What's cooking at the National Restaurant Association convention? The debate du jour is whether to tip or not to tip.
Some restaurateurs are calling for a switch to a flat service charge, as is common in Europe. But many find the idea unappetizing.A federal tax law that went into effect Jan. 1 requires restaurants to pay taxes on waiters' tips. And if waiters fudge on the amount of tips they get, the Internal Revenue Service can hold restaurants liable for taxes on the unreported gratuities.
Proponents of a service charge say that, among other things, it would make tax-related paperwork easier and would make cheating harder.
"Let's face it. There are hundreds of thousands of waiters earning $40,000 and declaring $10,000," said Susan Wine, who helps run the expensive Quilted Giraffe, which replaced tips with a service charge three years ago.
"The law never brought the owner in before," Mrs. Wine said Tuesday from New York. "It never made him a co-conspirator. It always said, `What he doesn't know won't hurt him.'
"That's changed, and now the big places will have to face up to millions of dollars in tax liability."
But if customers don't like a required service charge?
"I just say, `Then don't come to my restaurant,"' said Michael McCarty of Santa Monica, Calif., owner of an chain of restaurants in Colorado and California that tacks on a 15 percent charge.
McCarty took part in a lively discussion of tipping, held during the the 69th annual convention of the National Restaurant Association last week.
But Arnie Morton, owner of Arnie's, a popular dining spot for celebrities on Chicago's Gold Coast, said he once helped run a Playboy Club that had a service charge and "it was a huge mistake."
"You lose motivation, attention," Morton said. "I think the service is going to slip if a waiter knows he's got an automatic 15 percent tip."
On Chicago's South Side, two women in favor of leaving tips up to the customer helped form a group called Waitresses Against Involuntary Tipping, or WAIT.
Eileen Wheatley and Linda Siekman say owners of expensive restaurants don't understand the needs of workers at more modest eateries. And if the owners want to eliminate tips, they should provide other benefits, the women say.
Waiter Luis Cruz, filling a drink order at Palmer's Steak House in the downtown Loop, said he might come out ahead with a service charge.
"Most of our tips come on credit cards, so the restaurant knows what we're taking in anyway," said Cruz, 26. "But in a way, perhaps it's better. If a service charge is 15 percent, that's more than I get from some."
Jim Peterson, president of the restaurant association, says the issue is mostly a concern at expensive restaurants where a juicy steak, fine wine and rich dessert can add up to a hefty bill - and a handsome tip.
While his group has not taken a stance, Peterson acknowledges that many members are frustrated over the new federal law.
"It's burdensome," Peterson said. "Restaurateurs have been put in the position of being a tax collector, getting information from waiters and reporting it to the government.
"This issue has been on the top burner during our meeting here," he said. "What most restaurant owners want to be conscious of is what the customer finds acceptable. In the end, that would be the most important thing."
Joan Lang, executive editor of Restaurant Business, hopes to publish results of a straw poll of restaurateurs in July.
"It's pretty controversial," she said. "There are some people who are very opposed to it and some who think its time has come. The gut feeling is it's pretty evenly divided."