Ruling on Restaurant Service Charges

[mtdjed]

Article in Daily Sun today regarding Court Ruling in Miami that restaurant service charges are not Tips. Tips ruled to be added monies determined by customer.

My question is what are service charges? Article states that they are largely for providing larger wages for employees.

I have not seen restaurant bills in The Villages that have included Service charges as a line item. I don't like the concept. I have seen this overseas and in most countries I have seen them, tipping seems to be much less.

[Keefelane66]

Article in Daily Sun today regarding Court Ruling in Miami that restaurant service charges are not Tips. Tips ruled to be added monies determined by customer.

My question is what are service charges? Article states that they are largely for providing larger wages for employees.

I have not seen restaurant bills in The Villages that have included Service charges as a line item. I don't like the concept. I have seen this overseas and in most countries I have seen them, tipping seems to be much less.
If that comes to The Villages many will consider it the tip or adjust the tip accordingly. Many restaurants did this during the pandemic to cover additional costs for masks, silicon gloves. Can we be sure the adjustment is actually being given in increased wages?

[Skip]

Article in Daily Sun today regarding Court Ruling in Miami that restaurant service charges are not Tips. Tips ruled to be added monies determined by customer.

My question is what are service charges? Article states that they are largely for providing larger wages for employees.

I have not seen restaurant bills in The Villages that have included Service charges as a line item. I don't like the concept. I have seen this overseas and in most countries I have seen them, tipping seems to be much less.

Just another way of charging more, rather than re-printing the menus.

In Europe, "Servis Compris" means the tip is already added to the menu price. You can leave more if you'd like. There are pros and cons to both (Europe vs. US).

I would think that the servers in Miami would be totally against any "service charge" since the customer would think it's the tip. It really wouldn't last very long.

Skip

[Babubhat]

Las Vegas places charge a concession fee. Berkeley charges you a fee for employee benefits Just another way to extract money from you.

[I'm Popeye!]

Just another way of charging more, rather than re-printing the menus.


Your spot on! :thumbup:

[davem4616]

i always take off the tax amount before calculating the tip amount @20%

this will be something else that I'll take off before calculating the tip amount

[Stu from NYC]

Some restaurants when serving large parties will add service charge and that to me is the tip.

[BobbyP]

Can’t say much about Miami, but I was recently told by a waitress at Cody’s, that she made $6.85/hr.

If that’s the case, and considering that quite a bit of the the time that food and drinks at Codys is discounted, are we tipping enough?

If we tip for one drink when it’s two-for-one, is that enough?

[Sparky365]

They are adding gratuity to our total at the Poke in Brownwood. You won't notice it unless you ask for your receipt. I don't have a problem tipping as long as I know I am doing it.

[billlaur]

Thanks really good to know about a new start up. I wont be going there anytime soon...:boom:

[retiredguy123]

According to the Merriam-Webster dictionary, a gratuity, and/or tip is:

"Something given voluntarily or beyond obligation usually for some service".

Obviously, the court was correct that a mandatory restaurant service charge is not a tip.

[La lamy]

Can’t say much about Miami, but I was recently told by a waitress at Cody’s, that she made $6.85/hr.

If that’s the case, and considering that quite a bit of the the time that food and drinks at Codys is discounted, are we tipping enough?

If we tip for one drink when it’s two-for-one, is that enough?

Good point. I don't go out a lot, but when I do I'm very generous with tipping.

[Tuly914]

Just recently I ordered takeout from a restaurant not in TV. When I got home, I noticed on the receipt, I was charged a service fee. Being curious, I called the restaurant and questioned it. I was told they are now charging a service fee for using a credit card whether dining in or taking out. So an eggplant hero which was $10, cost me in the end $15 after the CC service fee and a jar tip. Always ask for a receipt, and question any extra charges they don't tell you about....

[dewilson58]

Just another way of charging more, rather than re-printing the menus.

Skip

It was the second post...........please read and relax.
:coolsmiley:

[MollyJo]

If that comes to The Villages many will consider it the tip or adjust the tip accordingly. Many restaurants did this during the pandemic to cover additional costs for masks, silicon gloves. Can we be sure the adjustment is actually being given in increased wages?

Masks/gloves for businesses s/b covered with PPP Government forgiveable loans, as well as their employees wages. The businesses ‘don’t talk about that part…’

[Stu from NYC]

They are adding gratuity to our total at the Poke in Brownwood. You won't notice it unless you ask for your receipt. I don't have a problem tipping as long as I know I am doing it.

Would never pay for anything without getting a receipt.

There is something to be said that a tip should be earned not just given.

We do plan for going to poke but would ask them to remove the gratuity so I can put in what I feel is appropriate which is normally 20% or a bit more these days.

[croughwell]

This started to become common practice in South Beach because foriegn tourists didn't tip.

[nn0wheremann]

Tipping is obnoxious. Pay the staff a reasonable wage, charge the customer an honest price.

[LucyP]

Restaurants and stores are charge for each CC payment by percent and some pass it on instead adding to price of items. It’s company they choice to process their CC payments. I worked in a store and price of items were added like dollar more or two to makeup for charges, so nobody had a extra charge on their sale slip.

[Bill14564]

This started to become common practice in South Beach because foriegn tourists didn't tip.

But did that turn out better or worse for the employees? I normally tip 20% or more UNLESS I see that gratuity has been added; if I see 15% or 18% has already been added then I figure that is sufficient.

I usually don't look at the check closely enough to see that a gratuity or service charge has been added. Guess I'll have be start paying more attention.

[photo1902]

Just another way of charging more, rather than re-printing the menus.

In Europe, "Servis Compris" means the tip is already added to the menu price. You can leave more if you'd like. There are pros and cons to both (Europe vs. US).

I would think that the servers in Miami would be totally against any "service charge" since the customer would think it's the tip. It really wouldn't last very long.

Skip

Many restaurants in Miami and South Beach have had this "service charge" for years. We were shocked to find this out on a trip a few years ago.

[ron32162]

So if your tax amount is let say is 5.00 and 20% of that would be 1 cent, That worries you?

[JMintzer]

So if your tax amount is let say is 5.00 and 20% of that would be 1 cent, That worries you?

Ummm... Try $1.25... I know, Maths is hard... :icon_wink:

[Vermilion Villager]

Several drinking establishments in Northern Minnesota now charge if you use a credit card. Usually 2-3%. I questioned it and the owner said "last year I paid $50,000 in credit card fees". To which I responded if $50,000 is 2% of the total charges your customers paid… That means you took in $2.5 million in gross revenue. He shut up real quick!

[Bill14564]

I just read an article (not in the local paper) about the ruling. I have to say, I disagree with the ruling and the restaurants. Technically, the ruling is probably correct but realistically it is wrong.

What the restaurant is saying:
- The service charge is not a tip, it is a charge to cover the wages of the employees. The law requires that the restaurant pay a minimum wage and the service charge is used to meet that minimum wage. If the customer desires to leave an extra gratuity (tip) for the server, they should do that.

What the customer (me) believes:
- The restaurant is trying to protect their employees from customers who do not tip and therefore adds the tip to the check. The 18% (or whatever amount) is a tip on top of the minimum wage the restaurant already pays. The customer does not need to leave a gratuity because it is already included.

What it boils down to:
- In the case of the Miami restaurant, they are raising their prices in a deceitful way that harms their employees. The restaurant needs/wants to charge more for their food in order to pay the legally-required minimum wage but doesn't want to drive away customers. By adding the service charge they can collect more from the customer while keeping the prices the same. The customer believes this service charge is a "tip" even though it is actually used to cover minimum wages. Since the tip is already included the customer either does not leave more or leaves very little more. The employees lose out on actual tips.

IMPORTANT: This was the argument made by the Miami restaurant. Other restaurants may actually pass the service charge to the employees as an actual tip in addition to their legally-acceptable wages.

[Bill14564]

So if your tax amount is let say is 5.00 and 20% of that would be 1 cent, That worries you?

Ummm... Try $1.25... I know, Maths is hard... :icon_wink:

??? The calculator on my computer tells me that 20% of $5.00 is $1.00. Where did the extra $0.25 come from?

[Stu from NYC]

??? The calculator on my computer tells me that 20% of $5.00 is $1.00. Where did the extra $0.25 come from?

New math?

[Rainger99]

Interesting article where the writer was almost tricked into tipping 43 percent of the food-and-beverage total!


Diner beware: A few tips about tips in South Florida’s restaurant minefield | Michael Mayo - South Florida Sun Sentinel - South Florida Sun-Sentinel (https://www.sun-sentinel.com/entertainment/restaurants-and-bars/the-eat-beat/fl-et-restaurant-tipping-problems-20190928-x7wn4hmf3vcurkdqd2zktzczt4-story.html)

[Rainger99]

An explanation of the court ruling and the law.

Servers Call Foul on the System That Lets Miami Restaurants Keep Service Charges | Miami New Times (https://www.miaminewtimes.com/restaurants/servers-call-foul-on-the-system-that-lets-restaurants-keep-service-charges-8890491)

[flsteve]

Several drinking establishments in Northern Minnesota now charge if you use a credit card. Usually 2-3%. I questioned it and the owner said "last year I paid $50,000 in credit card fees". To which I responded if $50,000 is 2% of the total charges your customers paid… That means you took in $2.5 million in gross revenue. He shut up real quick!

:bigbow: HAHAHA! Weaponized Mathematics!!!

[fgsJr]

First of all always review the bill for proper charges. Question any additional charges, there may be a valid reason…
Remember that tipping is a substantial part of your server’s income and should represent your satisfaction with the quality of their service. It is a luxury to have your meals prepared, served and dishes cleared/washed, so respect all the staff for their labors and courtesy.
In our current environment with all the difficulties hiring good people I reward my servers with higher than normal tips (30-35% or more) for their willingness to work for me. A bonus for a job well done!
Respect that shortages in staffing cause delays in service and don’t penalize the staff, unless they are rude or incompetent… (a big tip isn’t always deserved).
Enjoy being served and share your bounty, it is rewarding in the end!

(Historical note: TIPS were often paid in advance “To Insure Prompt Service” {TIPS})

[BumpaOompa]

People who continue to work while others opt out for whatever reason (great resignation, recipients of entitlement funding, etc) are not owed unusually high tips (30-35%). You are not the norm if you are doing this. Tipping has gotten way out of control! Every register flipped back at you demands a tip even if you order at a counter, pick your food up yourself and buss your own table. I leave a tip commensurate for the service. Like it is meant to be.

[Stu from NYC]

People who continue to work while others opt out for whatever reason (great resignation, recipients of entitlement funding, etc) are not owed unusually high tips (30-35%). You are not the norm if you are doing this. Tipping has gotten way out of control! Every register flipped back at you demands a tip even if you order at a counter, pick your food up yourself and buss your own table. I leave a tip commensurate for the service. Like it is meant to be.

Tipping has gotten out of hand. When I stand at a counter to get my food than take a cup to get my drink and than bus my table, exactly why should I now be tipping anyone?

[Keefelane66]

No server is worth a 30-35% tip!

[Heytubes]

You can change a courtesy charge but not a credit card service charge according to my credit card processor when I ran my business.

[retiredguy123]

If that comes to The Villages many will consider it the tip or adjust the tip accordingly. Many restaurants did this during the pandemic to cover additional costs for masks, silicon gloves. Can we be sure the adjustment is actually being given in increased wages?
Why should I care if the "service charge" is paid to the server? If the restaurant is charging for it, they are conveying to the customer that it replaces the tip, and they should be paying it to the server. If they don't, isn't that between the restaurant and the server?

[JSR22]

People who continue to work while others opt out for whatever reason (great resignation, recipients of entitlement funding, etc) are not owed unusually high tips (30-35%). You are not the norm if you are doing this. Tipping has gotten way out of control! Every register flipped back at you demands a tip even if you order at a counter, pick your food up yourself and buss your own table. I leave a tip commensurate for the service. Like it is meant to be.

My husband and I leave a minimum of 30%.

[Bill14564]

Why should I care if the "service charge" is paid to the server? If the restaurant is charging for it, they are conveying to the customer that it replaces the tip, and they should be paying it to the server. If they don't, isn't that between the restaurant and the server?

This is why *I* care:

I believe the price I pay for my meal goes towards paying the server the legally mandated minimum wage. I believe the tip I leave for the server is in addition to that minimum wage. If the "service charge" is actually used to pay the minimum wage then:

1. The restaurant misled me as to the real cost of my meal - instead of being charged $40 I was really charged $47.20

2. While I was led to believe I was putting $7.20 extra into the server's pocket, that money really went into the owner's pocket.

3. I unintentionally end up "stiffing" a server who provided decent service and that matters to me a lot

[retiredguy123]

This is why *I* care:

I believe the price I pay for my meal goes towards paying the server the legally mandated minimum wage. I believe the tip I leave for the server is in addition to that minimum wage. If the "service charge" is actually used to pay the minimum wage then:

1. The restaurant misled me as to the real cost of my meal - instead of being charged $40 I was really charged $37.20

2. While I was led to believe I was putting $7.20 extra into the server's pocket, that money really went into the owner's pocket.

3. I unintentionally end up "stiffing" a server who provided decent service and that matters to me a lot
It is not correct that the tip is added to the minimum wage. Tipped employees are usually paid much less than the minimum wage, and the restaurant is allowed to apply the tip income to make up the difference between the lower wage and the mandated minimum wage. The court case, cited by the OP, ruled that the service charge could not be treated as tip income for the purpose of making up the difference between the lower income and the minimum wage.

I understand your point, but I don't think the restaurant can have it both ways. If they are charging a service charge for service, I don't think they should keep that money, and then to expect the customer to pay an additional fee in the form of a tip to the server. Just my opinion.

[Bill14564]

It is not correct that the tip is added to the minimum wage. Tipped employees are usually paid much less than the minimum wage, and the restaurant is allowed to apply the tip income to make up the difference between the lower wage and the mandated minimum wage.

I understand your point, but I don't think the restaurant can have it both ways. If they are charging a service charge for service, I don't think they should keep that money, and then to expect the customer to pay an additional fee in the form of a tip to the server. Just my opinion.

I believe (here it is (https://minimumwage.com/state/florida/?utm_source=google&utm_medium=cpc&gclid=EAIaIQobChMIk6bIq6bV9gIVyN7ICh1-jwsvEAAYAiAAEgJCQvD_BwE)) that there is a minimum wage for most workers and a separate, lower minimum wage for tipped workers; the idea being that tips would make up the difference between the two. I believe in the Miami case the restaurant owner successfully argued that the service charge was not a tip and could be used towards the minimum wage.

I agree that the restaurant should not keep that money and then expect the customer to pay an additional tip. However, I believe that is exactly what the ruling was in the Miami case. (and one of the posted links listed similar rulings in the past).

You and I seem to agree on how things *SHOULD* work which is why I care that the sometimes don't actually work that way.

[retiredguy123]

I believe (here it is (https://minimumwage.com/state/florida/?utm_source=google&utm_medium=cpc&gclid=EAIaIQobChMIk6bIq6bV9gIVyN7ICh1-jwsvEAAYAiAAEgJCQvD_BwE)) that there is a minimum wage for most workers and a separate, lower minimum wage for tipped workers; the idea being that tips would make up the difference between the two. I believe in the Miami case the restaurant owner successfully argued that the service charge was not a tip and could be used towards the minimum wage.

I agree that the restaurant should not keep that money and then expect the customer to pay an additional tip. However, I believe that is exactly what the ruling was in the Miami case. (and one of the posted links listed similar rulings in the past).

You and I seem to agree on how things *SHOULD* work which is why I care that the sometimes don't actually work that way.
I'm confused. Yes, the service charge can apply to the minimum wage, but only if it is paid to the servers as income. But, if the service charge were to be counted as tip income, it could also be applied to make up the minimum wage. Tipped income is the property of the server, not the restaurant. The restaurant is not allowed to keep any tip income. But, since the service charge was ruled not to be tip income, then it is the property of the restaurant. The bottom line is that restaurant servers must be paid at least the mandated minimum wage, either as a salary or as a salary plus their tip income.

Yes, we agree on how things should be, but I am not going to lose any sleep worrying about how much money restaurant servers make.

[JMintzer]

??? The calculator on my computer tells me that 20% of $5.00 is $1.00. Where did the extra $0.25 come from?

My bad, I misread it as 25%... Regardless, it's certainly a lot more than 1 cent... :icon_wink:

[JMintzer]

Several drinking establishments in Northern Minnesota now charge if you use a credit card. Usually 2-3%. I questioned it and the owner said "last year I paid $50,000 in credit card fees". To which I responded if $50,000 is 2% of the total charges your customers paid… That means you took in $2.5 million in gross revenue. He shut up real quick!

:bigbow: HAHAHA! Weaponized Mathematics!!!

"Gross Revenue" ≠ Profit...

[PugMom]

They are adding gratuity to our total at the Poke in Brownwood. You won't notice it unless you ask for your receipt. I don't have a problem tipping as long as I know I am doing it.

exactly, i'm with you. this leaves a bad taste in the mouth, no pun intended

[Keefelane66]

Amazon did something similar like this and it cost them $61 million in wage reimbursement it’s offsetting the labor cost of employer the servers won’t be making $6.85 hourly!
“ At the start of the Amazon Flex program, the company paid drivers at least $18 per hour plus 100% of customer tips. But in late 2016, the FTC says Amazon made secret changes to the program without telling drivers or customers. Rather than passing 100% of tips on to drivers, Amazon pocketed about a third of each tip to offset the guaranteed minimum Amazon promised to drivers. As the complaint explains it, “[F]or a one-hour block offering $18-$25, if Amazon’s base rate in the particular location was $12, and the customer left a $6 tip for the driver, then Amazon paid the driver only $12 and used the full customer tip of $6 to reach its minimum payment of $18 to the driver.” In other words, despite representations to drivers and customers, Amazon took a sizable portion of the tips customers expressly earmarked for drivers and used the money to reduce its own labor costs.”

[retiredguy123]

Amazon did something similar like this and it cost them $61 million in wage reimbursement it’s offsetting the labor cost of employer the servers won’t be making $6.85 hourly!
“ At the start of the Amazon Flex program, the company paid drivers at least $18 per hour plus 100% of customer tips. But in late 2016, the FTC says Amazon made secret changes to the program without telling drivers or customers. Rather than passing 100% of tips on to drivers, Amazon pocketed about a third of each tip to offset the guaranteed minimum Amazon promised to drivers. As the complaint explains it, “[F]or a one-hour block offering $18-$25, if Amazon’s base rate in the particular location was $12, and the customer left a $6 tip for the driver, then Amazon paid the driver only $12 and used the full customer tip of $6 to reach its minimum payment of $18 to the driver.” In other words, despite representations to drivers and customers, Amazon took a sizable portion of the tips customers expressly earmarked for drivers and used the money to reduce its own labor costs.”
It sounds like a different situation. I don't think Amazon drivers qualify as "tipped" employees per the IRS definition. Tipped employees are those who regularly receive a substantial portion of their income in the form of tips, like restaurant servers. But, as a general rule, when a customer gives a tip to an employee, the tip is the property of the employee, not the employer.

[dewilson58]

No server is worth a 30-35% tip!

When you go to Katie Belle's and order a Diet Coke, you should leave a 100% tip.

[montagnard1969]

The best way to tip is to give cash as this way it goes directly to the server without taxation. They put the cash into a pool or in their pocket without the IRS sticking their hand in the workers pocket every minute.

[retiredguy123]

The best way to tip is to give cash as this way it goes directly to the server without taxation. They put the cash into a pool or in their pocket without the IRS sticking their hand in the workers pocket every minute.
I don't support assisting people to cheat on their taxes. Tipped employees already get a favorable tax treatment by paying income tax on only 8 percent of the restaurant gross sales, even though they usually receive more than that in tips.

[Stu from NYC]

The best way to tip is to give cash as this way it goes directly to the server without taxation. They put the cash into a pool or in their pocket without the IRS sticking their hand in the workers pocket every minute.

Why would you encourage people to cheat on their taxes? Or is that ok in your book?

[montagnard1969]

Another poster wrote she asked the servers wages and was told the server was paid $6.85 per hour. Consider below:
Did you ask her the value of her tips are for a complete schedule of work, whether 6,5,4 or 3 days per week? If she has good repeat customers she can easily double that figure. If she provides courteous, prompt service [allowing for the kitchen being inundated with orders at the same time] servers can make double or triple the "actual wages" they receive from their employer. If the employer allows them to keep all their own tips [not pooling them with all the other servers and divided up at the end of their shift or day] then it is possible to make a reasonable wage [I didn’t say livable wage depending on housing expenses where they live] as a server.
In my life experience I have had personal friends go to college and while in school, work as a bartender or meal server. When they graduated college some of them stayed in their college job because the entry level wage for their college education was well below what they were earning in their college job.
Please consider the mandatory [after 5 years of annual implementation] of the $15 minimum wage law going into effect in Florida and other states. The industry in general have already figured out a work around for this. They will only hire part time workers whom the law will exempt under its statute. The fast food industry has been experimenting with automated robotic food preparation systems which will augment their part time workforce. Overall everything seeks its own level and this situation will do the same.
Good servers deserve good tips for their efforts. I reward based on personality [friendly, courteous] quality of service [attentive, responsive to requests]. 10% poor, 15% quality, 20% outstanding. Personally tipping in the US has gotten completely out of hand. When I worked in a trade, we received no tips. Now these so-called experts are telling us we need to tip for things like having furniture delivered, dry cleaning service, self-service counter help, mail delivery, etcetera. Sorry folks, if you want a better wage get training in a better paying field, learn an in demand skill, go back to school part time or enroll in a training program. Low wage jobs were never intended to be a career, much less a “living wage” position.

[Nick B]

i always take off the tax amount before calculating the tip amount @20%

this will be something else that I'll take off before calculating the tip amount
So on a $50 dollar bill tax $3.50 you saved $0.70? Bless your heart.

[Nick B]

Another poster wrote she asked the servers wages and was told the server was paid $6.85 per hour. Consider below:
Did you ask her the value of her tips are for a complete schedule of work, whether 6,5,4 or 3 days per week? If she has good repeat customers she can easily double that figure. If she provides courteous, prompt service [allowing for the kitchen being inundated with orders at the same time] servers can make double or triple the "actual wages" they receive from their employer. If the employer allows them to keep all their own tips [not pooling them with all the other servers and divided up at the end of their shift or day] then it is possible to make a reasonable wage [I didn’t say livable wage depending on housing expenses where they live] as a server.
In my life experience I have had personal friends go to college and while in school, work as a bartender or meal server. When they graduated college some of them stayed in their college job because the entry level wage for their college education was well below what they were earning in their college job.
Please consider the mandatory [after 5 years of annual implementation] of the $15 minimum wage law going into effect in Florida and other states. The industry in general have already figured out a work around for this. They will only hire part time workers whom the law will exempt under its statute. The fast food industry has been experimenting with automated robotic food preparation systems which will augment their part time workforce. Overall everything seeks its own level and this situation will do the same.
Good servers deserve good tips for their efforts. I reward based on personality [friendly, courteous] quality of service [attentive, responsive to requests]. 10% poor, 15% quality, 20% outstanding. Personally tipping in the US has gotten completely out of hand. When I worked in a trade, we received no tips. Now these so-called experts are telling us we need to tip for things like having furniture delivered, dry cleaning service, self-service counter help, mail delivery, etcetera. Sorry folks, if you want a better wage get training in a better paying field, learn an in demand skill, go back to school part time or enroll in a training program. Low wage jobs were never intended to be a career, much less a “living wage” position.
Says who? Where is this written?

[Stu from NYC]

Another poster wrote she asked the servers wages and was told the server was paid $6.85 per hour. Consider below:
Did you ask her the value of her tips are for a complete schedule of work, whether 6,5,4 or 3 days per week? If she has good repeat customers she can easily double that figure. If she provides courteous, prompt service [allowing for the kitchen being inundated with orders at the same time] servers can make double or triple the "actual wages" they receive from their employer. If the employer allows them to keep all their own tips [not pooling them with all the other servers and divided up at the end of their shift or day] then it is possible to make a reasonable wage [I didn’t say livable wage depending on housing expenses where they live] as a server.
In my life experience I have had personal friends go to college and while in school, work as a bartender or meal server. When they graduated college some of them stayed in their college job because the entry level wage for their college education was well below what they were earning in their college job.
Please consider the mandatory [after 5 years of annual implementation] of the $15 minimum wage law going into effect in Florida and other states. The industry in general have already figured out a work around for this. They will only hire part time workers whom the law will exempt under its statute. The fast food industry has been experimenting with automated robotic food preparation systems which will augment their part time workforce. Overall everything seeks its own level and this situation will do the same.
Good servers deserve good tips for their efforts. I reward based on personality [friendly, courteous] quality of service [attentive, responsive to requests]. 10% poor, 15% quality, 20% outstanding. Personally tipping in the US has gotten completely out of hand. When I worked in a trade, we received no tips. Now these so-called experts are telling us we need to tip for things like having furniture delivered, dry cleaning service, self-service counter help, mail delivery, etcetera. Sorry folks, if you want a better wage get training in a better paying field, learn an in demand skill, go back to school part time or enroll in a training program. Low wage jobs were never intended to be a career, much less a “living wage” position.

Very well said

[Get real]

Darrells' Diner charges a .50 service charge.

[Get real]

Why would you encourage people to cheat on their taxes? Or is that ok in your book?

It used to not be....but now I'm not so sure.

[Babubhat]

Finding it easier to use Doordash. Often less expensive with all the promotions. Same food, less hassle

[retiredguy123]

Darrells' Diner charges a .50 service charge.
50 cents? What is the point of that?

[Babubhat]

The best way to tip is to give cash as this way it goes directly to the server without taxation. They put the cash into a pool or in their pocket without the IRS sticking their hand in the workers pocket every minute.

Doesn’t work that way. Read the IRS guidance

IRS Offers Tips about Tips | Internal Revenue Service (https://www.irs.gov/newsroom/irs-offers-tips-about-tips)

[BamaBoy451]

Just recently I ordered takeout from a restaurant not in TV. When I got home, I noticed on the receipt, I was charged a service fee. Being curious, I called the restaurant and questioned it. I was told they are now charging a service fee for using a credit card whether dining in or taking out. So an eggplant hero which was $10, cost me in the end $15 after the CC service fee and a jar tip. Always ask for a receipt, and question any extra charges they don't tell you about....

The most I've paid for a service fee for using a credit card at any of the restaurants around here was 37 cents regardless of the amount of the bill. To my understanding restaurants used to absorb that as a cost of doing business but during and after covid and the present economic situation, they no longer can.

[Bill14564]

The most I've paid for a service fee for using a credit card at any of the restaurants around here was 37 cents regardless of the amount of the bill. To my understanding restaurants used to absorb that as a cost of doing business but during and after covid and the present economic situation, they no longer can.

"no longer can" should be "no longer will." They can do it if they choose to, they just choose not to.

I've definitely paid more than 37 cents for the service charge. I remember one place in particular but I know there have been others. 2% is common which would be 40 cents on a $20 order.

[retiredguy123]

The most I've paid for a service fee for using a credit card at any of the restaurants around here was 37 cents regardless of the amount of the bill. To my understanding restaurants used to absorb that as a cost of doing business but during and after covid and the present economic situation, they no longer can.
If a restaurant claims that they need extra money for credit card purchases, I think they are lying. It has long been proven that credit card customers spend substantially more money than cash customers. When McDonald's started accepting credit cards, their average purchase amount increased by almost 50 percent. If restaurants stopped accepting credit cards, many of them would go out of business.

[Dusty_Star]

They are adding gratuity to our total at the Poke in Brownwood. You won't notice it unless you ask for your receipt. I don't have a problem tipping as long as I know I am doing it. I agree with you.

[retiredguy123]

They are adding gratuity to our total at the Poke in Brownwood. You won't notice it unless you ask for your receipt. I don't have a problem tipping as long as I know I am doing it.
I'm confused. How do they add money to the total without giving you a bill and a receipt? What if you pay cash?

[ThirdOfFive]

Can’t say much about Miami, but I was recently told by a waitress at Cody’s, that she made $6.85/hr.

If that’s the case, and considering that quite a bit of the the time that food and drinks at Codys is discounted, are we tipping enough?

If we tip for one drink when it’s two-for-one, is that enough?
The minimum wage in Florida is $10 per hour, but that doesn't include "tipped" employees.

Paying waitstaff workers $6.85 an hour assures two things: constant turnover and mediocre service. Something better comes along and they're out the door, and who can blame them? Much better to pay them more per hour, $10 or even higher. Probably more economical for the restaurant in the long run, cutting turnover costs and assuring more competent service (and thus more return business).

[mtdjed]

It is not correct that the tip is added to the minimum wage. Tipped employees are usually paid much less than the minimum wage, and the restaurant is allowed to apply the tip income to make up the difference between the lower wage and the mandated minimum wage. The court case, cited by the OP, ruled that the service charge could not be treated as tip income for the purpose of making up the difference between the lower income and the minimum wage.

I understand your point, but I don't think the restaurant can have it both ways. If they are charging a service charge for service, I don't think they should keep that money, and then to expect the customer to pay an additional fee in the form of a tip to the server. Just my opinion.

In Florida, there is a minimum wage for most employees which I believe is $10/hour. For tipped employees, there is a separate minimum wage rate of $6.98. (There are exceptions to the minimum wage ). Typically, waiters, bartenders etc are considered tipped employees whereas a cook or dishwasher are not. So I would assume that these other workers are paid at or above the higher minimum wage. I have read theat a "Service Charge" can effectively be used by the management to be applied by the management to meet the minimum wage requirement, thus I believe that to discount the tip due to a service charge would wrongly hurt the Wait staff.
However, I migrate to someplace like McDonalds or Culvers. I would argue that the workers there would all be non-tipped employees and therefore should be paid the $10.00 minimum wage.
A tipped employee would be foolish to working the job without getting tips that would exceed the $10 minimum wage. Since the tip is based upon meal value, the best of these jobs would be in high volume, high cost restaurants. A meal of $100 at 20% tip would be $20. Depending upon sharing pool split , that could easily exceed the higher minimum wage. Several tables an hour could be a nice wage. Thus, a waitress who says she is paid $6.85/ hour is only telling a portion of the story.

[JMintzer]

The minimum wage in Florida is $10 per hour, but that doesn't include "tipped" employees.

Paying waitstaff workers $6.85 an hour assures two things: constant turnover and mediocre service. Something better comes along and they're out the door, and who can blame them? Much better to pay them more per hour, $10 or even higher. Probably more economical for the restaurant in the long run, cutting turnover costs and assuring more competent service (and thus more return business).

Yes it does. There is a "basic" minimum wage of $6.98 for servers, but if the tips are not enough, the employer must make up the difference to $10.00...

"Effective September 30, 2021 the minimum wage in Florida increased to $10.00 an hour, and the required cash wage for tipped employees increased to $6.98."

[Henryk]

??? The calculator on my computer tells me that 20% of $5.00 is $1.00. Where did the extra $0.25 come from?

:pray::pray: Thank you.

[Haggar]

[

Current minimum wage is $10.00 except for tipped employees which is $6.98

Both to go up September 1.

[Babubhat]

Use the Seinfeld tip wizard

[JMintzer]

[

Current minimum wage is $10.00 except for tipped employees which is $6.98

Both to go up September 1.

But...

If, when tips are added in, if the employee doesn't average at least $10/hr, the employer must make up the difference...

[retiredguy123]

Use the Seinfeld tip wizard
The Seinfeld Tip Wizard is not available on Amazon, but you can buy an "Easy Tip Card" for $5.49. The original Seinfeld tip wizard was $200 in 1998.

[wisbad1]

They are adding gratuity to our total at the Poke in Brownwood. You won't notice it unless you ask for your receipt. I don't have a problem tipping as long as I know I am doing it.
How much did they charge? Really not a fan of the way it’s done

[pauld315]

Tipping is obnoxious. Pay the staff a reasonable wage, charge the customer an honest price.

I can just hear the explosion if all restaurants simply raised their prices 20% to give to the employees in lieu of tipping.

[pauld315]

No server is worth a 30-35% tip!






Yes there are but certainly not all of them

[pauld315]

The minimum wage in Florida is $10 per hour, but that doesn't include "tipped" employees.

Paying waitstaff workers $6.85 an hour assures two things: constant turnover and mediocre service. Something better comes along and they're out the door, and who can blame them? Much better to pay them more per hour, $10 or even higher. Probably more economical for the restaurant in the long run, cutting turnover costs and assuring more competent service (and thus more return business).

Everybody mourns the poor restaurant worker. Here are a couple examples of great severs and bartenders I have spoken to about this. A waiter I knew told me that he makes 40 to 50 dollars per hour every hour that he works. A lot of that is cash so I doubt it ever makes it to his 1040. A great bartender I know just told me he is extremely busy and makes about 100 dollars per hour in tips. How do you think these 2 would react if they were told they were now going to make 15 an hour but they would no longer get any tips ?

[Bill14564]

No server is worth a 30-35% tip!

Yes there are but certainly not all of them

Everybody mourns the poor restaurant worker. Here are a couple examples of great severs and bartenders I have spoken to about this. A waiter I knew told me that he makes 40 to 50 dollars per hour every hour that he works. A lot of that is cash so I doubt it ever makes it to his 1040. A great bartender I know just told me he is extremely busy and makes about 100 dollars per hour in tips. How do you think these 2 would react if they were told they were now going to make 15 an hour but they would no longer get any tips ?

Those two "great severs(sic) and bartenders" probably would not be happy. But as you point out, not all servers and bartenders make that level of tips. Those who do not may welcome a more consistent and reliable income.

[retiredguy123]

They are adding gratuity to our total at the Poke in Brownwood. You won't notice it unless you ask for your receipt. I don't have a problem tipping as long as I know I am doing it.
According to the Poke restaurant, they do not automatically add a tip to the bill. They suggest a tip on their credit card system, but tipping is entirely optional.

[Number 10 GI]

Several drinking establishments in Northern Minnesota now charge if you use a credit card. Usually 2-3%. I questioned it and the owner said "last year I paid $50,000 in credit card fees". To which I responded if $50,000 is 2% of the total charges your customers paid… That means you took in $2.5 million in gross revenue. He shut up real quick!

There is a lot of difference between gross revenue and net profit. All kinds of businesses fail because there is no net profit after business expenses are taken from the gross revenue. Credit card fees are just one of those expenses.

[Keefelane66]

Everybody mourns the poor restaurant worker. Here are a couple examples of great severs and bartenders I have spoken to about this. A waiter I knew told me that he makes 40 to 50 dollars per hour every hour that he works. A lot of that is cash so I doubt it ever makes it to his 1040. A great bartender I know just told me he is extremely busy and makes about 100 dollars per hour in tips. How do you think these 2 would react if they were told they were now going to make 15 an hour but they would no longer get any tips ?
It's not a skill to pour wine or beers and putting a shot in glass with ice.

[retiredguy123]

There is a lot of difference between gross revenue and net profit. All kinds of businesses fail because there is no net profit after business expenses are taken from the gross revenue. Credit card fees are just one of those expenses.
I guess restaurants can charge a fee to use a credit card, if they want. But, if they stop accepting credit cards, they will lose a lot of business and profit. McDonald's found that their average transaction amount increased by about 50 percent when they started accepting credit cards. As a prior business owner, I never charged customers a fee to use a credit card.

[Number 10 GI]

Everybody mourns the poor restaurant worker. Here are a couple examples of great severs and bartenders I have spoken to about this. A waiter I knew told me that he makes 40 to 50 dollars per hour every hour that he works. A lot of that is cash so I doubt it ever makes it to his 1040. A great bartender I know just told me he is extremely busy and makes about 100 dollars per hour in tips. How do you think these 2 would react if they were told they were now going to make 15 an hour but they would no longer get any tips ?

Out of that tip money they have to pay the same taxes everyone else pays. My granddaughter worked as a server while in college and she did make good money on tips, but nothing like the amounts cited above. The government has enacted laws that makes it difficult for a server to claim less money in tips than actually received. There is some wiggle room to cheat but not that much. I've never heard of a restaurant providing health care coverage for servers, so out of the tips received they must also pay for medical insurance which isn't cheap. I've known quite a few people who have worked as servers and they struggle to keep up with living expenses.

[retiredguy123]

Out of that tip money they have to pay the same taxes everyone else pays. My granddaughter worked as a server while in college and she did make good money on tips, but nothing like the amounts cited above. The government has enacted laws that makes it difficult for a server to claim less money in tips than actually received. There is some wiggle room to cheat but not that much. I've never heard of a restaurant providing health care coverage for servers, so out of the tips received they must also pay for medical insurance which isn't cheap. I've known quite a few people who have worked as servers and they struggle to keep up with living expenses.
The IRS has an 8 percent rule for restaurant tip income. The restaurant totals up their gross income and multiplies it by 0.08. Then, they issue W-2 income forms in that total amount to the tipped employees, pro-rated by the number of hours they worked during year. The employee who receives the W-2 form has two choices. They can pay income tax on the amount shown on the W-2, or they can claim to the IRS that they made a different (lower) amount and be prepared to prove that lower amount in an audit. So, if a restaurant server makes an average of 16 percent in tips, they will only need to pay income tax on half of their tip income. It is an IRS rule and not considered cheating.

[FrankandJodi]

They are adding gratuity to our total at the Poke in Brownwood. You won't notice it unless you ask for your receipt. I don't have a problem tipping as long as I know I am doing it.

Island Fin Poke definitely does not charge gratuity. I looked today. There is a choice for tip, signature and then continue button just like Too Jays and many other restaurants.
If you would like to leave these wonderful workers cash, there is an option to leave no tip on the credit card charge and ten tip in cash.
Wonderful DOLE WHIP as well as lunch and dinner options.