The following is cut-and-pasted from Torah.org
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QUESTION 46: TIPPING
At the end of the Passover vacation at the hotel, we were supposed to tip the waiters and busboys. The recommended amount was to pay the waiters $36 and the busboys $24 for each person at the table. The hotel doesn’t pay them anything, and these workers depended totally on tips for their pay. When I gave my tips, my waiter and busboy looked quite unhappy, and I asked why. They pointed out a few families that had paid very little. When I asked the head of one of these families, who had 11 adults at their table, he said they only paid a total of $75 to the busboy (the recommended fee was $264). He added, “I didn’t realize that tips were extra. I thought they were included in my bill. Besides, tips are always optional, that’s what the word ‘tip’ means.” When I suggested that he understood the arrangement incorrectly, he objected to my being involved at all. I said that there was a problem of chillul Hashem (desecration of G-d’s name), and that I had a requirement of tochacha (showing another person that they might be making a mistake). Did I have a requirement to tell them what I think?
RABBI BELSKY
I think that you should definitely tell them that they should tip. If they don’t want to give $264 and they want to round it out to $250 or $200 it’s one thing. But everyone knows that tips are not included, unless there’s a “gratuities included” sign. If it doesn’t say that, then tips are not included. And if it says, “optional tipping recommended”, then it means tips are not included. And if they were new to vacationing, and they didn’t know this, then it is high time they became educated and were told. There is a problem of chilul Hashem, and what you did was the right the thing to do.
There is a gemorah (section of the Talmud) about tipping in Mesechta Megillah (the book of the Talmud dealing with Purim) in a couple of places. It says that inn-keepers weren’t able to charge rent to an oleh regel (one who attends festivals in Jerusalem). Why? Because it is said that that all of Klal Yisroel owns the property in Jerusalem. Therefore, the inn-keepers couldn’t even charge rent. But it says that the proprietors should be tipped, and that they could take the tips even against the will of the tenants. And that sum could be quite a lot. The Talmud says that we can learn from that practice that it is the way of the world to leave a tip for a proprietor. The commentaries note that the Talmud says that it is the orach ara (accepted custom, literally ‘the way of the land’) to leave a tip. It’s derech erertz (the civil, proper thing to do. And if you don’t do it, you don’t have derech eretz, and you don’t follow the ways of the world.
Generally, a tip is voluntary. But the Talmud says that for those whose entire income will be coming from the tip – such as the inn-keepers in Jerusalem – the tip becomes mandatory. So you see that in such cases, giving a tip is an obligation. This is a Hallachah (Jewish law) that the Gemorah (Talmud) states clearly, not just a nice way to behave. When I said the fee could be rounded off, it’s simply because when there’s a larger group, very often the rate is cut a bit.
QUESTIONER
So to what extent should I urge them to tip?
RABBI BELSKY
Well, since it’s mandatory, and even in a case where it’s not mandatory, it’s certainly the way of the world and the proper thing to do. And there is the third problem, as you mentioned, that not giving a tip could be a chilul Hashem. Given the fact that all three could be violated here, I think you should definitely urge them to pay the tip. But on the other hand, don’t be mochiach (chastising) – don’t rebuke them too much, because you may end up having a personal problem with the people. They’ll wonder, “Who do you think you are?” Are you our mashgiach (supervisor)? :Perhaps the type of person who doesn’t tip would probably not spare you a generous counter-attack, telling you how he views it.
QUESTIONER
When I mentioned it to him, he told me not to get involved. So my real question is, should I give him tochacha (rebuke) again? The first time I mentioned it he just brushed me off, and it didn’t seem to get into his consciousness at all. I wondered whether the second attempt might work.
RABBI BELSKY
When it’s time to give tochacha a second time, you should say, “I understand. You’re right; it’s not my business. But I seem to remember hearing that giving tips is sometimes actually an obligation. In this case it is an obligation, because the person doesn’t make his living other than from tips. And since this may be so, maybe you should ask a question to your rov.”
There are a couple of ways to make tochacha more effective. One is to say, “I think I remember having heard –“, to create some kind of hesitancy, even if you’re absolutely certain. Mipnei darkei shalom (for the sake of having peace) – because you’re trying to make peace, it’s justified to twist the truth a little bit, and you could definitely say, “I think I remember – I’m not certain – I’m almost certain.” Secondly, a person who is being mochiach (chastising) somebody else should recommend that they ask a sheiloh (questions) because it’s definitely something that can’t be decided on one’s own.