Alternative Gratuity Models in the Craft Beverage Industry: How No Tipping Impacts a Craft Brewery

In the wake of growing minimum wages, increased input costs for breweries, tip fatigue, and falling demand, this paper reviews and examines the value of alternative gratuity policies to the craft beverage business. These policies apply to employees that are paid via a flat wage with the potential for other types of bonuses but no expectation of receiving gratuities directly from brewery customers. Businesses may collect a service fee that is distributed or simply pay a higher wage. In Colorado, a state that in 2026 requires employers to pay $15.16 per hour to non-tipped employees or $12.14 per hour to tipped employees with rates also changing per municipality, many craft breweries and similar establishments utilize this policy. In Denver, wage rates are as high as $19.29 per hour and $16.27 per hour, respectively. Establishments such as project collaborator 105W Brewing of Castle Rock and Colorado Springs and local gem Casa Bonita of South Park fame do not allow gratuities for their servers and bartenders but rather prefer to pay a higher hourly wage.

For small businesses focused on a dedicated service of beer rather than table service, this policy is not only more sustainable but also more predictable making the business easier to manage. Using wage and tax data from breweries in Colorado, this study analyzes the impact of alternative gratuity policies in craft beverage businesses on employee earnings, employee satisfaction, and employee turnover.

Collaborating on this project with Dr. Conor Norris of West Virginia University.

If you are a craft brewery that would like to provide data to the study either as a brewery that uses an alternative gratuity model or as a control group that does not, please reach out to tjo00011@mix.wvu.edu or the contact page!