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This article introduces the recent trend of how the pandemic has changed the wage system of the restaurant industry. Especially in terms of the labor wage, it is time to rethink to change its system. After the breakout, restaurant employees are considered essential workers which means putting themselves in a risky work environment toward the spread of the virus. Chipolte, Starbucks, and Shake-Shack already have started to pay extra for their front workers. Also, it is getting intensified about tip credit since it is difficult to get tips for workers due to 'to go only' policies and limited in-dining. Since not all states have simultaneous policies about tips those opinions are different; pro-tips owners think this makes it possible for workers more profits while others who are not favor of tip credit say that it might harm the wage equity of workers.

According to federal law in 2012, employers can take a credit of up to $5.13 for tips received by workers in satisfying the minimum wage requirement of $7.25. This study uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment and earnings in the U.S. restaurant industry. Using data from the Quarterly Census of Employment and Wages and the Current Population Survey, we find that a reduction in the tip credit increases weekly earnings but reduces employment in the full services restaurant industry and for tipped workers. The results are robust to controls for spatial heterogeneity in employment trends and are supported by a series of falsification tests.