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.

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

"Gross Revenue" ≠ Profit...

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

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.

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

Tipping
 

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.

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

Court Ruling, How About Customer Ruling?
 

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.

So on a $50 dollar bill tax $3.50 you saved $0.70? Bless your heart.

Says who? Where is this written?

Very well said

Darrells' Diner charges a .50 service charge.

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

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

50 cents? What is the point of that?

Doesn’t work that way. Read the IRS guidance

IRS Offers Tips about Tips | Internal Revenue Service

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.

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.

I agree with you.

I'm confused. How do they add money to the total without giving you a bill and a receipt? What if you pay cash?

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).

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.

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."

:pray::pray: Thank you.

[

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

Both to go up September 1.

Use the Seinfeld tip wizard

But...

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

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.

How much did they charge? Really not a fan of the way it’s done

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

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.

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.

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.

It's not a skill to pour wine or beers and putting a shot in glass with ice.