Tipping

[The Mance]

Can someone fill me in on one part of the issue - is all money made in tips accounted for and taxed just as the rest of the salary?

My wife's boss has to report a percentage of her sales, 8-10% I think, to account for tips.

[Starkess]

Can someone fill me in on one part of the issue - is all money made in tips accounted for and taxed just as the rest of the salary?

They are supposed to be, but as I understand it, it is very easy and common to under-report tips. I was told by someone who worked as a server that they always preferred getting cash tips to being tipped on the credit card, because the credit card tips are actually counted while the cash tips are estimated.

I could be wrong, though.

[Kelli Fury]

Everyone, given the opportunity, lies on their taxes. It depends how the business is run, some restaurants keep track of your tips and then you have to report them accurately. Otherwise, you estimate or play dumb when tax time comes.

[Tyrellius]

Mmm... perhaps America is the promised land after all...

Dude, its filter coffee, not proper coffee.

Ixnay on the tax talk. Chats is watching. :ninja:

[litechick]

In my first job you were supposed to count up and report your tips at the end of the shift but as long as you claimed at least $1/hour (the difference between server pay and minimum wage) nobody cared what the real number was and you were basically just volunteering to pay more taxes. There was no way for anyone to know how much you really made.

In Minnesota they had to pay tipped employees the full minimum wage and you were required to enter the total of your tips at the end of the shift. Management didn't care what that number was because it didn't affect them at all.

The IRS had a system of "allocated tips" which was an effort at taxing tipped income even if you didn't claim it. They would assume you made 8 or 9% of your sales in tips and add that number on to your wages on your W-2. You could protest by keeping your own tip log and swearing that you didn't make the 9% but it was far easier to just avoid allocated tips all together.

One of my fellow servers discovered that if you only claimed a tiny amount each shift (not more than $5) then allocated tips would not be added. If you claimed the full amount you made (let's say $25) then the IRS would assume you were lying and put on the allocated tips.

Since my actual tips averaged out far below 9%, it was easier to just slide under the radar than to fight with them about it. I never underreported my tips until they set up a system by which I would be shooting myself in the foot to report accurately.

I don't mind paying fair income tax on my earnings but the IRS system was such that they would say 'hey, we know you made at least a dollar on the pizza delivery' when in reality I made $.24. (At that time the big pizza deal $11.76 and I could usually get the change off of $12.)

Now that tips are much more widely added to a credit card, I assume that taxes are paid on those tips.

This all just goes back to my perennial argument that problem solving on the federal level is usually poor. They were trying to tax the big tips that people in nicer restaurants were getting but what they ended up with was giving some people half of their tips tax-free and others taxes on tips they didn't make.

There's just too much disparity in tipped positions to make broad governing laws. Since I come from the low-end greasy spoon and pizza joint end of the spectrum, my views are skewed by that. I have no problem giving $5 in a situation where I would only have made $2 but the ceiling just seems to keep going up and up.

That's why I say stick with 15%. Too much generosity causes problems as well as too little generosity.

[Guest Raidne]

Dude, its filter coffee, not proper coffee.

It's worse than that. None of the places that give you free coffee even put quality coffee in that filter.

[Blaine]

It's worse than that. None of the places that give you free coffee even put quality coffee in that filter.

And god knows how long it's been sitting there. The free refill might be the only way to guarantee some fresh shit gets made.

[AxelF]

Axel, I didn't call you by name or link to the thread specifically because you weren't involved over in this thread and I felt it was wrong to call you out individually.

However, you are the one who contributed the numbers which made my analysis possible. You gave an example of a slow week where an 8% cut was $630. So the entire tip pool was $7,875. If the servers got 70% that's $5,512.50. if there were 5 servers each working 40 hours that week, they each made $30/hour (in that slow week.)

I'm using the low end numbers and assuming a 40 hour week even though it would be unusual for a server or a busser to work 40 hours.

Where I'm at full time servers are usually around 45 hours a week, while bussers are closer to 35-40.

I would bet that the reason the tips are put in a big pool in the first place is so that they can be taxed and to eliminate the in-fighting of "you gave me the table of Japanese businessmen" "you got the good section" "you didn't ring up the first round of drinks on that table".

Pool tipping definitely doesn't work everywhere, but it does eliminate a lot of in-fighting in smaller restaurants.

And for the record, Japanese people are generally very generous and gracious guests. :)

My first server job was at a restaurant where they made a big deal about 'no tipping'. They were working the folksy angle where we give great service because we love the customer and take pride in our work.

That changed when Michigan decided that it was OK to pay servers below minimum wage in the expectation that they would make it up in tips. Then they had to try and retract decades' worth of no tipping promotion and suggest that customers should tip without seeming grabby.

They could have stuck to their principles and continued to pay minimum wage without tips but they chose to make more money by letting the customers pay. So here come the fights about who gets which section of the dining room, etc. Here comes the corruption of servers not claiming their tips for tax purposes.

That seems to be a problem with management more than the system of tipping. They made the choice not to continue the folksy theme and start asking for tips. Big changes like that in any industry are going to cause issues and need to be managed appropriately.

Seventh Pup put her finger on it in the first post. As soon as it stops being a gratuity and becomes an entitlement, things go downhill fast. This is evidenced within our online community by someone who makes $17/hour bussing tables and still feels he's getting the shaft.

Axel, I don't say this to call you out or make you seem like a bad person. You are just doing what everybody does, angling for the biggest piece of the pie. I'm complaining about a system in which a person may want to be a teacher but abandons that plan because he/she can make more money as a server.

The previous post that I made dealt with a specific issue: My supervisor gets tipped out when he's on vacation. This is something that's not supposed to happen, and there are laws about it. My feeling shafted (not just me, the entire waitstaff) is not about dollar amount, it's about fairness and the laws of California. It's not being a hyena and chomping after ever last percentage point.

For the most part I'm very happy with where I work. You did call me out when you incorrectly labeled me as a disgruntled busser with entitlement issues.

Servers shouldn't make less money because teachers are so poorly paid. Teachers should make more money because they're such a valuable asset to society. But that conversation is probably best saved for another thread.

My position is that tips are a fount of corruption. It ceases to be about what you are rewarded and becomes about what you are entitled to. The generosity of the diners gets turned into a big pile of money with everybody wrangling over it like hyenas.

Most people's definition of what is 'fair' is extremely flexible and usually results in whatever makes them the greatest amount of money.

It's just an alternative form of compensation. Sales people are entitled to their commissions. I'm entitled to my fair cut at the end of the week because I worked for it. That's how the pay structure in my industry is designed. Tipping doesn't cause corruption, poor systems of control and bad ethics cause corruption.

I also wanted to re-ask this question: Why shouldn't servers get over $30/hour?

[BigFatCoward]

Tell you what really fu(ks me off. Places where you definitely wouldn’t' tip i.e. a bar in the UK, which then makes you take a seat and have table service. I don’t want to sit down and wait 10 minutes between drinks, I want them now! And I want them often. And I don’t want to pay an extra 12.5% on a pint which you are already charging £4 for which I can buy in an off license in a can for about £1. Sometimes I think tramps in the park are the cleverest people in the world.

[litechick]

And for the record, Japanese people are generally very generous and gracious guests. :)

I was attempting to indicate wrangling over particular customer demographics without using a negative stereotype.

The previous post that I made dealt with a specific issue: My supervisor gets tipped out when he's on vacation. This is something that's not supposed to happen, and there are laws about it. My feeling shafted (not just me, the entire waitstaff) is not about dollar amount, it's about fairness and the laws of California. It's not being a hyena and chomping after ever last percentage point.

You weren't complaining on behalf of the person who fills in while the supervisor is away. Paid vacation is pretty meaningless if you lose $600 - $900 of your normal income when you take vacation. You were arguing for why you should get his money when he's gone and yes, you look like a hyena clawing for more of the big pile of money.

I'm entitled to my fair cut at the end of the week because I worked for it. That's how the pay structure in my industry is designed. Tipping doesn't cause corruption, poor systems of control and bad ethics cause corruption.

Once again, you are arguing what is 'fair' based on what benefits you most. Another definition of 'fair' would be that everyone in the restaurant gets a portion. Another definition of 'fair' would be that no one gets tips, everyone gets paid based on what they are worth to the employer.

Most professions don't get any kind of "bonus" which is equivalent to 200% of their wage.

Mostly you're just arguing that 'I didn't make the rules, I just benefit from them.' That's fine because it's true--you didn't make the rules--but if you are really concerned about what is fair you should be arguing why cooks, dishwashers and food prep people deserve a cut just as much as you.

I also wanted to re-ask this question: Why shouldn't servers get over $30/hour?

Based on the skill/education/talent it takes to wait tables, $30/hour is a big spike on the graph where pay is not commensurate. I don't base my tip on my suspicions of the server's hourly wage. I tip 15%.

I'm not proposing legislation, I'm expressing my opinion. There is a line to be crossed between a harmless gratuity and corruption and for me that line is at 15%.

My other opinions on tipping include--putting out a tip cup is not appropriate and it is never appropriate to directly ask for a tip by word or by holding out a hand.

[MercenaryChef]

litechick,

as a chef who is almost always underpaid compared to the people who sell and deliver my food and has at times been bitter about it i must say you are more so. your bitterness is staggering and entertaining.

to call the commonly accepted tipping system of america to be a 'font of corruption' makes me giggle. no, really. it does. executives from faulty and failing auto and financial institutions raking in millions in salaries and bonuses in my world is corruption.

would just paying a server a flat rate of $30 an hour with no tips ever offend your sensibilities so? if you were also paid such a wage for your trade would you be happier? or do you simply believe whatever you do for a living is so much more valuable, vital and needed and you are so amazingly bitter by not pulling in the wages of a busser, bartender or server?

[sologdin]

Servers shouldn't make less money because teachers are so poorly paid. Teachers should make more money because they're such a valuable asset to society. But that conversation is probably best saved for another thread.

nono. this is a fine place for that discussion.

but, yeah, the argument that restaurant professionals should be paid less than they might hypothetically be because teachers are paid a disproportionately low amount is like the teabagger argument that health care for prisoners should be abolished because there is no right to health care for law-abidng citizens, a right which their malfeasance of citizenship has obstructed. (of course! why not simply lower the universal standard by abolishing all health care--period--because the ideologically-preferred group doesn't have it, instead of raising the general standard by providing health care to everyone?)

education, for instance, was once based on a similar system in some universities, where instructors were paid by fees generated at attendance at lectures--poor attendance generated lower fees, predictably enough. i suspect that theological services are compensated at some points in history with a similar system of tipping (they may have called tithing--but same difference). soldiers, also, were often compensated by such performance-based incentives, to which they likely came to understand as an entitlement--it was called looting.

down my way, most routine functions around town are smoothed over by a fine tip (elsewhere, it may be fairly described as a bribe).

not so sure that performance incentives such as gratuities are a good thing, historically considered. perhaps restaurant professionals would be better off with representation that negotiated proper CBAs, excluding tips but incorporating living wage principles.

[litechick]

MC, :laugh: I have no problem with you deriving amusement at my bitterness. I will freely acknowledge that my bitterness is rooted in years of making $1.50 off a table of 4 for dinner. Add in all the $.22 coffee drinkers, $.24 for a pizza delivery, and getting stiffed outright on a regular basis and it's difficult for me to see someone bringing home $100 a night without getting my panties in a bunch.

Mostly it's the difference between the greasy spoon and the respectable restaurant. I've always worked serving poor people. The difference is stunning to me.

eta

executives from faulty and failing auto and financial institutions raking in millions in salaries and bonuses in my world is corruption.

I consider them equal. Corrupt is corrupt, no matter what the scale.

[sologdin]

Mostly it's the difference between the greasy spoon and the respectable restaurant. I've always worked serving poor people. The difference is stunning to me.

i'm amazed at the lack of proletarian solidarity illustrated by anecdotes such as this. why resent the workers who make a decent wage, rather than the employer who pays the crappy wage, or the society that tolerates poverty sufficiently to render a 25 cent tip standard in some venues? what possible principle, other than atomized individualism, causes this kind of support for a system contrary to one's own self-interest?

[MercenaryChef]

MC, :laugh: I have no problem with you deriving amusement at my bitterness. I will freely acknowledge that my bitterness is rooted in years of making $1.50 off a table of 4 for dinner. Add in all the $.22 coffee drinkers, $.24 for a pizza delivery, and getting stiffed outright on a regular basis and it's difficult for me to see someone bringing home $100 a night without getting my panties in a bunch.

Mostly it's the difference between the greasy spoon and the respectable restaurant. I've always worked serving poor people. The difference is stunning to me.

eta

I consider them equal. Corrupt is corrupt, no matter what the scale.

then wouldn't you think at this point in your life you would let that $0.22 tip on a cup of coffee from a poor person ages ago be something of the past? is there any reason to instead have such contempt and bitterness at so many people you do not know, work in a industry you scarcely understand or are part of and allow the industry be what it is? having not worked in a respectable highend restaurant your perception of the job and industry are tainted and i must say wrong.

i am sorry you worked in a shithole for shithead customers getting shit tips. that does not mean you need to shit upon the job that other people do.

[AxelF]

You weren't complaining on behalf of the person who fills in while the supervisor is away. Paid vacation is pretty meaningless if you lose $600 - $900 of your normal income when you take vacation. You were arguing for why you should get his money when he's gone and yes, you look like a hyena clawing for more of the big pile of money.

Once again, you are arguing what is 'fair' based on what benefits you most. Another definition of 'fair' would be that everyone in the restaurant gets a portion. Another definition of 'fair' would be that no one gets tips, everyone gets paid based on what they are worth to the employer.

Most professions don't get any kind of "bonus" which is equivalent to 200% of their wage.

Mostly you're just arguing that 'I didn't make the rules, I just benefit from them.' That's fine because it's true--you didn't make the rules--but if you are really concerned about what is fair you should be arguing why cooks, dishwashers and food prep people deserve a cut just as much as you.

I'm doing to try to make my point one last time and then drop it. Here's the California law:

http://www.dir.ca.gov/dlse/faq_tipsandgratutities.htm

4. Q. I work in a large restaurant as a waiter. My employer told me that I am required to share my tips with the busboy and the bartender. Am I obligated to do this?

A. Yes. According to a California court, Labor Code Section 351 allows involuntary tip pooling. Therefore, your employer can require that you share your tips with other staff that provide service in the restaurant. In this regard, it’s DLSE’s position that when a tip pooling arrangement if in effect, the tips are to be distributed among the employees who provide "direct table service." Such employees could conceivably include waiters and waitresses, busboys, bartenders, host/hostesses and maitre d’s. Employees who do not provide direct table service and who do not share in the tip pool include dishwashers, cooks, and chefs, except in restaurants where the chefs prepare the food at the patron’s table, in which case the chef may participate in the tip pool. Additionally, tip pooling cannot be used to compensate the owner(s), manager(s), or supervisor(s) of the business, even if these individuals should provide direct table service to a patron.

Once again, you are arguing what is 'fair' based on what benefits you most.

Yes I am. But it's also the law that is on my side. I don't care how much the restaurant pays him on his vacation. I care that he getting a share of the tip because he wasn't there and is entirely unable to "provide direct table service."

This is my argument: I believe that a law is being broken. I'm not happy about it.

My answer to your various versions of fairness I'm just going to answer with a question: Why not go to communism, and ensure that all jobs are compensated equally?

Based on the skill/education/talent it takes to wait tables, $30/hour is a big spike on the graph where pay is not commensurate. I don't base my tip on my suspicions of the server's hourly wage. I tip 15%.

I'm not proposing legislation, I'm expressing my opinion. There is a line to be crossed between a harmless gratuity and corruption and for me that line is at 15%.

There needs to be low education jobs out there that provide a good wage. This is a big portion of the middle class. There are welders, plumbers and many and many other people out there that have very little education. People say "anyone can bring food to a table, but I can't weld." That's simply not true. It not easy properly micro manage your job as a server and do a good job with it. Good servers absolutely have talent.

15% is very fair. Many people tip more these days, but I won't knock a solid 15 any day of the week.

My other opinions on tipping include--putting out a tip cup is not appropriate and it is never appropriate to directly ask for a tip by word or by holding out a hand.

Semi agree with the cup, completely agree with the hand. We're making progress.

MercenaryChef: Thanks for cooking. Chefs absolutely work their asses off and don't get enough appreciation for it. I wish you well in your plans to open your own restaurant.

[litechick]

that does not mean you need to shit upon the job that other people do.

I advocate a 15% tipping standard. As long as I'm not skimping on my tips to correct for my perception of overcompensation, who am I hurting?

Solo, 'fair' works both ways. Even if I only made $5/hour in tips, I was making more than the back of house staff and in my pizza delivery days I made more than the shift managers. It's just as legitimate to compare yourself to people who make less.

Clearly it was a living wage because I lived on it. I paid the rent and kept my decrepid old car working, I had food and electricity. I even made student loan payments. I have no argument to make for why I should have been paid more.

My thinking is lowest common denominator and yours is greatest common denominator. Surely fairness must lie somewhere in between?

Doesn't a person of my experience have the right to say "take your 15% and be grateful for it?" I'm not saying anyone should be stiffed or tipped in coins just because I was. I'm simply expressing my opinion that Axel should dial down his sense of entitlement and the general public should not contribute to tip inflation.

A percentage is a percentage. Serving a $200 meal is still going to pay 10xs as much as serving a $20 meal.

[litechick]

Axel, I don't want to argue anymore either. Thank you for acknowledging that we can share some common ground.

When you first presented your dilemma you said " I work at a restaurant where the tip is pooled. About 8% of the tip pool goes to the Maitre D, who’s also my supervisor/boss (In power only, not name. It’s illegal for supervisors to get tipped out in California, but that’s an entirely different issue). " Now obviously the issue goes deeper than you were able to go into in that thread but that's what I was basing my opinion on.

It's none of my business if you get $400 a week in tips and I would not reduce my tip based on my opinion that you are overcompensated. It's just that the amount you are paid reduces my sympathy for arguments that you should make more.

I hope you will consider that fair enough and we can both go about our business. I apologize for calling you a hyena, that was hyperbole.

[AxelF]

A percentage is a percentage. Serving a $200 meal is still going to pay 10xs as much as serving a $20 meal.

Yes, but it also has 1/10th the volume. I've had friends who serve at P.F. Changs and they can clear just as much if not more in tips on a Saturday as servers in a fine dining environment. It doesn't have to be a high end place to give a decent return.

Doesn't a person of my experience have the right to say "take your 15% and be grateful for it?"

I'm incredibly grateful. In a year and a half I'll have graduated college without taking on debt. I fully understand the opportunity I have, and how rare it is in my generation. The trade-off is that I don't get to enjoy my college weekends, because I'm literally always at work.

What you were saying that I was objecting to was all the stuff about corruption and general hating on the fact that some servers are paid well for their job. It's not a bad thing that careers exist that require little education to get started in but still offer a good wage.

[AxelF]

litechick:

Deal.