of sexual harassment, according to the Restaurant Opportunities Center United.

But reactions to these changes have been mixed, provoking support and criticism from restaurant owners and their staff. For both, money is at risk, and many fear any changes to the law may lower their incomes.

Christina Dabney, 31, has worked as a server and bartender in New York City for almost 6 years. She has worked in dive bars, high-end restaurants and family grills, and she said each place was different. At some places, she found sexual harassment could be a “nightly” occurrence – not just from customers, but frequently from coworkers and management.

“Every single job I’ve had I’ve been hit on by my boss. Some of them have asked me sexual questions, like while I’m in the middle of working,” she said. “People make lewd jokes all the time, everybody sleeps with everybody. There’s just a level of professionalism that you have in offices that you don’t have when you’re working in the service industry, and you’re working at night, with alcohol
involved, and your shift goes until two am.”

But she is unsure whether instating a standard minimum wage will do much to fix the problem, which she sees as being a symptom of the “high stress environment” found in most restaurants. Besides, what bothered her more than sexual comments or behavior was the fact that some customers were simply mean.   

“Working in restaurants, you’re always going to see the worst of humanity,” she said. “You’re always going to be super stressed, you’re always going to work long, hard hours doing something you don’t care about.” What made it worthwhile to her, she said, were the tips. Without those, she doubts she would have lasted so long as a server.

Restaurant owners, however, may be the most vocal opponents of ending the tip credit. The biggest blow could come to small businesses that are just on the brink of making it. This is according to Andrew Rigie, the Executive Director of The New York City Hospitality Alliance, who explained that it could up their labor costs by more than 50 percent.

Still, Dabney hopes the change could relieve some of the pressure she feels from having an unreliable paycheck. As long as most customers continue to tip well, then the impact could be a positive one for her.

And while she acknowledges sexual harassment has been a problem in the restaurants she has worked at, she is not convinced that tipping is the culprit.

“I think that there’s a much more sinister, deeper problem here that isn’t tied to the restaurant industry,” she said. “And that has more to do with, you know, sexism in general.”

An earlier version of this story overstated the number of women who responded to the survey and to the reduction in sexual harassment for women in states who abolished the tipped wage.