Should tipped employees keep their tips?

[spinbaby]

I had dinner with a friend at a lovely little ethic restaurant last night. The food and the service were great. We got to chatting with the waitress, who revealed that she doesn't get to keep her tips. At first we misunderstood and thought maybe she had to split her tips with other wait staff, but she said, no, the restaurant kept her tips and paid her minimum wage.

This is probably legal because she is making minimum wage, but it strikes me as profoundly unfair, both to her and to the customers, who think their money is going to the wait staff.

[liberal N proud]

1. If I went to a restaurant and learned the server does not get the tip, I wouldn't leave one

I paid the establishment for the food, I am paying extra if the service was good and that extra is an incentive for the server, not the business.

[Moliere]

16. This ^

I can't believe this is even a thing. I wish there were an app or way to find out which places support their staff and which rip them off

[Monk06]

70. Hand the server a cash tip when you hand back the bill Cash slipped under the bill

like you are buying drugs

Because that is what it is coming to Tips are illegal profits like Narco cash

Meanwhile the 1% steal Billions in front of everyone, don't pay any taxes
and like Trump, not only brag about it but claim tax evasion as a constitutional
right

To think the DEA executed Pablo Escobar for doing what Trump does every day,
cheat, steal, evade taxes and remove anyone who stands in his way

Escobar bragged about it and was executed Trump brags about it and he is the
GOP presidential nominee

[Drahthaardogs]

75. Tips are stupid and an excuse for business to not pay a decent wage

Every place you go now has tips. I am NOT tipping the counter person at a place where I order food at the counter and get my own drink. I am not tipping anyone at a buffet. I feel sorry for the people, but this needs to end. I do at restaurants because waiters do not make minimum wage.

[House of Roberts]

77. I used to eat at a buffet restaurant where the wait staff kept your drinks filled,

and cleared away used dishes because you had to use clean dishes for every trip to the buffet. They worked hard enough to earn a good tip, and they would get one from me.

[Drahthaardogs]

78. Those are bussers not waiters. They should be paid hourly at least minimum wage and tipping is

optional for good service.

[closeupready]

2. Celebrity chef Gordon Ramsay did an episode of Kitchen Nightmares,

about a cafe/bakery in Arizona that was having issues. The facility itself was spotless and the cook was competent, but the husband/wife owners possessed a siege mentality which made for entertaining viewing but misery for their employees and customers. (I watched that part again just now, and yep, it's just as funny now as it was the first time I saw it, lol. )

In filming the episode, Ramsay spoke on camera with a member of the wait staff who told him that they are not allowed to keep their tips, that the owner kept them. Indignant, Ramsay stopped dinner service, and announced to the restaurant that this was his practice. Of course, customers were outraged, and rightfully so, IMO.

Back to your question, I believe in some jurisdictions this is considered wage theft or some other type of property crime. I'd NEVER patronize a place like that.

[spinbaby]

5. I'll have to look it up

What was the name of the place so I can search it on YouTube?

[closeupready]

6. sent you PM

[avebury]

14. Could you PM the name of the restaurant

to that I can look up the clip? Thanks in advance!

[Renew Deal]

76. It was really funny

They were so crazed that some people thought it was a setup. I think this is it:

[demmiblue]

10. That episode was epic!

What horrible people.

[closeupready]

11. ...

Yup.

[spinbaby]

13. I'm going to make a fresh cup of coffee

And settle in to watch it. Thanks.

[demmiblue]

15. You may as well go the whole nine yards... the aftermath:

This Is The Most Epic Brand Meltdown On Facebook Ever

https://www.buzzfeed.com/ryanhatesthis/this-is-the-most-epic-brand-meltdown-on-facebook-ever?utm_term=.gcJwQAOa6#.doNkrZpB0

Amy's Baking Company in Scottsdale has closed

http://www.azcentral.com/story/entertainment/dining/2015/12/29/amys-baking-company-scottsdale-has-closed/71722292/

[spinbaby]

17. Awesome

When I started watching the Gordon Ramsey episode, I realized that I'd seen it before. Must have blocked it out. At least the restaurant I visited wasn't batshit crazy.

[aikoaiko]

33. Wow, its like they thought emulating the Soup Nazi was a good business model, but forgot they...

...had to make good food.

[closeupready]

39. I think the portion starting at 5:00 minutes is reality show PERFECTION.

I could watch that over and over and over....

The drama is just ... I mean, reality eclipses the English vocabulary here.

[Jesus Malverde]

64. OMGWOW..NT

[La Lioness Priyanka]

37. was this the crazy bakery episode? that one was beyond insane

[closeupready]

38. Yes indeed - I watched it again this morning (post #10) and got a hearty chuckle

to start my day, lol. I never get tired of watching that one.

Hope you are doing well, hon!

[La Lioness Priyanka]

40. I hope you're doing well too

[itsrobert]

3. not allowed in California

http://www.calaborlaw.com/tip-pooling-%E2%80%93-can-my-employer-take-my-tips-and-how-2/

tip pooling, yes. management and owners no

[Egnever]

4. Doesn't sound lovely to me

Sounds exploitative.

What state was this in? Laws differ depending on the state you are in.

[spinbaby]

7. Pennsylvania

The restaurant really was lovely right up until we found out about the tipping deal.

[Egnever]

8. Shame it ruined your evening

but glad you found out. I would bet many of their patrons are unaware.

[Egnever]

12. Seems they can take the tips in Penn

"Pennsylvania allows employers to take a tip credit. Employers must pay tipped employees at least $2.83 an hour. If an employee doesn’t earn enough in tips to bring his or her total compensation up to at least the full minimum wage of $7.25 an hour, the employer must make up the difference. Employers must inform employees if they plan to take a tip credit."

That would be less than $5 per hour in tips though and they can not take more than to make up the minimum wage. Here in Vegas $5 per hour in tips at a lovely place seems very low. Not sure how people tipp in Penn though and tipping does vary across the country.

https://www.simple.com/blog/simple-insights-lets-talk-tipping

[Bluenorthwest]

20. PA has a minimum wage for tipped employees which is $2.83, in Oregon that employee would

get $9.25 an hour and keep all tips.

[titaniumsalute]

9. I think in FL it is illegal

My friend owns a bar/restaurant and I'm pretty sure at least in FL that is illegal. It is also illegal for a manager to keep tips even for themselves. (Even if they are legit working bar/tables.) They have to pool their tips for kitchen/servers, etc.

[Vinca]

18. Unless the restaurant owner is schlepping the trays, the server gets the tip.

Minimum wage does not equate to making a living. They need tips to make a halfway decent amount of money. I would tell the restaurant owner not to expect to see me again until the policy changes and that I'd be sure to tell my friends.

[seabeyond]

19. That would be a need to know. If they were paying upward $12 an hour or more,

that would be one thing. I can get behind that. Minimum wage though, I am not tipping restaurant, I am tipping for the server and living expense.

[Bluenorthwest]

21. In PA where the OP is, the minimum wage for tipped employees is $2.83 an hour.

In my State they get $9.25 and retain all gratuities.

[seabeyond]

22. I do not know how low Texas is, but low like that. It pisses me off to no end that a restaurant

doesn't have to pay wage like all other businesses do. I was waitress/bar tender for a lot of years. Made good money for a less than 40 hour week.

[Bluenorthwest]

24. Texas tipped employees Minimum Wage is $2.14 an hour. Full minimum wage is $7.25

NT

[seabeyond]

23. BTW, I love that your state (clueless) has a high wage and tips.

I had that in California.

[Bluenorthwest]

25. Oregon.

There are things I like about Texas too, but the laws and government are not among them!

[seabeyond]

30. Correct, Texas is bad. I thought the number lower. My son did a bit of restaurant last summer,

and I was so very pissed.

Eugene is on my list of possible moves. Along with Olympia and Fort Angeles. I need the west coast and at least access to the ocean.

[lame54]

46. regardless of pay - they would have to post it...

the overwhelming presumption is tips go to the employees

[metroins]

26. Tipping shouldn't be an expected thing

All employees should be able to expect a stable hourly wage.

However since our culture for some reason likes this tipping idea, they should keep and never split tips.

[Demonaut]

35. tipping is expected at restaurants in the US, other countries not so much

[madokie]

27. When we go out I always give the waitress

or waiter the tip in cash. Some times we use our debit card to pay for the meal but the tip I make sure I have enough cash on me to cover that. We tip at least 20 percent too. We always get good service and good food that way. We have a half dozen restaurants that we eat out at depending on what we're wanting to eat that particular meal.

[TexasBushwhacker]

28. This is why I try to tip in cash

even if I use a credit card. It's easier for the server to pocket the money I'm paying to THEM.

[Lancero]

34. Some places are putting cameras in to deter that.

[Lee-Lee]

29. Tipping should be ended everywhere

Owners of the establishment need to pay their servers a good wage and just work it into the price instead of expecting customers to do it.

Not only is it a more fair system, but it also eliminates a of tax evasion on the part of both the sever and the employer- having been a server I know that virtually no server in the industry reports all their tips so they don't get taxed on them. It's standard virtually everywhere to report just enough to show minimum wage unless it's on a credit card where it must be reported so you don't get taxed on your tips. This means that the employer also then gets away with not having to pay proper payroll taxes on the tips like they are supposed to, so both the server and the employer are tax cheats.

A sever who doesn't report $200 in tips a week- a super low number for most- will mean between the employer and employee share the government is cheated out of around $3500 in taxes when you consider income tax, social security, Medicare, unemployment, state taxes... And while that may not seem like a lot there are around 4.3 million tipped employees in the USA so that means over 15 Billion dollars of taxes owed are evaded every year by both the employees and their employer. And most are under reporting a lot more than that.

On top of that underreported income also allows people who don't qualify for many government assistance programs, everything from rent subsidies to SNAP to EITC to anything else that is income based to fraudulently obtain it because on the books they make minimum wage when in reality they can be pulling down 2-3x that. The server you left a $20 tip for who got 3 other tips that period and only claimed the one on a credit card looks like she made $15 that hour when they really pocketed $50... But they can claim the $15 rate and then with slow hours at opening and closing it works out to minimum wage on paper.

That means people who don't qualify for these programs are able to still claim them and that prevents other people who have a true, greater need from getting the resources. When I worked for an organization that managed Section 8 housing dollars that was always a serious problem for us, we knew that people were making a lot more than they were claiming but it was off the books, so they got resources they really didn't need or qualify for while people with real need sat on a waiting list.

Not only does it enable massive tax evasion and screw up verifying eligibility for need based programs, it also fosters and encourages and attitude of acceptance for tax evasion and lack of respect for our government and how it's funded. Teenagers working for tips learn before they are even old enough to vote that it's "ok" to evade taxes and you end up with more money if you do, while not learning the value of paying their fair share for the government we all benefit from.

[Fumesucker]

31. Sounds like an argument for getting rid of cash altogether

[Lee-Lee]

32. While that won't happen it would be great for eliminating a lot of tax evasion

It is a great arguement for not, as some posters have said, always tipping in cash.

Tipping in cash when you pay with a card means you are encouraging and enabling tax evasion. That's not a progressive stance at all....

[rusty fender]

41. Bullshit!

No one who receives tips should have to pay taxes on any of their tips. Tipped people make so much less money than non-tipped workers that taxing them on the few dollars they receive in tips is tantamount to theft by the gov't.

Do you so identify with the 1% that you think that their tax evasion is equivalent to the poor not reporting their tips?

[Lee-Lee]

42. The law says different

Any employee who gets tipped more than an incidental amount ($20 or $30$ a month) is not only legally obligated to pay the taxes but thier employer is also obligated to pay their share of payroll taxes.

Corporations with chains who employ tipped employees love your attitude because they can get away with evading millions or billions of taxes a year when their employees don't report so they don't have to pay the taxes they are legally obligated to.

The law is the law. Progressives who believe in a proper system of government that provides services in exchange for everyone paying their fair share shouldn't advocate one group of employees get away with tax evasion while another doesn't.

Why do you think it's fine for the server and their employer to evade taxes while the dishwasher who isn't tipped can't?

Would you say a corporation that paid its dishwasher under the table and didn't pay payroll taxes was wrong? Servers not reporting cash tips is the exact same thing...

[rusty fender]

49. You're pitting the dishwasher against the waiter!

And then you defend taxing those at the very bottom!? What kind of progressive are you?

[Lee-Lee]

72. I'm saying why the double standard where some get treated different?

The tax levels are exactly where we set them. There isn't one tax rate for servers and one for dishwashers- but by encouraging and tolerating tax evasion on tips that is exactly what we create because then on paper they both make the same money and pay the same taxes but in reality the server makes twice as much or more.

If the server would be taxed too much- fix that in the law. Don't just tolerate a system that lets some workers evade taxes while others can't al lets the employers evade more than any single employee is. Because in the end it's that tipped employees employer who wins the most- they get away with paying crap wages AND evading their proper share of payroll taxes because of tips not being reported. That employer who pleads they can't pay a living wage to a server is evading taxes with every dollar tipped and not reported.

Of course i don't miss that it's the mostly attractive, mostly white women who are usually working in the front of the house that we tolerate this with, while more often it's the minority males, often immigrants, washing the dishes in back who get held to a totally different standard....

[HuckleB]

47. I would agree that this is a bottom of the barrel area for addressing tax evasion.

However, depending on where one works, tips can still put some people solidly in the middle class. I know it's not the majority, but... However, in this day and age, those people are usually not going to be tipped in cash, so they are not evading anything.

I, myself, made good money in construction to put myself through college, until I figured out I could make better money waiting tables, and then tending bar. And that is with being paid "under the table" at times for construction jobs.

[Bonx]

36. Tipping should be encouraged everywhere

I love the empowerment as a customer to directly reward good service.

[lame54]

44. it's the best way to get money directly into society - no middle men

[ProudToBeBlueInRhody]

48. I agree.

I also wouldn't care if the server got minimum wage or more, I'd still tip.

[Rex]

54. I see you never worked a job where servers were getting tips.

Please stick to whatever it is you DO know about, I have no idea what that is since you are obviously not in law enforcement either.

[Lee-Lee]

71. I've been a server and a bartender

My first day as a server when I was 17 the woman training me who had waited tables 30+ years was showing just how much I needed to report in tips for every hour I worked to make it come out to where my boss didn't have to increase my pay to meet minimum and I didn't get taxed on anything more than minimum- but to make sure and "mix it up" a dollar or two every day so the numbers didn't always look exactly the same.

When I tended bar on a good night we could easily walk with $500 in tips off the books for a Friday or Saturday when it was busy. Stupid drunk guys tip female bartenders really well.

I never really connected the dots of what was really going on then like I did later when I started working a job where tacking people's income mattered, and also when I realized that an employer having a tipped employee not report tips is the equivalent of paying them off the books to avoid paying payroll taxes properly.

It is what it is- illegal tax evasion on the part of the employer and employee.

[lame54]

43. That would need to be posted

[HuckleB]

45. That's not legal.

https://www.dol.gov/whd/regs/compliance/whdfs15.htm

[Agnosticsherbet]

52. ^this^

[Rex]

56. The place is probably avoiding paying taxes on tips by doing this.

Hopefully someone will report them.

[HuckleB]

57. If the waitress' story is true, something is definitely amiss.

It may even be more than tax evasion, however.

[Rex]

63. Depends on how many people work there for how many hours. How many servers.

Gross sales, gross amount of tips per year can be a huge amount of money. I hate fraud, but especially against low wager workers. I always tip, it is a gratuity.

[Skittles]

62. I'm already PAYING for the meal

I am TIPPING for the SERVICE

[HuckleB]

68. Huh?

[Skittles]

74. I am tipping for service

servers should keep their tips - I already paid the restaurant for the meal

[HuckleB]

79. Ok, then

[tenderfoot]

50. Yes. So I give tip separate from credit card charges.

Last edited Thu May 26, 2016, 01:22 AM - Edit history (1)

In other words. If I use a credit card to pay, I'll give cash to the server because they won't get the tip even if it's specified on the credit card. That's what I was told, so I tip in cash to make sure the server/driver/etc... gets their tip.

[Gomez163]

51. Mohels keep their tips.

[closeupready]

65. Snarf .... :D

[Depaysement]

53. Employer gets a tip credit

But only up to the minimum wage. Violation of the Federal Fair Labor Standards Act.

[Rex]

55. You can make a lot in tips or not much, depending on where you work and at what time.

It is illegal in some states.

[HuckleB]

58. Yeah, I made middle of the road tips as a waiter/bar back at a typical Italian restaurant.

Then the bartender hooked me up as his bar back at a resort on Friday nights. I made $120 or more in three hours there, and this was in the late '80s. Once I made my way to join the guy behind the bar, well, let's just say I got through college without any debt.

But I know I got lucky. The reality is different for so many.

[GulfCoast66]

59. In my perfect world

Wait staff would be paid a living wage and seen as professionals. And community colleges would have classes and certification programs in proper restaurant serving. Tips would be unnecessary as the cost of the food would pay the server.

Spending time in France changed my thinking in many ways.

[Bucky]

60. that's why I always tip in cash

[TheFrenchRazor]

61. Dominos i worked at kept carry out pizza tips put on credit card. think it's legal but BS. nt

[LaydeeBug]

66. I'd tell everybody there. Seriously. Let them be embarassed by their practice. nt

[lancer78]

67. Welcome!!

To every strip club on the planet.

[moriah]

69. I disagree with even tip sharing.

If I get excellent service, I want to reward THAT employee.

And I don't want them to suffer for another server's poor service at another table.

[Recursion]

73. Except the back of the house is a huge part of service and they get screwed

When I was waiting tables we always tipped out the kitchen staff 20% of our tips; it wasn't a policy or anything just something we decided because we wanted the back of the house to have an incentive to keep the customers happy like we did.