Ruling on Restaurant Service Charges
 

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?

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

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

Your spot on! :thumbup:

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

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

Service charges & Tipping
 

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?

Added gratuity is service charge?
 

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.

poke
 

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

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.

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

Service fee for using credit card
 

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....

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

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…’

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.

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

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

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.

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.

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.

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:

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!

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.

??? 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?

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

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

:bigbow: HAHAHA! Weaponized Mathematics!!!

Just ask…
 

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})

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?

No server is worth a 30-35% tip!

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

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?

My husband and I leave a minimum of 30%.

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

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.

I believe (here it is) 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.