Gratuity by Default: A Closer Look at Automatic Tipping in Newark

In New Jersey, restaurants can charge automatic gratuity on your bill. But here’s the deal— the inbuilt tip has to be clearly disclosed to the client prior to them being charged. This is a vague legal guideline. Does the patron need to be notified of the automatically included gratuity before receiving the bill, or does the bill itself simply need to disclose it? Unfortunately, businesses don’t seem to make the rules any clearer to us. When dining at restaurants that include automatic gratuity in their bills, we haven’t once been explicitly notified of this by our servers. In the end, it’s left up to the patron to read the bill closely enough to notice that the tip’s already been accounted for in the final price. 

To be clear, including tips automatically isn’t the problem, per se. It becomes a necessity in an economy that fundamentally undervalues service work. As of 2025, the minimum hourly wage in NJ is $15.49, except for tipped employees, who make $5.62. Given the discriminately low wages that tipped service workers are paid, it has fallen on the public to ensure that they are ethically compensated in the end. This displaced responsibility takes the form of the “tip credit.” As a society we have pinned ourselves into a corner because the governments we elect refuse to pay workers a living wage in a sector distinguished by the fact that it provides non-material products (i.e., not a physical commodity, like selling you a watch, but rather a service, like selling you an experience). The burden falls onto working families to take care of their fellow working people. This is, essentially, what the responsibility of tipping comes down to nowadays. But not everyone knows or sympathizes with that. In many other parts of the world—including countries where our communities originate from—it’s not at all expected to give an 18% to 20% tip, or even to tip at all. So the burden falls not only on working people, but also communities and generations for whom current US tipping standards haven’t previously been customary. This lack of understanding sets patrons at a disadvantage, stuck between a rock and a hard place in an economy where buying groceries, not to mention eating out, is becoming unfeasibly expensive.

All of these inequalities are socially, economically, and culturally enmeshed in the practice of tipping. Servers are paid lower wages here because they have the “opportunity” to receive tips, but then the public has to pick up the end of the bargain that businesses are, in other parts of the world, required to uphold. In Ontario, Canada, for instance, restaurants now have to pay servers the provincially mandated hourly minimum wage required across all formal sectors ($17.60). An 18-20% tip is customarily added on top of that in exchange for good service, but the worker will not be crippled if the customer chooses to withhold that. This is the beauty of such a system. By contrast, in NJ and most other US states, tips are how restaurants incentivize their staff to provide a good experience for patrons, essentially out of force. “Give it your all or else your pockets will suffer at the end of the night.” 

So, to add an automatic tip in the bill or not? If there is no other way that workers will receive fair pay, yes, we as their communities must ensure they do. Consumers will suffer the consequences of an under-regulated service sector, just as they do across all markets right now. All that we ask of our local restaurants is that this gratuity be transparently conveyed to us. Maybe the louder businesses are about the reality of this situation, the more the public will know, and the harder they’ll push to make sure our working communities receive a dignified wage.