Tips as a share of restaurant worker income are declining, according to an ADP report surveying the payment of roughly 100,000 full-service workers in tipped jobs for more than a year.
Tips comprised 57.4% of the compensation of tipped restaurant workers in September, compared to 67% in August 2021. Base pay for tipped workers has increased since the COVID-19 pandemic, in part because of moves to eliminate the tip credit, according to ADP.
Base wages have grown in absolute terms by 66% for tipped workers, while tips have increased 23% since January 2020. Full-service restaurant workers earn $23.88 an hour plus tips as of September, up 28% from January 2020.
ADP’s report also found significant geographical disparities in compensation across 10 selected metro areas. Median wages for Chicago-area tipped workers grew by 49% over the past four years, for instance, while those of tipped workers in Minneapolis grew by 7%.