Author Topic: Re: Restaurants that include the tip in the bill. Ud 27, 58  (Read 15335 times)

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Twik

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Re: Restaurants that include the tip in the bill, UD 27
« Reply #45 on: April 22, 2013, 05:18:27 PM »
I agree that there is something "off" about the tipping system, particularly as the recommended percentage creeps up, and one starts to feel one is really subsidizing the restaurant itself.

On the other hand, waiting tables is something that can be done horribly, or brilliantly, and it also feels off that two servers on opposite ends of the scales would be paid the same. It's not like serving has a lot of opportunity for advancement, unfortunately, so you can't say, "Henry the Waiter is really good at his job, so he'll soon be promoted to SuperWaiter, and make much more money there."
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Re: Restaurants that include the tip in the bill, UD 27
« Reply #46 on: April 22, 2013, 05:20:34 PM »
Barb, where do you live?

Here in the US, waitstaff usually make about $2.30 an hour - way below minimum wage. They are expected to make it up in tips. And they are taxed on the tips they are assumed to make.

So, not tipping a server is stealing from them. They will pay income taxes on a tip whether or not they actually it.

Until we catch up with the rest of the civilized world, and restaurants pay servers what they are worth, it is up to us diners to make it up.

I'm not sure I understand that logic. US Federal law actually requires the restaurant to make up any difference between their base wage plus tips and standard minimum wage.

So say they worked 10 hours one week. With standard minimum wage of $7.25, their income would have been $72.50. They will be taxed on $72.50 unless they report a higher income based on additional tips.

Say they only made $10 in tips that week and with the base wage of $2.13 their income would have been $31.30.  Their employer is required by federal law to make up the difference between the $72.50 and the $31.30. 

That is why I do not believe you are "stealing" from them based on withholdings.

MrsJWine

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Re: Restaurants that include the tip in the bill, UD 27
« Reply #47 on: April 22, 2013, 05:23:33 PM »
I know that quality of tipping can vary widely from place to place, but in my own experience, working for tips is awesome. Some days are bad and discouraging. But overall, it evened out for me to be a pretty nice hourly income. Better than some jobs that require degrees. During the brief time that I worked at a restaurant that paid full wages (and people knew this), I made far less money. Waiting tables is really fun for some people, and some of us really like the tipping system. I know not everyone does, but it's not something that we universally want pity for. In the long run, if you're good at your job, don't work in a terrible area for tipping, and have a good attitude, it evens out to a very fair wage.


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Utah

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Re: Restaurants that include the tip in the bill, UD 27
« Reply #48 on: April 22, 2013, 10:16:25 PM »
In PA they do not pay minimum wage for waiters/waitresses for the most part (altho some of the more hoity toity restaurants do pay more) and yes, as a former waitress I hated having to pay taxes on something I did not get, but I do not consider it stealing if they are not tipped.  There are many reasons people use for not tipping, from bad service to cheap skate to rudeness to cluelessness.  But it was rare that I was not tipped (never a complaint, just some cheapskates including a certain well known forensic specialist) but, the tables that did tip more than made up for it 9 out of 10 times.  I will say though, the lunch business crowd vs the dinner/theater crowd were more than likely to over tip.  And the diner is being accused of stealing from the waitstaff for not tipping adequately to make up the taxes employee pays on the tabs is unfair as most people don't even realize the waitstaff has to pay taxes on tips whether they get them or not (people were shocked when I explained it).  It is not the diners responsibility to make sure the waitstaff is adequately paid..that would be their employer.

kareng57

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Re: Restaurants that include the tip in the bill, UD 27
« Reply #49 on: April 22, 2013, 11:05:58 PM »
I know that quality of tipping can vary widely from place to place, but in my own experience, working for tips is awesome. Some days are bad and discouraging. But overall, it evened out for me to be a pretty nice hourly income. Better than some jobs that require degrees. During the brief time that I worked at a restaurant that paid full wages (and people knew this), I made far less money. Waiting tables is really fun for some people, and some of us really like the tipping system. I know not everyone does, but it's not something that we universally want pity for. In the long run, if you're good at your job, don't work in a terrible area for tipping, and have a good attitude, it evens out to a very fair wage.


A bit of an aside - but this was kind of addressed on the CBC series Doc Zone a few weeks ago - the topic was university graduates who couldn't find jobs even years later.  They were profiling grads from UBC (other universities as well) who were still working at their university-jobs even in their late 20s.  Not age 25 or 26 - they were 28 or 29.  They'd worked at a high-end Asian restaurant near the university during their undergraduate days, and were continuing to work there but not by choice.  They'd all taken Liberal Arts degrees that just are not in high demand these days.

And they agreed that there's a Restaurant-Trap syndrome - they were all making very good incomes from tips, really far more than they would have if they'd found jobs that required the degree.  So it can seem easier to stay at the restaurant rather than pursuing other careers.

Of course this is not to denigrate wait-staff jobs at all.  Lots of people, like you, love it.  I would never consider it a low-skill job in the least - I think it requires a great deal of time-management as well as diplomacy.  (I'd have been a disaster at it :)

Twik

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Re: Restaurants that include the tip in the bill, UD 27
« Reply #50 on: April 23, 2013, 09:45:04 AM »
Well, there are two upsides for tipping - one, it does (when it works properly) give servers recompense according to their skill and hard work. It makes being a server at least partly an entrepreneurial position.

Second, of course, is by rewarding servers who make an effort, patrons' experiences are usually better. It's a general truism of working that if the reward is the same for putting out extra effort, and putting out the bare minimum to get by, many people will pick the second option.
My cousin's memoir of love and loneliness while raising a child with multiple disabilities will be out on Amazon soon! Know the Night, by Maria Mutch, has been called "full of hope, light, and companionship for surviving the small hours of the night."

Hmmmmm

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Re: Restaurants that include the tip in the bill, UD 27
« Reply #51 on: April 23, 2013, 10:45:28 AM »
I know that quality of tipping can vary widely from place to place, but in my own experience, working for tips is awesome. Some days are bad and discouraging. But overall, it evened out for me to be a pretty nice hourly income. Better than some jobs that require degrees. During the brief time that I worked at a restaurant that paid full wages (and people knew this), I made far less money. Waiting tables is really fun for some people, and some of us really like the tipping system. I know not everyone does, but it's not something that we universally want pity for. In the long run, if you're good at your job, don't work in a terrible area for tipping, and have a good attitude, it evens out to a very fair wage.

Thank you for saying this. I'm involved with a local group that has a ton of people from the restaurant industry. Every job has drawbacks. But it seems that many in this service industry are probigating this idea that it is the abosulte hardest job in the world to do and that if your not leaving them a 25% tip your stealing money out of their pocket. I used to have sympathy but now I just don't want to hear it anymore.

CakeBeret

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Re: Re: Restaurants that include the tip in the bill, UD 27
« Reply #52 on: April 23, 2013, 11:01:00 AM »
Barb, where do you live?

Here in the US, waitstaff usually make about $2.30 an hour - way below minimum wage. They are expected to make it up in tips. And they are taxed on the tips they are assumed to make.

So, not tipping a server is stealing from them. They will pay income taxes on a tip whether or not they actually it.

Until we catch up with the rest of the civilized world, and restaurants pay servers what they are worth, it is up to us diners to make it up.

I'm not sure I understand that logic. US Federal law actually requires the restaurant to make up any difference between their base wage plus tips and standard minimum wage.

So say they worked 10 hours one week. With standard minimum wage of $7.25, their income would have been $72.50. They will be taxed on $72.50 unless they report a higher income based on additional tips.

Say they only made $10 in tips that week and with the base wage of $2.13 their income would have been $31.30.  Their employer is required by federal law to make up the difference between the $72.50 and the $31.30. 

That is why I do not believe you are "stealing" from them based on withholdings.

This is the way I understand it too. Can any servers/former confirm that this works in practice and not just in theory?
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Twik

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Re: Restaurants that include the tip in the bill, UD 27
« Reply #53 on: April 23, 2013, 11:06:40 AM »
I remember once at a party of recent college grads meeting one young man who had never gone to college (but had plenty of brains). He was rather smug as he told us how much he made as a waiter at an upscale restaurant, and it was definitely much more than any of the rest of us were making, or would make in the immediate future.
My cousin's memoir of love and loneliness while raising a child with multiple disabilities will be out on Amazon soon! Know the Night, by Maria Mutch, has been called "full of hope, light, and companionship for surviving the small hours of the night."

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Re: Restaurants that include the tip in the bill, UD 27
« Reply #54 on: April 23, 2013, 11:55:18 AM »
Barb, where do you live?

Here in the US, waitstaff usually make about $2.30 an hour - way below minimum wage. They are expected to make it up in tips. And they are taxed on the tips they are assumed to make.

So, not tipping a server is stealing from them. They will pay income taxes on a tip whether or not they actually it.

Until we catch up with the rest of the civilized world, and restaurants pay servers what they are worth, it is up to us diners to make it up.

I'm not sure I understand that logic. US Federal law actually requires the restaurant to make up any difference between their base wage plus tips and standard minimum wage.

So say they worked 10 hours one week. With standard minimum wage of $7.25, their income would have been $72.50. They will be taxed on $72.50 unless they report a higher income based on additional tips.

Say they only made $10 in tips that week and with the base wage of $2.13 their income would have been $31.30.  Their employer is required by federal law to make up the difference between the $72.50 and the $31.30. 

That is why I do not believe you are "stealing" from them based on withholdings.

A lot of restaurant managers break federal law everyday. I can say this does not happen the majority of the time. The servers I use to work with never got paid up to minimum wage to make up the difference. Most employers will accuse the waitstaff of pocketing cash tips. Unfortunately to report this to the employment commission is the kiss of death for a server. Not only will they be fired, word gets around to the other managers. I'm in NC which is an at will employment state. You can be fired for any reason (except race, gender, religion, etc.  )

Venus193

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Re: Restaurants that include the tip in the bill, UD 27
« Reply #55 on: April 23, 2013, 12:28:18 PM »
Quote
A lot of restaurant managers break federal law everyday. I can say this does not happen the majority of the time. The servers I use to work with never got paid up to minimum wage to make up the difference. Most employers will accuse the waitstaff of pocketing cash tips. Unfortunately to report this to the employment commission is the kiss of death for a server. Not only will they be fired, word gets around to the other managers. I'm in NC which is an at will employment state. You can be fired for any reason (except race, gender, religion, etc.  )

What else are they supposed to do with them?

I don't happen to think that mass collection of tips for redistribution is fair unless you are served by five different people during your visit.  Even then I don't think this is right because it penalizes the really good employees to the benefit of the marginal and the bad.

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Re: Restaurants that include the tip in the bill, UD 27
« Reply #56 on: April 23, 2013, 12:29:27 PM »
Quote
A lot of restaurant managers break federal law everyday. I can say this does not happen the majority of the time. The servers I use to work with never got paid up to minimum wage to make up the difference. Most employers will accuse the waitstaff of pocketing cash tips. Unfortunately to report this to the employment commission is the kiss of death for a server. Not only will they be fired, word gets around to the other managers. I'm in NC which is an at will employment state. You can be fired for any reason (except race, gender, religion, etc.  )

What else are they supposed to do with them?

I don't happen to think that mass collection of tips for redistribution is fair unless you are served by five different people during your visit.  Even then I don't think this is right because it penalizes the really good employees to the benefit of the marginal and the bad.

As opposed to reporting them as taxable income, or as opposed to pooling them, tipping out the bussers, etc.
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Re: Re: Restaurants that include the tip in the bill, UD 27
« Reply #57 on: April 23, 2013, 12:33:24 PM »
There's more to it than just that.  The IRS will also audit servers.  They have some sort of algorithm to determine what their income should have been based on a percentage of sales.  The algorithm does take into account people who under-tip or don't tip at all.  Last time I checked, that percentage was around 8%.  If a server isn't reporting what the IRS thinks they should, even if they're reporting honestly, then they can be forced to pay taxes and penalties based on what the IRS *thinks* they should have made, not what they actually made.  I personally know a server in a buffet restaurant that got nailed by this typed of audit.
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Re: Restaurants that include the tip in the bill, UD 27
« Reply #58 on: April 23, 2013, 05:49:36 PM »
OP here with a small update.

I just received a letter from the credit card company. They state:

-We have issued credit to your account for the disputed charge.
-Although we consider your dispute resolved, the merchant has an opportunity to review any information and provide additional documentation to support why they feel the transaction is valid.
-In the event we receive additional information from the merchant, we will forward any relevant documentation, and let you know if additional information is needed to support your dispute.
-We recommend that you retain copies of all documentation regarding your dispute.


Hopefully, I will not come back with another update saying that the restaurant is fighting the charge. Luckily, it's about $7 so it won't break my budget, but I don't plan to go back there.

kareng57

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Re: Re: Restaurants that include the tip in the bill, UD 27
« Reply #59 on: April 23, 2013, 08:53:55 PM »
There's more to it than just that.  The IRS will also audit servers.  They have some sort of algorithm to determine what their income should have been based on a percentage of sales.  The algorithm does take into account people who under-tip or don't tip at all.  Last time I checked, that percentage was around 8%.  If a server isn't reporting what the IRS thinks they should, even if they're reporting honestly, then they can be forced to pay taxes and penalties based on what the IRS *thinks* they should have made, not what they actually made.  I personally know a server in a buffet restaurant that got nailed by this typed of audit.


I wonder whether the IRS would even know whether the server was employed at a buffet restaurant as opposed to a regular restaurant.  Most patrons tip less at buffets, and it would seem to be grossly unfair that the staff could be assumed to be under-reporting