Restaurant adds 'minimum wage fee' to its bills

[contango]

Usually you go through a warning system and then you fire someone, or as is the case here you can fire for any reason during a 90 day trial period.

I guess it varies from place to place. From what I gather in some parts of Europe it can be very difficult to fire someone. I've seen people here in the UK get warning after warning after warning but still never get kicked out.

The problem with the "strip club system" is that it still relies upon people tipping and takes away the owners responsibility to pay for the workers services properly. It has major flaws too, I imagine being pretty might help you get tipped more over someone just as good but not as popular.

In a restaurant setting where efficiency is more important than good looks it certainly has its shortcomings, although in many ways it seems that most systems will work reasonably well as long as everybody knows how it's supposed to work.

If you have a tipping culture and it's clear from the prices that service isn't included then it works, even if it can be annoying having to mentally juggle figures to figure that $10 on the menu really means $12.10. At the same time one practise I've seen here in the UK annoys me enough that I'll boycott any restaurant that does it, and that's to add a 15% service charge to the bill and then present the customer with a credit card chit with a space left open for a gratuity.

I also think that there should be some leeway for employers not to know everything about their staff. Gauging performance should be built into the managerial system. If you know everything all of the time it just builds prejudice and lack of a fair environment.

Gauging performance is a management job but it's not always possible to objectively measure performance. If a customer complains about a waiter it can be hard to know whether there's a problem with the waiter, the waiter just had an off day and is normally fine, or the customer just had a problem with the waiter. When we see news reports of someone deleting a 15% tip on the credit card and writing a comment like "God gets 10%, what makes you think you're worth 15%?" it's easy to see how things happen that leave people thinking "you couldn't make this up".

I still think there's something wrong with strip clubs and making people pay to be there. It reinforces that the club is somehow doing you a favour. In some places they withhold the workers pay until they get what they want from them. I understand it's a complicated subject.

Based on what the strippers can earn it's easy to argue that the club is doing them a favour. It's not as if anybody forces them to work there. Some years ago I read an article in a local newspaper written by a young woman who quit her job to become a stripper and found she earned three times as much. If you get $2000/week in tips as a stripper and it costs you $100 to work the shifts you're still well ahead of the game. If you were expected to put the $2000 into a centralised pot and the manager decided how much of it to return to you that would be a different situation entirely.

Fundamentally any situation like this involves trading off interests. The worker's interest is getting as much money for as little work as possible while the manager's interest is getting as much work for as little money as possible. Given the two sides to an employment agreement have diametrically opposed aims anything that can align the two interests has to be a good thing.

 

[keith99]

If people go there to eat, they are called restaurants. Even the lowest greasy spoon needs servers, and those people have the right to make a living, just like anyone else.

Where ever a person works, they ought to have the right to earn a minimum wage, just like everyone else. Tips should not be a part of their wages. If they are good at what they do and earn a bit extra in tips, that should not be the employers business.

I usually tip the kid who helps me carry my groceries to the car. Lots of people do. Nobody thinks those tips ought to be counted against their regular wages.

There are plenty of people who work with the public and sometimes a grateful customer may tip them.

Why should waiters and waitresses be any different?

Yes why should they be different. Why should they get tips for just doing their job? Why does the IRS not go after them for failure to report income?

 

[Angelquill]

Yes why should they be different. Why should they get tips for just doing their job? Why does the IRS not go after them for failure to report income?

The way it is right now, the customer is expected to pay a part of the waiter or waitresses wages, and that part does not count toward taxes.
If he or she were making a minimum wage, every bit of that money would be taxable income.

 

[HorsieJuice]

Yes why should they be different. Why should they get tips for just doing their job? Why does the IRS not go after them for failure to report income?

The way it is right now, the customer is expected to pay a part of the waiter or waitresses wages, and that part does not count toward taxes.
If he or she were making a minimum wage, every bit of that money would be taxable income.

What are you guys talking about? Tips absolutely are taxable and are supposed to be reported.

Tax Tip: Tips are taxable income and must be reported to the IRS.

 

[trunks2k]

I don't think it is fair that waiters and waitresses should not be paid a minimum wage just like everyone else.

Legally, they are paid at least minimum wage. If a server is not tipped enough to result in at least minimum wage in compensation for the pay period, the restaurant is supposed to make up the difference. That doesn't mean it actually happens (it seems managers are notorious for not informing their staff of this and/or fudging reported tips).

 

[trunks2k]

The way it is right now, the customer is expected to pay a part of the waiter or waitresses wages, and that part does not count toward taxes.

Yes, it does count towards taxes, or at least is supposed to. Tips are taxable income. The problem is that the amount you tip may not be correctly reported. If you tip cash, a server can just say you gave them, say $2 when you really gave them $5. If you tip on a credit card, that generally can't be hidden because they get it as part of their paycheck.

There is going to be an assumption that a server is going to make at least a certain percent of a sale in tips. So if it's a decently run restaurant that keeps track of sales and who was the server, they are going to see, for example, a $20 sale and assume at least a $2 tip unless otherwise reported. That's why if a customer skips out on tipping on a large bill the server potentially just paid the government for the privilege of serving the customer i.e. tax on assumed tip > (actual tip+(wage/(time spent on customer))).

 

[HorsieJuice]

Legally, they are paid at least minimum wage. If a server is not tipped enough to result in at least minimum wage in compensation for the pay period, the restaurant is supposed to make up the difference. That doesn't mean it actually happens (it seems managers are notorious for not informing their staff of this and/or fudging reported tips).

FYI: the person in the OP is claiming that his state's law does not act this way - that he has to pay his servers minimum wage regardless of their tips.

 

[Angelquill]

It just seems to me that these people ought to be paid just like any other worker. If I tip the kid who carries out my groceries, he sticks that money in his pocket...it is nobody's business but his and mine...if I tip the girl who cuts my hair, ditto...if I tip the young lady who waited on me at the dress shop, nobody cares...why is it such a huge deal if I want to give my waitress some extra money for herself? Why should that count against her wages? It isn't fair.

 

[Angelquill]

What are you guys talking about? Tips absolutely are taxable and are supposed to be reported.

Tax Tip: Tips are taxable income and must be reported to the IRS.

Well, I stand corrected. You might know, Uncle Sam would want his little bite, too. I swear, I'm going to stop tipping anybody...

 

[parousia70]

I don't dispute the idea of some form of minimum wage, as long as it doesn't start to distort the market.

What does that mean?
Distort the Market?

Isn't the "market" self equalizing?

A Hamburger is only worth what people will pay for it, no matter the costs associated with making/serving it.

 

[HorsieJuice]

Well, I stand corrected. You might know, Uncle Sam would want his little bite, too. I swear, I'm going to stop tipping anybody...

Your position doesn't make any sense. Income, whatever the source, is supposed to be reported and taxed. Even income that isn't taxed (e.g. from municipal bonds) is supposed to be reported.

 

[trunks2k]

It just seems to me that these people ought to be paid just like any other worker. If I tip the kid who carries out my groceries, he sticks that money in his pocket...it is nobody's business but his and mine...if I tip the girl who cuts my hair, ditto.

Technically, that's not just between you and the worker. It's really between you, the worker, and the IRS. A tip is taxable income. It is supposed to be reported. Of course, that doesn't mean it gets reported accurately or at all. Technically the IRS could go after someone for it, but it's unrealistic to expect them to. It's not worth the small amount of money and they'd have a super tough time proving the income. People like servers are subject to more scrutiny about it since they are known to make the lion share of their wages through tips (again, if you don't tip someone who works for tips, you might have just made the person pay for the privilege of serving you).

 

[Angelquill]

Your position doesn't make any sense. Income, whatever the source, is supposed to be reported and taxed. Even income that isn't taxed (e.g. from municipal bonds) is supposed to be reported.

Do you think the kid who carries out my groceries reports the $2 I gave him for being so sweet? Or the girl who cut my hair, or the little darling that helped me choose just the right outfit reported the little money I gave them?
If you think they did, Honey, you are even more gullible than I am. And why should they? Uncle Sam already got his share of that money. It's my money, why shouldn't I have the right to give it to whomever I choose?

On the other hand, why should I have to stand in for the cheap restaurant manager who wants me to help pay his servers? He hired them, if they aren't doing their job properly, then let him fire them.
Everyone else who needs employees to serve the public, like the grocery store, or the beauty parlor, or the dress shop, has to pay them a fair wage. If they get tips, that is none of their employer's business. Why should a restaurant be any different?

 

[HorsieJuice]

Do you think the kid who carries out my groceries reports the $2 I gave him for being so sweet? Or the girl who cut my hair, or the little darling that helped me choose just the right outfit reported the little money I gave them?
If you think they did, Honey, you are even more gullible than I am.

Whether they do or not is not the question. They are supposed to.

And why should they?

Because it's the law.

Uncle Sam already got his share of that money.

No, he didn't.

It's my money, why shouldn't I have the right to give it to whomever I choose?

You still have that right. The responsibility to report the income and pay the taxes is on the recipient/earner, not the tipper.

On the other hand, why should I have to stand in for the cheap restaurant manager who wants me to help pay his servers? He hired them, if they aren't doing their job properly, then let him fire them.
Everyone else who needs employees to serve the public, like the grocery store, or the beauty parlor, or the dress shop, has to pay them a fair wage. If they get tips, that is none of their employer's business. Why should a restaurant be any different?

If you want to argue that tips should be separate from wages, and that tips shouldn't be considered "standard," that's fine. I agree with you. But that's not the point I was addressing.

 

[Angelquill]

Technically, that's not just between you and the worker. It's really between you, the worker, and the IRS. A tip is taxable income. It is supposed to be reported. Of course, that doesn't mean it gets reported accurately or at all. Technically the IRS could go after someone for it, but it's unrealistic to expect them to. It's not worth the small amount of money and they'd have a super tough time proving the income. People like servers are subject to more scrutiny about it since they are known to make the lion share of their wages through tips (again, if you don't tip someone who works for tips, you might have just made the person pay for the privilege of serving you).

Exactly. And that is not fair. Nobody should have to depend on the generosity of the customer. The person you work for is the person who ought to pay you. If he wants to charge more for the food to make up the difference, so be it. It is his responsibility to pay the people who work for him, not his customers'.

 

[trunks2k]

Do you think the kid who carries out my groceries reports the $2 I gave him for being so sweet?

Most likely not and the IRS isn't going to care as it's not worth their effort. Technically, he is supposed to.

Or the girl who cut my hair, or the little darling that helped me choose just the right outfit reported the little money I gave them?

That would depend. I believe there are some hair dressers that work for tips. If they do, then they'd be more likely to report at least some of the tip.

And why should they? Uncle Sam already got his share of that money.

No it hasn't.

It's my money, why shouldn't I have the right to give it to whomever I choose?

The money in my paycheck is my company's money. Shouldn't they have the right to give it to whomever it chooses? Income is income. If my parents want to give me $500, technically it's a gift and it's income, and can be taxable (there's some various exceptions in terms of gifts to family members). I am supposed to report it. Not that I will. If it's income, unless stated otherwise, it is taxable.

On the other hand, why should I have to stand in for the cheap restaurant manager who wants me to help pay his servers? He hired them, if they aren't doing their job properly, then let him fire them.

That's a whole other line of discussion. Regardless of how you feel about tipping, that's the business model of 99% of restaurants (I'm not including fast food places in this, I'm talking about sit-down places with a server) run in the US. Failing to tip a server could very well mean the server lost money by serving you.

There are some exceptions of course. A new restaurant that is opening soon in my neighborhood is going to operate on a no-tipping model. Servers will get at a bit over minimum wage plus some sort of profit sharing. People who work in the industry in the area are expressing skepticism. They claim that servers at restaurants of a similar quality and price point make more than the wage promised by this restaurant. It would come down the profit sharing thing, the workings of which are unclear.

Everyone else who needs employees to serve the public, like the grocery store, or the beauty parlor, or the dress shop, has to pay them a fair wage. If they get tips, that is none of their employer's business. Why should a restaurant be any different?

That is just how it is. Personally I look at is I pay the restaurant for the mere presence of the staff and I pay the staff directly based on how well they performed. It may not be the most efficient way of doing things, but that is just how it is.

 

[Joykins]

In the UK you get a waiter/waitress at Pizza Hut so I'd say they do count as a restaurant, even if only in the sense of "you go there to eat, and someone brings your food".

In the US Pizza Hut can vary--it can be a carryout/delivery joint only, it can be an order-at-the-counter place, or it can be a full service restaurant.

 

[Phileas]

Why not just call it a 'service charge' instead of a 'minimum wage fee' and do away with tipping; problem solved. Or just pay people a standard living wage as they do in other industries.

 

[Joykins]

My reaction to the minimum wage fee is that I'm glad to see I so little extra per bill would give my server a better wage. I'm happy to pay it and I'm sure they're happy to get it. WIN.

 

[HorsieJuice]

There are some exceptions of course. A new restaurant that is opening soon in my neighborhood is going to operate on a no-tipping model. Servers will get at a bit over minimum wage plus some sort of profit sharing. People who work in the industry in the area are expressing skepticism. They claim that servers at restaurants of a similar quality and price point make more than the wage promised by this restaurant. It would come down the profit sharing thing, the workings of which are unclear.

I'd be skeptical of this, too. I've worked at enough small businesses and watched enough Kitchen Nightmares/Bar Rescue/Restaurant Impossible/etc to not want to rely on the business savvy of any small-business owner for variability in my paycheck (speaking as if I were a server). If it's an established place with a track record of being profitable, that's one thing. But for a new place, not so much.