> From my perspective Instacart is stealing from its customers and workers by doing this.
This is 100% wage theft.
This is 100% wage theft.
The notion that you should overpay your own taxes to solve this is just bewildering.
It is standard (though not universal) practice for restaurant staff to pool and divide tips, which would appear to be the same thing from a defrauding-the-tipper perspective.
I'm more upset about this line from Instacart:
> We include tips in the calculation [of pay for deliveries] so that you can get a more accurate picture of what your earnings will be after completing a batch.
This is incredibly dishonest. They're arguing with a straight face that they're doing you a favor by smoothing your earnings from an unpredictable (for example) $8-$50 per hour down to a more reliable $8-$9 per hour.
This is actually the same argument the US government advances in favor of its sugar tariff. Sure, it raises the price of sugar by 200% on average, but it protects us from the awful unpredictability of the world sugar price.
First, restaurant staff always know ahead of time if they have to share tips.
And their hourly compensation, as ridiculously low as it may be, is never adjusted to compensate for higher than normal tips.
And, finally, in most restaurants the tip pool is also split up with bussers, bartenders, and hosts who don't always make tips of their own, but still contribute to the overall experience.
The third point is also correct, but in that case I think it supports the idea that the tipper is being defrauded when it happens.
I don't see how any shorter treatment would be a sufficient explanation.
I mean, imagine the scenario where the server just buys a line cook a drink to say thank you. Fraud!
That would be a case of the server getting the money and deciding to buy something for the cook.
Whereas in an actual tip-sharing restaurant, the server gets his share of the tip pool after the cook's share has already been taken out. He doesn't get a choice in the matter.
This is generally not what the people giving the tips have in mind.
Can you substantiate that in any way with any kind of evidence or is it a baseless claim?
If I tip someone well, it's because they've been incredibly attentive, kind, accommodating, etc. As much as possible, I want the tip to brighten their day. The effect is greatly diminished if that money is immediately divvied up amongst the other servers, making the difference to what they bring home negligible.
I've never worked as a server (though I did work at Chik-fil-A in highschool; employees are not allowed to accept tips there), and I did not realize that many restaurants are involved in the handling of tip money, rather than the tips going directly to the respective server.
So, no, that's not what I had in mind.
Why should anyone expect that sort of handling of tips? Not everyone has worked a job involving tips. I didn't. Should I have spontaneously asked one of my server friends "hey, btw, how are tips handled at your job? Like, I suspect that when I tip someone, you know, that money goes to them, because after all, I gave it to that person and not the restaurant and not anyone else, but just in case I'm mistaken, could you tell me what happens with the tip money after I leave it on the table? It's a question that's been gnawing at the back of my mind, and I just had to ask!"
My point being: unless you're a server at one of those restaurants, how would you know that your server doesn't get the tip you left for them? Could you substantiate such a claim?
This varies by state. Google "server wage" and your blood will boil. It's illegal in WA, though — servers make standard minimum wage and employers can't take servers' tips.
You're describing "server wage" laws, in which employers are free to steal tips up to the difference between real minimum wage and server wage per hour. In effect, servers in these states make above minimum wage during peak times and at most minimum wage off-peak. But they have to work off-peak or they don't get scheduled for peak hours.
In WA, this form of wage theft is illegal. Your statement, "minimum wage for servers is lower than for untipped workers" is false in Washington state, which is where the wage theft in TFA took place.
I never claimed "server wage" laws apply to this situation.
Also, the term "wage theft" seems like it doesn't apply to "server wage", because "server wage" is a construct specifically created by the law, whereas wage theft is something that's illegal.
Having seen the wrong people get rewarded bonuses, RSUs and raises all the time. You are just better off with a salary band/pay grade and give money uniformly across the band.
Ideally 'top performers' are supposed to be rewarded for 'top performance'. But in any subjective evaluation you are just dealing with cooked up documentation to prove a person did something, therefore deserves extra. Pretty much any and anyone's story can be twisted and narrated in a way that could sound positive or negative, to reward or punish respectively.
You are better off with a tip pool and paying it across the band.
https://www.fordfoundation.org/ideas/equals-change-blog/post...
The difference is that one allows the customer to dynamically adjust the wages in response to service; while in the other the company is pocketing that variance themselves, rather than passing it on to workers.
It’s simply fraud to pretend one situation is the other — there’s a distinct and meaningful difference in who pockets tip variance.
Yet somehow the system only ever seems to work in one direction. I once had to pay $20 after working an 8-hour shift before leaving home under threat of termination (right-to-work state) because of the two tables I had that night, one was a giant party that didn't tip me at all and the other ran out on his $20 meal while I was taking care of other duties in the back. Somehow my responsibility, of course.
Somehow my responsibility
After several more undoubtedly illegal maneuvers by a new manager to fire me and other waitstaff so that he could replace them with random girls he wanted to work for him so he could hit on them, being taken off payroll without clearing it with the senior manager, and afterwards being reduced to a single day a week on the slowest days, I quit.
I then had to leave the place I was living at two months later to a brand new city, contracted mononucleosis, and, not having any saved up money after quitting this job and unable to work due to being bedridden for 4-5 months, basically starved myself into extreme malnutrition other than the food I could steal and scavenge, surfing from couch to couch. So, essentially my worst fears about quitting my job over illegal practices were realized.
I could also tell you stories from other jobs about bosses pulling firearms on me, commanding me to do straight up illegal things like lie to the police, illegally withholding paychecks for entire staff for months at a time, illegal unpaid overtime, slashing wages between paychecks, working me into extreme injury from RSI and then subverting my ability to collect comp, firing me over "clerical errors" for trying to cancel a shift I didn't even mean to sign up for on a stupid new workforce app after my boss explicitly lying about my employment not being in jeopardy, etc, and all of the hardships I had to endure for leaving each of these jobs at my breaking point.
I am not sure why delivering 6 bags of groceries took over an hour in this case. It is entirely possible however that they made several other deliveries in between Wegmans and this location (making a $10 minimum for each). It is possible that this person actually made $50+ during this 69 minutes.
Source for more details of new policy: https://www.miamiherald.com/site-services/new-newsletters/bu...
So is not a typical scenario. I could put together an article just as misleading showing that Insticart pays a mint...
I don't like when people try to mislead me. Perhaps the fact that the tip is not going directly to the delivery person is offending some of your sensibilities. This is quite legal. Many states have done this for the past 80 years. I don't know how residents of states that practice this are surprised. All restaurants and other service industry locations you frequent do the same.
Being a food delivery person, a restaurant server or for that matter a McDonald's employee is not a skilled labor position and has never been a job someone should aspire to feed a family off of. We have people busting their butts, putting themselves through college, working their way up the ladder. We have 50k skilled labor jobs vacant in this country that pay a good wage and even offer training. People used to move across the country for these jobs. They used to leave their grandma's basement and go make something of themselves. Now we just have them making a bunch of noise over McDonald's not paying a Living Wage. Grow up. This world should not reward the lazy, it results in ever increasing mediocrity.
https://www.npr.org/sections/ed/2018/04/25/605092520/high-pa...
https://www.forbes.com/sites/kathycaprino/2018/08/30/dirties...
https://www.cnbc.com/2018/07/05/the-us-labor-shortage-is-rea...
https://www.google.com/search?q=the+us+has+vacant+skilled+la...
I worked these jobs while trying to support and educate myself so that I could get a better-paying job.
At the same time, if 6-8 hours a day of Instacart deliveries isn't enough to provide you with an apartment, tuition money and food & entertainment for a wife and two children, then it's a service that shouldn't exist and it is only propped up by investor cash.
Because that is what minimum wage was originally meant to provide for an individual in America, before nearly a century of propaganda and misdirection convinced people like you that someone on minimum wage is lazy and doesn't deserve enough money to eat healthily, rent a decent apartment and have enough cash for some entertainment, and generally live better than someone in a third-world country, much less afford something like an annual vacation or car payments.
So did many of us. People are not supposed to have to support a family as a primary earner on minimum wage and they never were. According to the 2013 Bureau of Labor Statistics, full time minimum wage earners earn over the poverty line by more than $3,000 per year. Two minimum wage earners can support a family of four and live above the poverty line. Avoiding poverty is all about choices.
>"At the same time, if 6-8 hours a day of Instacart deliveries isn't enough to provide you with an apartment, tuition money and food & entertainment for a wife and two children, then it's a service that shouldn't exist and it is only propped up by investor cash."
>"Because that is what minimum wage was originally meant to provide for an individual in America, before nearly a century of propaganda and misdirection convinced people like you that someone on minimum wage is lazy and doesn't deserve enough money to eat healthily, rent a decent apartment and have enough cash for some entertainment, and generally live better than someone in a third-world country, much less afford something like an annual vacation or car payments."
You have your facts quite wrong about the minimum wage and what it was originally meant to provide. The minimum wage was first enacted in 1938 by FDR. It paid a meager 25 cents per hour (this is $4 today when adjusted for inflation). So it has become substantially more generous as time has gone on. This is the opposite of your claim.
People in third-world countries earn less than a dollar a day. I'm sure they would love to earn even the 25 cents per hour that the original minimum wage paid.
Everyone I know that has been stuck in minimum wage jobs have definitely been lazy or made very poor choices (like stealing from their employer ETC.) in fact, only 3% of people above age 25 in the US make only the minimum wage.
Get the actual facts before making biased and factually incorrect claims (and cite sources when doing so). It really hurts your credibility to just make things up and try to sound like an expert so maybe no one will call you on it and you will appear to make a valid point.
Source: https://bebusinessed.com/history/history-of-minimum-wage/
In that case at least the staff get your tip. In this case Instacart is taking it for themselves.
Absolutely. Thought its definitely more pernicious to find out the restaurant owner was keeping the tips.
It's immoral as fuck to steal tips. I don't care if it's legal. If I'm a customer tipping the person a certain amount I want to make sure it's actually helping that person and not just lining the pockets of their employer, that's absurd.
Instacart is going to get fucked very quickly by the Washington AG. This is as bad as Walmart not paying employees for overtime.
in any case, this is really awful for the poor drivers. I had no idea.
They should have to pay back "the winnings" by 3x and fire the people involved.
So you have incentive to report 0.0 tips. But then our manager at PizzaHut let go everyone who reported 0.0 tips (when asked why, he said they called customers to confirm we did receive tips).
And that's not only PizzaHut, that's everyone doing that, at least in NJ.
That would make some sense even. If a server doesn't get tips, that could be a sign that they are a bad server.
(Not agreeing with wage / tip theft, of course, but, as an employer, you need to be able to believe your employees.)
The tipped minimum is usually something like $2 vs the $7 minimum wage (these numbers are probably off now that so many places have raised the minimum wage to $10 or $12).
Since in this instacart case they ended up paying out $.80 an hour it’s below even tipped minimum wage standards, although I assume there’s some dodge about claiming the employees are contractors to get around paying wages.
I think the question though is _why_ is that? If I steal $950 from someone then it's criminal, but if I refuse to pay them what I agreed then it's civil. It's an odd discrepancy IMO.
In this case they're doing something (questionably) legal but terrible.
There are plenty of cases out there of outright wage theft. I wouldn't have a problem with the people in charge of those decisions getting arrested.
Taking stuff away from people, though, is not necessarily theft, and also not necessarily criminal. If you accidentally take someone else's property because you confused it with your own, for example, that's not criminal, but the other party still has a civil claim against you (namely, to be given back their property).
On the other hand, if you intentionally mislead someone into providing you with some service or product, promising to pay them for it, even though you never intended to pay, that constitutes fraud and is very much criminal.
Generally, it's criminal if it's in the interest of the public and civil if it is primarily in the interest of some party. Not paying some debt because you actually have doubts that you have to pay, or due to an honest mistake is not really something that affects anyone else. Someone intentionally causing situatons where others can't rely on them fulfilling their legal oblications can erode trust in a society, therefore it is in the public interest to prevent that. The boundaries can be fuzzy, but wage theft can very much be criminal.
Why do you keep saying things to this affect?
A company stiffing a supplier is going to rapidly find themselves without suppliers, or the supplier can afford to / accounts for being stiffed on some orders.
An independent contractor who works for one, or maybe two very similar types of, company is very much like an employee in every way that matters to that individual “independent” contractor, and literally nothing like a B2B supplier.
Additionally, you seem preoccupied with existing legislation as though it has some higher virtue, whereas in reality the law can be, and frequently is, unjust and absurd.
I'd be surprised if calling something a "tip" makes it legally obligated to go to a contractor. I'm sure their lawyers are very aware of the law on this. As someone else said, there is almost certainly a binding arbitration clause. This removes the possibility of individual or class-action lawsuits.
edit: The abuse of the term "independent contractor" is just one of many examples of how labor law enforcement has become lax in the last several decades. How many people on this site aren't in management and work unpaid overtime?
I don't think "oh the tip went to the contractor we just lowered their wages by the same amount" sounds convincing in a court room.
In fact, I would hesitate to say that the lawyers for most startups have any clue what they're doing, as most seem to be in it to play startup lawyer rather than provide necessary legal advice to their client/employer.
But it does not remove the ability of the court to overrule the clause itself. So someone could still sue Instacart knowing that it will be thrown out if the court decides to enforce the clause.
In my life experience, these things are almost always up in the air until a judge says otherwise.
Getting to the contractor thing, the most workers can really do is file IRS Form SS-8 and see if the IRS will release them of some of their tax obligations. Other than that, there's really not that much enforcement.
Source: I was a misclassified contractor in 2017 while working in WA state. IRS forgave some of my tax burden, but Labor/Industries and Employment Security are absolutely useless if you don't have a literal Form W2 to use.
Which they will. There's been a few recent cases that have made mandatory arbitration clauses more-or-less bulletproof.
That is textbook fraud.
Any dispute will go to a monkey court instead.
No, they aren't; binding arbitration is a venue for resolving disputes about the application of laws, it doesn't supersede the laws, and manifest disregard for the law is one of the few reasons for courts setting aside a binding arbitration decision.
Thought experiment: could Instacart assault, kidnap, or murder a delivery driver and claim that arbitration is the only venue for redress?
It depends on the agreement between Instacart and delivery staff.
I don't know how the contractor status of Instacart drivers affects this. They're not technically employees. But the verbiage of "Tip" in the UI is a strong signal to the customer that the money is directly credited to the driver. It should bear no relation to their fee from Instacart.
This is wage theft. A horrible agreement doesn't make it right, even if it is legal.
Does the independent contractor bring more than their personal labor?
Do they hire crew of their own or are they bringing other employees?
Or, are they bringing heavy or costly specialized equipment?
Are they an established business, working without your direction or control?
Are they free from your supervision, direction or control?
Is the individual’s business different and separate from your own?
Is the individual’s service “outside the usual course of business,” or in other words, does the contractor do something different from what you do?
Is the individual’s service being performed “outside of all of the places of business,” or in other words, does the contractor perform the service away from where you perform your services?
Is the individual contractually obligated to pay costs affiliated with the location from where the work is controlled (usually its headquarters)?
Does the individual have an established independent business that existed before you brought them on – OR – does the individual have a principal place of business that qualifies for an IRS business deduction?
Do you have evidence to demonstrate that the individual has an established business?
Does the individual have a principal place of business that qualifies for an IRS business deduction? Do you have evidence to demonstrate it?
Is the individual responsible for filing a schedule of expenses with the IRS, such as would be part of a business tax return?
Does the individual have all required registrations and licenses for their business?
Does the individual maintain his/her own set of books and records that reflect all income and expenses of the business?
This question is for construction contractors only: Is the individual a properly registered contractor?
Note that this is not an "Answer 'yes' to any question to be considered a Contractor", it's a "totality" thing. (https://www.lni.wa.gov/IPUB/101-063-000.pdf)
"I subcontracted some work to a guy who has a contractor’s registration with L&I. Doesn’t that mean he’s not my employee?"
Not necessarily. L&I auditors look at “direction or control” and other factors described on the previous pages. Because he is a construction contractor, all seven parts of RCW 51.08.181 must be met.
And so on...
This is a very common setup in other pay structures as well, such as commissioned sales where you are paid a "draw" (such as minimum wage) and you don't paid get any commission until your commissions exceed minimum wage.
What's more, the tip money did go directly to the driver; Instacart just decided to pay less.
It's a pretty inhumane thing to do but on the face of it I don't see how it's wage theft. Welcome to the gig economy.
Here's some more information about how it works legally: https://corporate.findlaw.com/human-resources/legal-consider...