A picture circulating online shows what appears to be a note left for a server at a restaurant in which the customer rants about why they decided not to leave a tip.
Although the source of the letter has not been confirmed or reported, the picture has angered people all over, with many saying that a liberal-minded person had to be responsible for writing it.
“I do not tip anywhere because the law governing tipping causes pay inequality between servers and kitchen staff,” wrote the anonymous tipper. “My meal was made possible by an entire team of kitchen staff, servers, managers, and the establishment itself. Therefore, everyone involved should be paid appropriately out of the cost of the product I purchase. I find it unreasonable that only servers have legal rights to earn tips. Therefore, I do not tip and ask that the establishment raises the cost of food and drinks to pay everyone appropriately for their work. Tipping also encourages both customers and servers to stereotype and discriminate. Appropriate salary for servers should be the responsibility of the establishment and not the mood, or habit, or any random decisions of the customers.”
Sites like Tell Me Now have started to speculate who the letter could be from, and, according to them, it has to have been written by a liberal.
“It’s one thing to have certain beliefs when it comes to equality and what not, but to punish someone who did a good job for you because you think someone else is getting screwed is ridiculous,” writes the website. “However it falls right in line with the liberal/progressive mentality, which is bring everyone down to the lowest common denominator so that nobody feels like they’ve been treated unfairly. These people are going to be the death of this nation.”
The picture has now gone viral, and even though nobody seems to know for sure if it’s even real, it has undeniably sparked a heated debate on income inequality and wages in America.
Do these companies avoid higher taxes by pretending these are tips?Many waitstaff are working for you for free if you do not tip. The $2.xx/hr they are ‘paid’ is withheld to pay their assumed taxes. So their net check is $0. If you are not tipping, shame on you.
I don’t think either of you understand how the tip credit and tip make up works.
Currently the federal minimum wage is $7.25. Some states have a higher minimum wage and whatever minimum wage rate is higher is the one that prevails.
The federal minimum wage for tipped employees is $2.13 for those who meet the criteria and again, this may be higher in some states.
http://www.dol.gov/whd/state/tipped.htm
If the server does not earn enough in tips to bring them up to the prevailing minimum wage, the employer has to make up the difference – called the “tip make up”. No server is “legally” being paid below the federal or the prevailing state minimum wage. Both the tipped minimum wage of $2.13 per hour and the tip make up amount are subject to all employment taxes, i.e. the employer’s share of FICA – Social Security and Medicare taxes.
The employer can use tips received by the server to count toward making up the difference between the minimum tip wage and the minimum wage, the so called “tip credit” and that is also subject to the employer’s share of FICA – Social Security and Medicare taxes. What the employer does get to do is not pay the employer’s share of the FICA taxes on the amount the server receives in tips in excess over the federal minimum wage and that is done via a credit after having paid them, on the business’s tax return, the IRC 45B credit. The employee however has to report and federal and state income taxes and FICA taxes on all the tips they receive. The reasoning behind this is that tips the server receives over and above what brings the server up to minimum wage is not income to the restaurant as they 100% belong to the server nor are they wages the restaurant is paying to the server but it is income (taxable income) that you are paying to the server.
Where there is a written tip pooling arrangement, the employer can only take as a tip credit toward reaching the minimum wage, the amount the server actually received in tips, after the pooling. The server only pays taxes on the amount they actually receive in tips after any pooling amount is subtracted.
http://www.dol.gov/whd/regs/compliance/whdfs15.htm
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Credit-for-Portion-of-Employer-Social-Security-Paid-with-Respect-to-Employee-Cash-Tips-IRC-45-B-Credit
Servers who earn tips generally get SCROOOOOD by the Feds on their taxes with the tip credit.
No, not really. As I explained above the server has to pay taxes including the employee’s share of FICA on both their hourly wages and all the tips they actually received. Now if the restaurant doesn’t have a POS system or a system where the server can record the tips they received and the employer withholds taxes on them via payroll, and if they are honest and claim on their personal tax return, all the cash tips they actually received, they may end up owing taxes at the end of the year. Of course depending on how diligent the restaurant is in making the servers report all cash tips, in reality a fair percentage of cash tips get unreported or under reported by the servers.
Most people don’t realize how low and tenuous a wait staffs income is. The wait staff pays the difference if you make a mistake on a bill too. Most people assume that the restaurant/bar eats the loss…..Yup. The place I worked for in the mid 80's was the same. Except the cheapskate that owned the place deducted part of our tips from our paychecks because it was now "taxable". He only hired single mothers because he could bully them. He cussed me when I quit and said I was the reason he never hired married women. LOL
It is true that a restaurant can take certain deductions from wages paid, they cannot take deductions if those deduction take the employee below the minimum wage so what you described, although it happens, is illegal:
c Where deductions for walk-outs, breakage, or cash register shortages reduce the employee’s wages below the minimum wage, such deductions are illegal. Where a tipped employee is paid $2.13 per hour in direct (or cash) wages and the employer claims the maximum tip credit of $5.12 per hour, no such deductions can be made without reducing the employee below the minimum wage (even where the employee receives more than $5.12 per hour in tips).
Where a tipped employee is required to contribute to a tip pool that includes employees who do not customarily and regularly receive tips, the employee is owed all tips he or she contributed to the pool and the full $7.25 minimum wage.
And
Tips are the property of the employee. The employer is prohibited from using an employee’s tips for any reason other than as a credit against its minimum wage obligation to the employee (“tip credit”) or in furtherance of a valid tip pool. Only tips actually received by the employee may be counted in determining whether the employee is a tipped employee and in applying the tip credit.
FWIW, an employer cannot take any deductions from the employee’s pay, outside of statutory deductions, i.e. tax withholding or deductions for benefits, child support orders or legal garnishments (which are subject to their own limitations), any deductions that are for the employer’s benefit, such as for uniforms or breakages, etc. if that deduction takes the employee below the minimum wage.
Some companies also like to hold “ransom” the employees’ final paycheck if they quit or are terminated until they return company issued property such as company issued laptops, cell phones, sales kits, etc., while a lot of employers do this, this is also highly illegal. DOL regs state that all wages earned by the employee have to be paid, made available in full without restriction on the regularly scheduled pay date and in some states such as California, all wages owed, including earned unused vacation and or commissions have to be paid on the date of termination.
Some states also have laws prohibiting any deductions from pay other than statutory deductions, any deduction that is for the employer’s benefit, absent a written signed agreement and some states do not even allow any non-statutory deductions.
All that being said; I always tip servers at sit down restaurants 15% to 20% (similarly also others like hair stylists, etc.). Only if the server is surly or outright rude or grossly incompetent would I consider or have I tipped less or not tipped at all. I will not punish the server if my meal comes out the kitchen late or if it is not cooked to my liking or if it is obvious that they have way too many tables, i.e. if it is obviously something out of their control and they do all they can to remedy it. I might let them know I am not happy about the quality of the meal and ask them to pass on my complaint to the cook or the management or ask them to have the manager come to my table, if they do so in a pleasant and professional manner, I’m not going to punish them by not tipping at all.
Being a server in a restaurant is really hard work in most cases and I really appreciate it and having worked in retail for many years, I also understand how rude and nasty some people can be and what they often have to put up with so I go out of my way to not be one of those people.
While some think that servers should just be paid a higher minimum wage and not be any paid tips, I think it is a great way to incentivize good service. Now one might make the argument that some servers are only worth minimum wage, say the gal or guy who works at Dennys or IHop or your local greasy spoon diner who tosses a menu at you and then comes back a half hour later to take your order and acts as if she’s doing you a big favor for doing so….yea, at those places I might only tip 10% or if the service is really bad and surely, less or not at all, but that is the exception rather than the rule.
People also need to understand that if there was no tipping and servers were paid more, the cost of restaurant meals would go up as restaurant profit margins are not all that high and you’d end up paying the same as you would now plus a 20% tip or more and might not get the same level of service as there would be no incentive for the servers to please you. Come to think of it, there are probably a lot of workers who should get a low or even below minimum wage and depend on voluntary tips for good or excellent service. Personally, I’d start with the DMV and members of Congress – LOL!
We eat at several restaurants on a regular basis. We usually ask if a particular waitress is working that day and ask to be seated in her section. We tip generously to a great wait staff.
FWIW, many years ago (early ‘80’s) I was friends with a gal who worked at a very high end, very expensive restaurant in Baltimore. At the time she was making, including tips about 50k a year, huge money back then. But she had been working there for many years and had many repeat customers who asked to be seated at one of her tables. But this was not the type of restaurant where you just went to grab a quick meal; this place was a local institution that prided itself on their service as much as their fine food and a place where you would partake of several courses and wine parings, spending several hours for dinner and lingering over dessert and cocktails. It was the go to restaurant were business men went to celebrate landing the big deal, where young men took their girlfriends to pop the big question, where married couples went to celebrate the 50th wedding anniversary.
My husband was working for a local construction company and the owner, who was a 1st generation Italian, treated my husband and I to a night out for dinner on him to celebrate our anniversary and as way of paying my husband a well deserved bonus.
My husband’s boss made a reservation for us at his favorite Italian restaurant in Baltimore’s Little Italy. But this was not one of the better known and more popular places but he told us, this was the “real deal”; a very small and intimate sort of place, probably only about 8 tables and a relatively small menu. He made the reservation for us and told them to put the bill for whatever we wanted on his personal account, he also asked for his favorite waiter – Carmine.
It was one of the most amazing meals I’ve ever had, perfectly prepared and presented and Carmine was just as amazing. He was knew the menu inside and out and took the time to explain not only what the dishes were but exactly how they were prepared which was a big help as the menu was in Italian :) , and he made suggestions and suggestions on the wines, everything was beyond perfect and he made my husband and I feel like royalty. He was friendly and polite without being overly friendly or overly “familiar” or overbearing or intrusive; when he served us he did it perfectly, our plates seemed to magically appear before us as if he was not even there and our empty plates also disappeared with us barely noticing and the next course arrived nearly simultaneously, and he never interrupted our conversation but he was there in an instant as soon as we needed anything (and anyone who has been to a really great restaurant knows what I mean about that type and level of service.)
When our meal was finished we were not sure what to do about the tip, after all this was on my husband’s boss’s dime but he had specially asked for this waiter, one of only three, so we tipped him 25% which we thought was generous. When my husband’s boss got the bill he told my husband that he typically tipped him 35%. Boy did we feel bad.
Sadly I just learned this restaurant along with several other traditional family owned Italian restaurants closed last year. : (
http://www.bizjournals.com/baltimore/blog/charm-city-flavor/2013/09/caesars-den-closes-doors-in-little.html
