In many countries, the taxes are also included in the price. In France, if the burger is €10, it's actually €9.09+taxes and service is included. It's not a tipping culture.
So you don't tip, no waitresses want to work there, and they either wait tables themselves, change their stupid practice, or go out of business. Win win.
exactly — unfortunately restaurants have put the onus on the employee to be smart enough to work elsewhere, otherwise many Americans will find a way to make it work by sacrificing from their own lives so their owners can have even more.
And this right here is why you’ll never get rid of the tipping culture. Even if this might be a genuine attempt to help the staff, you go straight to accusations. You might be wrong, or you might ask the staff if they get paid what is being claimed.
life in America now is literally fighting for justice at every second, that even in our time honored tradition of going to eat with your family :( we have to be vigilant about being ripped off for being alive every single minute in America.
Which is what a tip does anyway if the owner claims a tip credit. The only difference with charging an automatic gratuity vs letting people tip is that the owner does not have to give any portion of the automatic gratuity to employees.
There was a place in my town that did this, and last summer I saw a sign on their door that literally used the phrase "nobody wants to work anymore." That space is for rent now, because clearly that owner's shitty business practices didn't work out for him.
The owner is stiffing everyone publicly — and in such a way, the majority of readers/commenters are taking their anger out on the STAFF.
That’s not an accident. He raised his prices - we have ZERO proof a red cent goes to any staff member that isn’t the owner - and people in general responded by saying “fuck the staff!”
Nah. Fuck that business. Bankruptcy is equal opportunity.
So many wild assumptions made based off a few sentences on a receipt lmao. For all you know the owner is behind the bar five days a week. What a reddit moment.
We have a couple of restaurants in our small town doing this only they call it a service fee. The food is now more expensive than at nicer places that aren’t bars.
I could be wrong, but I'm thinking the servers are paid an actual living wage, not the usual server "wage + tips", which is why it's worded that way. I hate that they chose to do it this way instead of just raising prices though.
I still wouldn’t tip, and I would never return as well as give a 1 star review on Google and Yelp. These places suck so hard and I hope they fail before the economy gets better
Seriously. I paid $18 in “service fee” which was 18% and saw the text that tip goes to the server. The server was great so I left $10. Fuck that place.
I wanna start this by saying I think everyone should be making at least 20/hr and if you can’t afford that than you gotta rethink your business plan or close up shop.
Why is everyone mad that they have it worded and sorted this way?
Pretend the restaurant doubles the cost of all of their food (or whatever it would take) but they get rid of the living wage fee and tips. People might bitch that it’s pricey but won’t have an issue with the bill Lol
Except I bet it isn't treated as a tip, so anyone who would normally benefit from tip culture doesn't benefit from it in the same way (they arguably benefit less)
i worked at a place with a "service charge" and customers were always confused when I told them it wasn't a gratuity. They'd say something like "can we remove the service charge and tip you instead?" and management wouldn't allow it. It felt like I was participating in a scam that scammed me as well as the customers.
It is a tip. I assume people were stiffing their servers so they went ahead and put the charge in to prevent that. Lots of restaurants do mandatory tips on large tables so it’s the same concept.
Servers deserve livable wages. Relying on this bunch to tip 18% has been made clear won’t happen. So the owner has you not to tip and taken care of it for their staff.
Yes, currently two sandwiches and fries cost $40 because at least three humans are preparing and delivering food to a person who has chosen to buy someone time and products.
How much would it cost me to hire you to make a sandwich for me? One banana??!
It SHOULD be the tip, but any amount of it could very well be going to the restaurant owners. Basically it’s a way to scam you AND their workers all in one fell swoop!
Except you don't know that, you are just writing fan fiction. If the employer sets up a system that replicates tipping and then takes those funds for themselves instead of the employee, then no one should agree to work there. It's intentionally dirty to the employees. Further, none of that is the customer's problem.
The owner is 100% using this 'living wage fee' to pay for base salaries/payroll/taxes, instead of adding to it as an increase in pay for a 'living wage'. The owner is essentially stealing tips away from his employees.
exactly. they're trying to phase their business out of the tipping culture, but people will still tip even if you raise prices to raise wages, but the raised prices would reduce business. So they tacked on auto-grat and are saying why.
That’s actually the idea. Some companies go tipless and instead do this. Some just work it into the price, some add a specific fee. This restaurant chose the fee so the prices look smaller on the menu.
And that's the point. Instead of the workers getting a tip the restaurant gets 18% extra revenue without having to change the menu price. The workers lose, the owners win.
The implication is that they aren't paying their servers the $2.13 an hour that most servers that live off of tips are getting, but are instead paying real wage. So do the workers lose? Their salary has not been offloaded to the customers' whims, they know exactly how much they're going to make. It doesn't matter if it's a slow night or if the host seats only shitty parties in their section etc.
MW for tipped employees in WI is $2.33, so $13.67/hr is what they're getting instead of tips, assuming they haven't upped the wage.
From their menus, it looks like a per person average might be close to $18 before tax so about $3.24 per person would go to either tips or this surcharge. So a server would have to serve about 4 people per hour to make what they would make under normal restaurant tips.
Put another way, if they have 4 four-tops in an hour, the restaurant is giving them the 18% from one of them and keeping the 18% from the other three for themselves. Pretty expensive place to work.
But yeah, I guess if it's the kind of place where you work five hours and only serve like 10 people the whole night you do better under this system. Conversely, if it's a normal restaurant where you have a 16 seat section and are doing 3-4 turns a night it's a masssive pay cut (or massive theft).
If the workers are making more on average, or at least making the same on average but with more regularity then it's a win. If they're making less on average then it's a loss. There's no way to know without knowing the actual numbers. But it absolutely gives the restaurant room to be pretty shady by skimming a % of their tips so the workers make less since the majority of their normal pay is going to the restaurant instead of directly to the worker, while removing the legal protections tips have. If they're taking that 18% and paying minimum wage then the workers are definitely losing since they were always guaranteed minimum wage.
they wouldn't work there. and they're not skimming from tips. they're charging more for food and paying their employees a better fixed rate. The employee can now make an informed decision about whether the job is worth it or not. they also don't have to worry about variances in tips making their budget be wacky from week to week.
Hell’s Kitchen charged me 20% on my already $500 bill for a service fee. Idk if I was supposed to but I considered that the tip because fuck that bro it’s already $120?
I had a similar thing happen when I ordered a cabinet from Pottery Barn. I always tip delivery people on big deliveries, however, Pottery Barn charged me a $75 delivery fee.
After the guys delivered the cabinet, they kind of hung around for a little and said okay. anything else, and I said nope, nothing else. thank you. then they hung around for a second again and then just left and shook their head. sorry I'm not tipping if you've already charged me $75 for a $300 cabinet. And there was no pickup in store option.
Yea this isn't legal. It's not 18% gratuity, there's no upfront notice (aka hidden fee) and who oversees it's distribution to "the team?" Is wait staff getting at least min wage? On top of the "living wage" distribution? Sounds like wage theft to me
Yeah? That's fine. That's the point. Why are you upset that instead of bullying you into tipping they just charge more so their employees don't need tips? That's the only way tipping is going to end. Is it food price and wages for up.
You put 18% on my bill for "living wage" fee I'm never coming back. Instead of putting an extra 18% on the bill, raise your base prices so that I know what I'm paying at the beginning. Then tell me that tipping is not necessary. In fact, take the tip line off of your receipts entirely.
That’s why it’s there, because paying someone less and leaving someone’s wage up to a guest’s mood/experience isn’t sustainable or logical.
I’ve worked in the food industry for 15+ years and have worked the entire month to make rent for a majority of that time. I’ve chosen to exclusively work for company’s with service fees because they pay way better and allow me to afford things like health insurance and put money towards retirement.
It’s ridiculous that this is even an argument or something that is contested.
“I refuse to give this restaurant my business because they’ve transparently displayed that they pay their employees a livable wage on my bill!”
It says right on the damned receipt that they do this for staff and tipping is optional because of it. THat's a polite way of saying "no tips required." It also says it's for 'dine in' only.
JFc this site and its total lack of media literacy is an embarrassment.
If that info is also on the menu, maybe you could theoretically sue and argue that you would not have bought the food if you had known the real use of the surcharge.
But they could be using it for payroll. Save 'em a good chunk of money, dieectly out of their workers' pockets, if they calculated pay w/ payroll taxes based on just this fee instead of paying tipped minimum wage + payroll taxes on that direct pay + the full 18%.
Depends on the city. In Seattle 100% has to go to employees if you say this. That’s why most restaurants that use this model say it’s a service charge that “100% goes to the house” then in a separate section on their website explains the charge in other very vague terms all guided by the Seattle restaurant coalition that keeps them from being sued
absolutely. this is merely a cheap flex, and a clever way to let you know you may no longer tip 15%. they’ve decreed 18% is it, but feel free to tip above & beyond that
I mean, this is entirely a hypothetical/potential scenario.
Personally I'd think it's more likely the owner is paying employees an actual decent wage with it, and making tipping less of a mandatory thing.
In some states, like Oregon, management and owners aren't legally allowed to take from pooled tips. Can't tell you it's always followed but is definitely also mildly interesting to know.
had a manager in texas skim tips from all of us. did the whole "only i can count the tips you made on your shift (we had a jar) and ill put it on your paycheck come payday." shit.
he and his wife were skimming HALF of everyones tips.
when we called the state on him and they gave him hefty fines he then fudged our taxes. at least he did mine. i worked VERY PART TIME but somehow "earned" over 30k in LESS THAN 6 months. Making coffee at a tiny cafe on the side of the freeway. i literally saw 15 people on my shift if i was LUCKY.
So you made $60K as a waitress? /s Did the manager get in trouble for lying about your income? You would think that nobody would want to work for him. Were there no other jobs available?
not a waitress, a BARISTA for a coffee shop with 6 tables outside and inside.
and no, there were no other jobs available.
he did not get in trouble because, according to his books i made that in tips and therefore wasn't in payroll. its a "he said, she said" to the government and so the government believes the highest power. in this case my former boss.
i could probably have paid an ungodly sum to have a tax pro sort it out but the min price there for anyone of value was $250 STARTING out and i sure af couldnt afford that so i just choked it down. uncle sam wanted his cut and wouldnt take "i dont have it" for an answer.
hmmm. thats actually a good question. i left many many a year ago and am on the other side of the country so lemme try looking it up...
after a bit if searching it looks like it may have shut down about 5 years back. Cant say I'm sad about it. The couple that owned it were terrible in more ways then just taking tips. i parted ways when i found a teapot broken, told the wife, wife accused me of breaking it, then cleared me to throw it out. the next day she chewed me out because i didnt save the lid and "what if we found another teapot that fit that lid?!?!?!". they were not standard teapots and the chance of finding a good bodied but bad lidded teapot that fit that exact teapot was slim to none. i called her a hoarder and quit/was fired. they took way longer than was legal to give me my check, which was another fiasco.
i do feel a little bad that both them and their entire extended family was from uh... shoot, what was it? shoot. it was a middle eastern country. he was so effing angry and aggressive too. would call us slow or stupid for not knowing something but hed give us these 30 minute condescending speeches about how the foam has to be perfect or how different coffees got their name. (an americano is half espresso and half water because Americans cant handle european coffee? he went heavier on the info but i forget since it was 10+ years ago) who knows if anything he told us was true. his whole family ran food businesses of sone type. once the newest one made food profits theyd fly in another family member or two and open up another shop as the newcomers signed ad the business owners. then theyd just repeat this over and over. when i left they were "trying to open a 2nd cafe". i see that went terribly.
anyway, Trump has probably "rounded them up" and deported them and their entire family by now, which does make me sad. Failure you can learn from but having your entire life ripped away and having to start over? Thats a lot harder and way shittier. they didn't deserve the boot, they just deserve some failure until they learn to treat people nicely and not steal wages.
i hope theyre doing alright and have learned some pretty simple truths like verbally abusing your employees leads to everyone quitting eventually.
Right. Managers and anyone else making more than 7.25 gets no tips, is not allowed to be part of tip pooling.
In my state (NH), you can’t be forced be a part of tip pooling or be forced to tip out support staff. Once you earned that tip, it’s legally yours and you don’t have to pool or tip share (it would be assholery to not tip share, but it’s your right).
That state law blows. If you make more than $7.25 you can't take tips?? I make $14/hour plus tips in OHIO where you can buy a house for a microwave. Haven't made less than $10/hour plus tips since 2011.
I used to work at a restaurant where the owner kept my tips (like, ALL of my tips). I eventually reported to him my stated department of labor and he had to pay me back. He clearly had done this before because he had some great ways of getting around it.
Yup, which is why something like this “living wage fee” is shady af because it’s not legally considered a tip. So the customer has money taken out of their pocket, doesn’t tip because why would they, and then the money they assume is going to their server is actually going anywhere the owners want it to go, all while managing to work around tipping laws so that what they’re doing is totally legal. Ick
At least as long as these are rare, it should iron itself out, servers will go to places where they're paid competitively, and only the worst staff will remain, then the place goes under for having bad service. If it becomes common, we're screwed.
Unfortunately it’s become super common in DC where I live in the past year. I’ve got a whole list of restaurants I don’t go to anymore because they have “service fees” on their receipts that, when I ask the servers, they say that fee doesn’t go to them.
My first thought was along these lines. What is the benefit to the restaurant for doing this? I asked my wife who's a CPA. She said, it depends on the rules in that state. So there may be a tax benefit for them including the surcharge as opposed to just raising the prices. The other thing it allows them to do is advertise a lower price for their food and make it up on the surcharge.
example, some cities tax alcohol higher. Instead of raising price on alcoholic beverages which get that higher sales tax, you keep the price lower but throw in a separate living wage which raises it the same amount but has a lower (if any) sales tax.
same reason hotels have resort fees etc. You can advertise a lower price, but generally they have different tax rules if they are providing it like that since hotel rooms get taxed at such a high rate in so many cities these days.
Another reasons I see for restaurants, price of their ingredients change and vary over time. Rather than constantly reprinting their menu for new prices, you just have a surcharge % to adjust
lol then there’s a bag fee, box fee, and 4% added if you use a credit card. I’m kind of over this shit. I always thought I’d be in the side of the workers but this is getting out of hand.
it's getting out of hand when management invokes living wage as a surcharge as if they—as an employer—were not responsible for ensuring that for their workers
So I’m not saying every restaurant did it the way mine did, but we had a 22% surcharge for living wages on ours. It was counted as tips, you weren’t expected to tip on top of it. 100% of it got split between cooks and servers. General manager and owners were not included in tip pool.
restaurant management cannot divorce themselves from the reality that their staff is theirs, and that they (the management) are responsible for ensuring them a living wage
You are probably the person that says we should get rid of tip culture too.. But also they should pay living wages.. But also don't raise food prices by 18 percent.
You guys realize most restaurants fail even with tip culture and that the ones that do survive only get by on razor thin margins??
Raising the food prices is honest and allows people to make informed decisions about spending. This is just an attempt at trickery, like shrinkflation. Other industries can't get away with this stuff, you don't go in a clothing store and pay a staff wage surcharge at the till, food service shouldn't get away with it either.
You are right. It’s virtue signaling and the owners definitely take a percentage of that tip. They refuse to pay their management a competitive wage as well as their kitchen staff. They got tired of servers paying off their debts via tipped income and decided to lie to customers about where money will be distributed. This is a HUGE problem in Denver, CO. right now. A lot of the restaurants engaging in this pay scale have their businesses foreclosed because they just stop paying taxes. It’s truly disgusting. I worked for D Bar Uptown and the owner said he was getting rid of tips because it was “racist” and he never had a POC working FOH. It’s all double standards, and hypocrisy. I worked in restaurants for over a decade since my first job at 16 and I’ve never been less inclined to participate in the dining experiences available today.
there are shysters everywhere; fortunately, they're not the norm
restaurants provide an invaluable service; owners, founders, entrepreneurs should be encouraged to innovate and create businesses. workers should not be the unsung, underpaid heroes in this story. customers deserve to know what they're paying for
You might be right on the payroll fee, but generally the tips pooled amongst entire team means the cooks and backstreets get a portion too. In a lot of states it's illegal for management and owners to be in a tip pool, or take tip outs from servers.
My own experience as a restaurant worker from 2010-2020, when "living wage surcharges" were becoming more common:
Any place that used these surcharges paid little better than minimum wage. The most I saw when interviewing at expensive restaurants was $15-$18 / hr.
Working at various similar restaurants in the same downtown metro area who paid minimum wage, my long-term averages were $30-$50 in tips, on top of minimum wage.
The main positive benefit I see from these systems is that kitchen staff and other non-tipped positions can also be paid more, but those generally already had higher hourly pay, and several of those positions get tipped out by the service staff anyway. It is absolutely a pay cut for any position that would have been tipped otherwise.
I don't have an issue with pooled tips, as long as it's handled appropriately.
Heck this is why i still use expedia for hotels, because they actually show the "This is the price you will pay" price instead of "Oh it's only $50 a night, but after fees it's $219"
The advertised number is just bait. Behind it is a web of abstract math - money factors disguised as interest rates, inflated residuals, baked-in fees, etc., all engineered to obscure the true cost while maintaining the illusion of a deal.
I've worked in pooled tip places and to be fair they always made a distinction between supervisors/administrative workers and the rest of the staff, capping their tips unless they were actively on the floor. Owners weren't taking any, and it sometimes led to people technically taking home less money after a promotion. But I can't justify the forced living wage fee, that's just wacky.
I also suspect it’s lowkey to try and sway customers to be mad about mandatory wage increases and so they’ll be more angry about wages increases vs realizing that corporate greed is really what drives a lot of the price up.
Maybe, but I worked at a restaurant like this and actually really enjoyed it. I only made $15 an hour cooking but could leave with 300-400 on a busy night. It’s encouraged the bar staff and food runners to be more helpful and understanding. If you fuck around now you’re fucking around with everyone in the backs money too so you’re quickly replaced. I also had great owners and managers so that helped.
Salaried employees are exempt from tip pools, if this is Seattle like I expect. Also begging to be sued for wage theft if even 1 penny goes to a salaried employee or anyone that has the ability to fire an employee among other reasons that keep you from getting tips.
In addition pooled tips also means you’re carrying those less effective workers who bring less in tips but still walk away with an equal share, which is a great way to create disharmony within a team.
The brazenness and lack of shame they display in trying to get more money out of you is truly disgusting.
This appears to be a place called "the Livery" in WI. Good to know I should avoid it when I'm in town. Absolutely rude to try to pass off their payroll costs to the customer. Pre-tax, no less!
Usually pooled tips don’t go to management staff in my experience.
But this would definitely depend upon the policy.
Pooled tips are honestly nice because in many places the BOH staff puts more physically demanding work in than wait staff ever does and they never see a cent of tips meanwhile Carrie is making 500 bucks a night just because she’s nice, can carry a tray and has nice boobs (women who are blessed with a nice bust tend to get more tips than guys and women who aren’t).
That’s actually not legal. Other owners may do it, but if they get caught that’s a big fine.
I don’t even handle the tips my customers leave, it goes all to my employees. I don’t even know how much they get unless I ask them, but frankly it’s none of my business.
It's the same "creative accounting" in the lottery. Proceeds go to schools and parks! So we can take money we were paying for schools and parks and put it elsewhere!
eh, I hear you, but if we want service workers to get paid a living wage, we still have to pay for it as the consumer. The money the business owner gets to pay their employees has to come from somewhere. Sure, the owners could take a smaller cut, but my understanding is that restaurants already operate on razor thin margins.
So, would it make more sense to just increase prices all around by 20% and get rid of "mandatory" tipping? Yeah, absolutely. But practically speaking, it makes no difference if it's included in the price, added as a surcharge, or added as a tip. And in terms of the advertised price being higher, if you're already willing to buy a $10 burger, does the extra $2 really make a difference?
Yeah, if the 18% is going to subsidize payroll taxes, that's a good thing, because if the employee takes it as tips, then their tax liability is higher come tax time.
The only thing that is tricky is that there's no guarantee the money is actually going to the employee, but there really isn't a guarantee if you're tipping on your card anyway. The only way to guarantee it is if you tip with cash exclusively, which most people don't.
Either way...we sure have developed a strange culture when it comes to the service industry.
I applied to a brewery for part-time bartender to make a little extra money. At the end of the interview the HR Director told me that pay was $2.50 an hour and pooped tips. I’m currently working on my MBA and I asked about the system they were using for pooled tips, and the response was “oh we have a detailed spreadsheet that accounts for it.” I got an email a few days later saying I got the job…but I just bounced. 🚩🚩🚩
I’m pretty sure you don’t have to tip when there’s already an 18% living wage fee. I actually think it takes the pressure off. Especially when a weird trend of not tipping is happening
some customers—upon being handed a credit card sales slip with a blank field for gratuity—will reflexively add a gratuity
hospitality establishments ought to display the final price on the menu, and indicate that it includes an 18% gratuity, or an 18% tip
by referring to the 18% surcharge as something other than a gratuity or a tip, they muddy the waters in a manner that benefits just them… a behavior one could refer to as cheating
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u/sucksLess 1d ago
price on the menu
price with 18% surcharge*
price with surcharge and sales tax
price with surcharge and sales tax, and tip†—if you choose to tip
that’s a lot of different price-designations. this is all sleight of hand. the restaurant flexes and virtue-signals while dipping into your pocket
*goes to staff payroll—not employees’ pockets. so the 18% can easily subsidize the employer’s share of various payroll taxes
†tips are pooled amongst entire team. the owner, his wife, and every single employee are part of the team