“No tax on tips” is an industry plant
newyorker.com
newyorker.com
Of course, you're still expected to leave a tip and suggested minimum is now 20%, plus even McDonalds is charging $15 for a 4 oz burger, so I rarely go out to eat at places that expect a tip anymore.
I'm not sure why they specifically should be tax exempt though. Cash tips often were, practically speaking, so a lot of tax evasion was happening, but it still seems odd to single them out.
https://www.latimes.com/archives/la-xpm-1988-11-01-mn-628-st...
> California doesn't have a special minimum wage for tipped professions?
The difference is where the money comes from: directly from employer vs directly from customer. But in all cases *the sum of these sources* must equal the minimum wage.
If the employee is not taking home at least minimum wage, then the employer is guilty of wage theft.
If the employer does not make at least $x towards an employee's wage, the employer is guilty of wage theft.
So instead, read the CA's (and AK, MN, MT, NV, OR, WA) rule as "tips may not be credited towards an employee's salary".
[0] https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
See what your server's reaction is if you tell them to report this wage theft.
They won't. They'll just suggest you tip them to compensate.
So instead of trying to tell me how fruitless this is and just give up to endless arguments, maybe report wage theft if you know about it. You can do it anonymously. You can do it for people that tell you. It's not a hopeless situation. Hell, lawyers take payment after the case is won, and you know if your wage is being stolen then others are too
And it's not like restaurant owners don't talk among themselves. Getting blackballed isn't great.
Bottom line is that you seem to think that there's zero reason why people are shy about reporting wage theft. And yet so many people don't want to do it. Maybe try a little humility on and accept that maybe there are reasons you don't know about or don't understand. It's very easy to tell people what they should be doing when you don't have to walk in their shoes.
I’m sympathetic to the arguments, but this sounds like scaremongering.
If you have evidence of it, please post.
There are so many restaurants everywhere, just leave the worst place off your resume. I can’t see owners coordinating if there’s no online platform for it.
> but retaliation is a thing, and is hard -- and expensive -- to prove.
It also is not expensive. At least not more than the theft. Lawyers working on wage theft generally take payment as part of the recovery. You pay out of the winnings, not up front.
Honestly, a big part of the problem is that many people have defeatist attitudes. A lot of people don't even bother to make a report after they leave. It is hard to retaliate when you've left.
You're not wrong that, in states with a lower tipped minimum, the tips act as a credit. But you're ignoring what the power imbalance in those situations can do to an employee, and you're ignoring the fact that in states like that, tips paid by customers are effectively subsidizing the employer out of paying minimum wage.
And I don't think that it would be surprising that wage theft is more common in places where the tipped minimum is set lower than the general minimum.
As a customer, I would much rather know that the employer is paying the full fair minimum wage regardless, and any tip I leave will always be on top of that. I don't want to be paying a part of the employee's wage that the employer would otherwise be paying.
> tips paid by customers are effectively subsidizing the employer out of paying minimum wage.
But I'm making sure that the conversation is clear that anyone not making minimum wage is suffering from wage theft. We have to identify the right problem if we want to fix it.
> As a customer, I would much rather know that the employer is paying the full fair minimum wage regardless
> I don't want to be paying a part of the employee's wage that the employer would otherwise be paying.
Sixteen states use the federal tipped minimum wage of $2.13: Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, and Wyoming.
> Seven states do not have a separate, lower minimum wage for tipped employees
There's a subtle but important difference in wording. There is no "lower minimum wage" for any employee anywhere. The rule is that employers may credit tips towards pay, up to a certain amount. And they can never credit 100% of pay.
So tipped employees should always earn: minimum_wage + stochastic_number
"lower minimum wage for tipped employees" is incorrect and is just the interpretation of "minimum employer must pay after applying tip credits". Subtle, but very different things! If you aren't earning at least minimum wage (tips inclusive), then your experiencing wage theft.
The DOL page[0] specifically says "Maximum Tip Credit Against Minimum Wage" and that's how the column "Minimum Cash Wage" is calculated, but under no circumstances[1] can the employer pay less than "Minimum Cash Wage". Anything less is illegal. ALSO under no circumstances[1] may an employee earn less than minimum wage.
[0] https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
[1] We're ignoring allowed deductions like lodging and meal
If it's the same in both cases, that's his point.
That's the point that all the parents above them are concerned with. So a semantic argument is needlessly pedantic.
Minimum wage. You can credit that with tips in some places, but you also have to credit the customer in those cases (not legally, but they aren't coming if you don't), so the net is the same.
Not to mention that in a state where there is no lower tipped-wage minimum, all tips go to the employees directly. In a state where the tipped minimum is lower, tips effectively go to the employer for the amount between the tipped minimum and regular minimum, as that's a cost the employer would otherwise have to pay.
Waffle house then opened an "inquiry" since if they weren't making minimum wage through tips, it must have been because their service was poor (of course it's actually because it was a weekday graveyard shift).
They got their additional $30 or whatever and were then let go.
So while I agree it is illegal to pay less than federal minimum wage, even with tips, but in practice the system is built such that for poor workers in poor areas, they will frequently make less than minimum wage.
Although probably much less nowadays since the $7.25 is still the federal minimum wage and it's pretty hard to find people desperate enough to work for that little money since recent inflation.
This isn't to say that I don't tip when not required to or that I only tip people I think are being underpaid, but ... things have gotten a little out of control. If I feel like tipping, I'll tip. I do not need a prompt suggesting anything when it's not coming out of the employee's takehome pay.
I hate to say it but I think some government regulation is required here.
If the restaurant is going to be shady and unilaterally introduce confusion to an already confusing norm, then I consider that norm voided and fair game for any interpretation.
> I live in California and this isn't true here
To be clear:
- Any worker that is not making *at least the state's minimum wage* (including tips) is suffering from wage theft. (with the exception of Georgia (WTF))
- Any worker not receiving a positive valued check are suffering from wage theft
- Tips only count as a credit and no state lets tips act as a 100% credit to the wage[1]. Credits may be amortized across "workweek" pay.
[0] https://news.ycombinator.com/item?id=44751537 (sources linked here)
[1] Federal only lets max credit of 70% of min wage. Some states go up to ~75% of min wage, but their minimum wage is higher than federal.
"Many restaurant owners illegally don't actually follow this law". "Report them to the DOL". "I don't want to do that. You should tip me to make sure I have a livable wage instead."
Don't confuse "logical" with "correct" or even make the false notion that there is a "correct" reaction. The "right" reaction depends on your goals, short term and long term.
But defeatist attitude results in a tragedy of the commons situation. It's social debt. Think of it like a mess. Messes are easiest to clean up right after they occur. But as time goes on, it becomes harder to clean. If everyone is doing their share of their work messes are very manageable. But if people don't do their share, then it must be picked up by everyone else, right? I think most of us have been in a situation where we've had to clean up "everybody's" mess (if you haven't, you might be that asshole leaving that mess). The defeatist attitude is like that person grumbling "it's too big of a mess, we'll never clean it up." Well... not with that attitude. If the mess needs to be cleaned up, it needs to be cleaned up. Either you help or you make it worse for everyone else.
Jeez, where is this? According to the famous McCheapest map the most expensive Big Mac in America is about 8 bucks. Have prices really shot up that much recently?
What got lost in an edit was that's for the combo with a bag ($0.25 extra).
Don't tip, especially 20%, for over the counter service. That is ridiculous.
>I'm not sure why they specifically should be tax exempt though. Cash tips often were, practically speaking, so a lot of tax evasion was happening, but it still seems odd to single them out.
It's just a gimmick to get votes. The theory is that poor people tend to be the ones that work these jobs, they need a break, and it's not a policy that would cost very much anyway. There is a cap on the tips and most cash tips were going unreported anyway.
A living wage in most population centers in CA is nearly $30/hr.
I have to ask what is causing what's considered a living wage to increase so rapidly, because it appears to be increasing far faster than the national inflation rate.
It sounds like a wage-price spiral, though I'm not aware of anyone claiming we're in one.
Granted, like a lot of things in economics, you can only tell in hindsight long after it has played out and the data is collected and analyzed, so it is also possible that the spiral is already underway and we just don't know it yet.
servers are treated like absolute garbage
And either way, if you wanted to believe the merit-based approach, you're talking maybe the top 5% of servers anywhere making "good" money. Wage theft in the industry is colossal.
I will be pleasantly surprised if the removal of tax on tips does absolutely anything to move the needle for the bottom 95% of servers.
The restaurant industry has been lobbying for this to further avoid the pressure of raising wages and the complication of reporting taxes — the reasoning is out there in the open.
This is the sort of modern shell game where corporate interests further obscure costs to trick the lower class into thinking it's a good deal. It's akin to the math on maintenance Uber drivers tend to fail to do when they're calculating their wages... they're absolutely getting hosed and most of them don't even understand how.
Waiters in the US make significantly more than their British and French counterparts, due to tipping: the US minimum wage is lower than the British and French minimum wages, and despite American waiters being paid at an even lower hourly rate than the US minimum wage, they end up making more due to tips, performing the same job.
The upper 25% of waiters in the US make over $40k a year. Your 95% estimate is very off base.
> waiters make more in America
By apparently 1.5k€ per year? Not a strong argument as it stands and we haven't even begun talking about the lifestyle and workplace differences between the two countries.
And that's before even factoring in the tax benefits, which is exactly what this article is about! No tax on tips means nearly all of that income is untaxed. French waiters pay 11% taxes, and British ones are in a 20% tax bracket. The difference widens even further.
Tips allow American waiters to earn more, and no tax on tips makes them take home even more. Hand-wringing about how the American system pays less than the European one is innumerate.
no tax on tips reduces pressure for employers to support higher minimum wages, that's why the restaurant lobby supports it
No tax on tips will positively affect American waiter wages at basically every level. It's pretty simple math.
You can make that argument about literally anything that reduces the tax burden on people who's primary income is useful income.
Workers who earn too little to pay taxes (A) will not benefit from a tax cut (B).
But workers who earn enough (not A) may still not benefit (not B), for example because their employer indirectly pockets the difference. That is actually being argued in the article.
So this is indeed the appropriate way of formulating the statement: at least 40% of workers will demonstrably not benefit from this.
Some tipped workers, like bartenders, can make more in tips than a junior software engineer lol. Less taxes definitely helps their cause.
If you are concerned with indirect effects, there's quite a few pros and cons that you could extrapolate from the no tax on tips policy. These arguments are far less compelling in general.
> Some tipped workers, like bartenders, can make more in tips than a junior software engineer lol. Less taxes definitely helps their cause.
neat, but you can only deduct up to $25k and the benefits phase out if you earn more than $150k (single filers).
If someone earned $125k salary + $25k in tips. Their taxable income would decrease by about $6k (or $500/mo, 4% overall).
I just turned on reader mode in Firefox and then refreshed the page and got the article. I'm surprised how often it works. It often doesn't but sometimes it does.
That seems correct. It's a pretty useless statement, but it is true.
The whole "I get taxed whether you tip me or not", "I have to pay to serve you if you don't tip"? No, not so much. If you can show (there's even a hugely burdensome IRS form that might take as much as 3-4 minutes a month for cash tips) that you earned less than that 8% average, then that's what you get taxed. But most servers don't want to fill that form out, because they get ... rather more than that, and are being undertaxed already.
More carve-outs complicating the tax code and pandering to specific constituents is a bad thing.
It reminds me of listening to a story of how day care business owner-operators are not required by law to contribute to Social Security, don’t, and are then screwed at the end of their life because they don’t have any way to retire.
Hopefully this becomes another straw that will eventually break the camels back and we get rid of tipping all together. Every restaurant in the world does not need tips to survive, except for the ones in the US.
Nah. Profitability for the business would be higher without tips. I take x% of gross income as profit. No tips means I can charge the customer more, which means a higher gross income, which means more profit. When tipping is involved, the money slips through without allowing the business to take its cut. Good for the server, but not good for the business.
However, as theoretically great as it sounds, you are ultimately beholden to what the customer wants. There is good reason why every restaurant that has tried a "no tips" policy has failed. Nobody shows up to dine. They go somewhere else where they can tip instead. Regular people actually enjoy tipping, as hard as it may be to believe for those who are staring at screens rather than enjoying the ambiance of a restaurant.
Also consider that customers will get sticker shock: even though they are ultimately paying the same price, seeing 20% higher prices on the menu will make them spend less. Yes, it's dumb, but human psychology is dumb, so there we are.
(Folks in Europe are used to the listed price being what they pay. In the US businesses don't generally list tax-included prices, but businesses that do include tax in their prices end up looking -- in the eyes of customers -- as more expensive than those that don't, even when the final prices are identical.)
It's not dumb; it's just that paying that 20% to the waiter is a lot easier to stomach than a 20% increase to the restaurant owner.
Payroll taxes in most jurisdictions are based on wages, not profitability of the business. A non-issue, well, except maybe for the server who has grown accustomed to making $50/hr. No tips and those days are long gone.
> Some restaurants have tried this out, and it's backfired.
Yup. Hard to win customers when tipping is part of the experience. I mean, it can be done where it isn't — McDonalds survives, thrives even, without tips — but if you are trying to run the type of restaurant where the customer comes to tip it doesn't fly. You have to give the customer what they want at the end of the day, else they'll go somewhere else. This is the challenge businesses face.
> Restaurants already run on very thin margins
Exactly, and if you increase the volume then the product of the margin gets bigger. Remember, Walmart and your average restaurant have the same profit margin! Walmart's advantage is that they handle way more money, so the total amount that margin represents is huge. If a restaurant can also handle more money...
> seeing 20% higher prices on the menu will make them spend less.
Even just, say, 1% higher still means more cashflow through the business, which means more cash to take a cut from. You are right that the full 20% would unlikely ever be realized, certainly not right away, but it doesn't need to be to still be advantageous. But until you figure out how to convince the customer to change their preferences about tipping, good luck.
There is absolutely no obligation to leave a tip. One only does so because they want to!
Where I live, many restaurants have the "required 18% gratuity" thing and ask that you not tip beyond that. Maybe this is a PNW hippie specific thing, but a movement against tipping exists and is being ran by some good, successful, restaurants.
Try increasing the posted food prices by 18%, or add a "18% owner boat fund", instead and see what happens. You won't last the week before you are bankrupt. The amount is exactly the same, so from a financial point of view there is absolutely no difference, but the experience of "helping out the little guy" is lost, and that will chase clientele away. For all the huffing and puffing we hear, actions speak louder than words. The reality is that customers like tipping!
I see it as a way that owners can avoid paying the relevant taxes for employing their staff and instead offload part of that payment onto the customers. The arbitrariness of it also annoys me - why just waiting staff?
I'm in the UK, so we mainly have service charges added to the bill to take the place of tips which is a much better system. I also like the Japanese culture of non-tipping and that they may get offended by customers leaving tips.
Of all the ways people choose to spend their money, tipping is a strange one to hate. It is not like Taylor Swift pointlessly flying around the world to the detriment of the environment, and thus everyone. It seems pretty foolish, I get that, but fools and their money are to be easily parted. What is the harm in their foolish fun?
> I see it as a way that owners can avoid paying the relevant taxes for employing their staff
Assuming staff will be paid more. That is unlikely in a lot of cases.
Granted, if you are in one of the states that allows tip credits that would be more true given that they would be legally required to move up to minimum wage irrespective of tips, but many states require that staff be paid at least the full minimum wage already and tipping is still just as common in those places.
It is not like McDonalds is paying their staff more without tips (above excepted). Like the death of manufacturing saw an end to high paying manufacturing jobs, the end of tipping would see an end to the $50/hr. waitress. It wouldn't be supplanted.
> why just waiting staff?
You can tip whomever you want — or not tip at all. But in most cases only the business is liable, so it is the only entity you need to please. When alcohol is involved, however, the server becomes liable, so it is in your interest to grease those wheels else get cut off. It is not like anyone tips the waiting staff at McDonald's. It traditionally has only been a custom where alcohol is found for that reason.
But it wasn't long before people realized that they enjoy it! It gives them the thrill of "sticking it to the man", or "helping out the little guy", or in some cases "Look at me. I can pay you more than your own boss can! Aren't I great?". In fact, they liked it so much they have started tipping in other places.
> I'm in the UK, so we mainly have service charges added to the bill to take the place of tips which is a much better system.
That sounds like a tip by another name. How is that a better system? It seems exactly the same (except the customer can't easily opt out of it). Many places in the US do that too (oft known as an auto-gratuity), especially for large parties in restaurants, for what it is worth.
> I also like the Japanese culture of non-tipping and that they may get offended by customers leaving tips.
Whereas on the other side of the pond the opposite is true. I picked up some shifts as a server a while back for what is a long story, but suffice to say money wasn't my motivation. I was collecting a developer's paycheck at the same time, meaning, as I am sure you can math, I was making way more than 99% of the people I was serving, so I felt pretty strange and pathetic taking their "pity money", so I tried rejecting them.
That didn't end well. Customers started getting quite upset with me. In one case I bypassed the tip screen on the credit card machine and the customer not fully paying attention didn't notice and walked out without tipping. Five minutes later he comes stomping back in and gave me an earful about not taking his tip while shoving cash in my face.
I used to think like you, but once I actually experienced it, it became abundantly clear that the customers are there to tip in the kind of establishment that is built on that type of business. It is part of the experience.
Those sitting at home staring at a screen might not understand the appeal, but they aren't the customer.
I don't like the idea that a restaurant's service depends on tipping - I'd rather the restaurant ensures that their staff do their job well and not leave it up to me to determine whether the waiting staff should be paid more or less than the average amount (assuming I even know what the average amount should be).
> You can tip whomever you want — or not tip at all
In theory yes, but society has certain expectations (c.f. Mr Pink in Reservoir Dogs). I don't want to be considered rude or mean just because I'm used to tipping a certain amount and it's below what other people tip - I'm going out for a meal, not playing some ridiculous game. Also, it's not expected for people to tip other staff such as the dish-washer, the farm-hand who raised some of the produce, the accountant, the painter who redecorated a couple of years ago etc. You're being ridiculous if you think that kind of behaviour is common.
Service charges are very much like tips by another name except that there's no guessing about the amount (it's there on the menu before you order and on the bill at the end) and it doesn't bypass tax laws so the restaurant can't really game the system. The customer can't easily opt out which is why it's printed on the menus and if you think it's too much, then you go elsewhere (e.g. get a takeaway instead).
Your difficulty with not accepting tips was due to the strange U.S. tipping culture - I've seen some places just have a charity jar/box for unwanted tips.
(I have experienced U.S. tipping culture on a few holidays and it just seems bizarre and a bit backwards).
Reservoir Dogs tip scene: https://www.youtube.com/watch?v=M4sTSIYzDIk
Businesses are going to work hard to blur the line between a tip and a required payment so that they can call their income a tip while customers think they're obligated to pay it.
This makes your order sit longer until someone decides to do it, perhaps because there's a penalty from the company for declining jobs, and the driver is willing to lose money to remain in good standing
Surely you already know that choosing things doesn't always simplify down to a single dimension. Instead, there are multiple factors that lead people to deliberately choose options that have negatives.
E.g. Why do people continue to use Ryanair airlines if they always nickel & dime customers and treat them like shit?!? Because the mistreatment by Ryanair is still better than driving for 6 hours or paying more $$$ for Air France or KLM.
Likewise, why do customers continue playing along with the tips/bribery/ransom game in the delivery app?!? Because the user-hostile app is still better than rounding up the small toddlers and infant into the car, fasten the car seat, and drive to the restaurant.
Life doesn't always provide unambiguous good options. Instead, you choose the "least bad" from the list of bad options.
we can literally get the state to say it is illegal for the point of sale system to have that or sell that to merchants
we can tie it to business codes that dictate which type of business it is to payment processors
control behavior by regulating the intermediary
the beauty of this philosophy is that it works under any system of government: don’t worry about the rights afforded to merchants or individuals, don’t burden them with the law at all, only intermediaries!
poof, tips at the point of sale system before receiving service disappears as fast as it came, short Square (now Block)
we can go deeper too
The tips on the apps nominally do go entirely to the driver.
Why, where else would they take the food? Leave in at the patio? Drop it on the lawn?
There's quite a lot of places people will think to leave food if they're rushing to pick up another job.
The app has different options for meeting in the lobby / come to my unit and I always select my unit, but whatever, I get why they might not do that.
Drivers can tell if you don’t tip and all of the experienced ones will decline your order.
Though these apps have done a lot of work to conceal the amount the driver actually gets until delivery is completed.
Americans need to remove the idea of tipping. It's archaic, because it was originally there for an aristocratic/wealthy patron to show off their status to the lowly servants of an establishment.
Just charge a price, and have it include the full service fee required for providing the service.
It doesn't help with situations where drivers are multi-apping (accepting orders across multiple apps and juggling them). The drivers don't even know you have priority.
edit: and in the US where you can definitely see the tip up front, you will almost always find that the order will get picked up quicker if you increase the tip by the equivalent of the priority fee. But you may well get stuck with a delivery before yours.
It's wild because this happens maybe 10-15% of the time for me when I don't choose priority, but it's around 80% when I do.
I ignore the option now and just bump the tip if I want a chance of better service.
IMHO, this isn't a new phenomenon. Close to 18 years ago, I lived in a city with a popular pizza spot that was about a 10 minute walk away. Normally I'd walk, but having a newborn make that challenging, so I'd get delivery.
Typically, the delivery would take 60+ minutes on a busy night, but after a few consecutive Fridays of a decent tip for the order, the pizza would arrive "burn your fingers" in about 20 minutes.
Markets have prices.
Open markets have transparent pricing for efficient discovery.
Concealed prices in deniable auctions are closer to dark pools than open markets.
Are there still customers giving tips as "a reward for good service"?
I'm trying to imagine a curve representing the distribution of "quality of service".
What shape is the curve, and where on it would a 20% tip and a 0% tip be?
Sad if this is no longer the case.
In the UK at least (and the rest of Europe too, as far as I can tell), this is still very much the case. The curve varies with the individuals tipping. I would be quite happy to give 20% if the service was outstanding. I’m equally happy to not tip at all if the service was very poor.
Honestly, this seems good overall; there's no more sense in having low-paid waitstaff hanging around hoping to get a customer table that will tip than in having a restaurant owner keep the restaurant open while paying the staff a reasonable hourly wage.
I can confirm in Italy almost no one will even accept a tip. (Taxi drivers, wait-staff, hotel staff)
Yes, that is the basic tip if you expect to come back to that restaurant and get an upgraded welcome.
But even with no tip, being a regular counts - tip or no tip, you are good business and worth cultivating.
Except for the very pervasive 12.5% "discretionary" service charge the you would have to request to be removed. Which is a genius piece of social engineering.
Yes.
OT but the kind of bank that charges £25 for something like that is almost certainly robbing you blind on the exchange rate, too.
Are there customers giving tips for other reasons? Any examples?
Lots of places will now ask for tips before the food comes out even in person now - lunch sandwich shops, etc. I don't think they'd be unprofessional enough to mess up your order if you didn't tip, but maybe they'll be happier with you or be more generous if you tip now too.
> 0% tip is risking stuff
There are more numbers between zero and good! Markets depend on information. Price has been information for centuries.
The insurance industry has actuarial lessons for managing risk. The delivery app industry has a range of policy measures for managing delivery performance, including but not limited to refunds and blacklisting workers from serving specific clients.
(Incidentally, this is also one of the reasons why the costs of eating out in the US and seem so much lower. Most people who come from non-tipping cultures don’t understand that Americans actually tend to pay significantly more than sticker price, especially after you include taxes, which are also often excluded).
https://plus.maths.org/content/information-surprise
> Shannon wanted to measure the amount of information you could transmit via various media. There are many ways of sending messages: you could produce smoke signals, use Morse code, the telephone, or (in today's world) send an email. To treat them all on equal terms, Shannon decided to forget about exactly how each of these methods transmits a message and simply thought of them as ways of producing strings of symbols. How do you measure the information contained in such a string?
Sorry, this is definitely not the case. Many times the worker is doing exactly what is needed and nothing more (eg: pour a beer in a glass, handing me a pizza). Why would I be considered an asshole if I didn't tip? That is ridiculous.
As other people have said, tipping in the US has really become obnoxious. I definitely tip while seated for a meal, but asking for a tip to hand me a cup of coffee, pour a beer, etc only makes the system worse.
Tipping isn't just a social thing, there are real physical punishments for not doing it!
LLM, please create a techno-finance solution to this social problem, inspired by historical precedent for defending royalty and other high-value individuals against food poisoning.
Non-technical solution: move to a location with high social trust, e.g. neighbors and workers know and support each other socially and economically.
Wait, what??? Do you honestly believe the worker pours a cup of coffee in a to-go cup, hands it to me, checks the receipt for a tip, then grabs it back to spit in it? What kind of delusional thinking is this? How does the food delivery person even know the tip amount before the receipt? This kind of thinking is exactly why the system is so out of hand.
Why would employees in front of a counter be more deserving than employees behind a counter?
Or perhaps I should put it like: Why would a business need to pay a predictable market rate salary for employees behind the counter, but not for employees in front of the counter (because you step in and provide it instead)?
The the waiter/waitress had to come to my table, discuss the menu, provide feedback on questions, submitted order to kitchen, delivered order, checked back on us to see if we need anything else, etc. Level of interaction with staff > 1, level of effort from staff > 1. Tip appropriately if level of effort > 1 for helpfulness, politeness, attentiveness, etc. Stop making this so hard.
If anything it seems to me that it would be more logical to tip the person doing the more boring and repetitive work.
(My personal opinion is that tipping in general is a blight on a modern society and something that belong in primitive third-world economies. The way to fix this is via legislation: we simply make all forms of both receiving and giving tips illegal. It probably won't take much enforcement to quickly shift the social norms and economic practices once the wheels get rolling).
As in any tip at all? No, from me. I don’t think I’ve never _not_ tipped when the situation expects it (sit down restaurant being served). I know the person there is being paid less than minimum wage (where I live), which is already too low in my opinion, so they get something.
The amount of the tip certainly is highly dependent on level of service. That could be a significant difference at the end. I’ve tipped over 100% when the staff has done someone that stood out to me.
(Having been a server in the past and now in tech, I feel guilty about the work-level/salary imbalance, so I am generally generous with my tips.)
The restaurants I worked at (a variety of family places and bars) everyone was paid $2.13/hr or something like that. And after taxes, you would get a paycheck for $0.00.
but
The same people who jumped to tell you that they got paid less than minimum wage (especially when customers inquired about it), were making $40-80K year in reality. The service industry is all about hours worked, and which hours you work. A lot of young workers refuse to work the busy shifts (weekends), and hate dinner shifts (could be out with friends) so they only work the slow shifts and make ~$20/hr * 18 hours or something like that.
But the people there to make money? They work all the busy shifts and slow shifts to fill the gap (they work a full 40 hours), and the money is insane for what the work is. Meanwhile they will happily tell you they get paychecks for $0.00 and only made $50 on Monday at lunch.
That's the only way people give tips here (not US tho)
In the US I usually tip but have refused to do so when the service was especially bad - although even then its a hard decision because you often don't know who is actually responsible for the bad service.
I have certainly starred them in the eye and waited for them to ostentatiously count out every last penny when the service was truly abominable. It's a fairly effective way to give feedback.
You can also of course round up higher, so in the previous example for exceeding expectations you could round up to 400.
Consider it a premium that prioritizes your order, that’s what it actually is.
How does this work? The corp already handles some form of payment to the worker, especially when you tip as part of a card payment. And in both cases, the consumer foots the bill.
How's it different from paying the worker more and asking for more money upfront?
I'm not saying it's free but it's not a foregone conclusion that 100% (or any percent) of that cost must be passed on to the consumer.
If a manufacturer/distributor/restaurant is willing to accept lower margins for the increased reach and market access, they will.
I have always been a generous tipper and I try to always put myself in that person's shoes when deciding how much to tip but even I notice the psychological difference. If you don't ever think about it, have never had a job waiting tables or dealing with the public, it'd almost be a nonstarter to have a higher delivery fee regardless of tip expectation.
While 10% was customary in the first half of the 20th century, the standard tip gradually increased to 15% by the 1980s.
In 2025 it's not uncommon to see little shortcut buttons for 20, 25, 30%. You can see where this is going. They want us to tip 50% and they pay $0, even though restaurant menu prices are one of the things that has experienced more inflation than other things.
Huh, why should I know this at all. I read the prices online or in restaurant when I enter in. I will assume that as my cost of food.
That's the crux of it. All surcharges are scams designed to trick the customer into thinking the meal is priced lower than it is. Sales tax not built into menu prices is a scam that the government is at fault for allowing. All other surcharges including the socially-obligatory tip and the scummy "health care surcharges" common in California, are scams that the restaurant is choosing to do. All of these are insulting.
It's no different than telling women I'm 6' and then when they meet me revealing that's only when I'm wearing cowboy boots and a big hat.
It is my understanding that this is literally the origin of tipping.
After the abolition of slavery, there were many black people newly looking for work. And, there were employers looking for workers, but unwilling to pay money to black people.
So, someone got the idea to promote that tipping was something fancy European aristocrats did. And, you can be fancy like they were by tipping my workers (that I refuse to pay).
Tipping was previously seen as un-Americanly classist. And, most states tried to ban it when it started to pick up steam. But, it was too late. So many employers were enjoying unpaid labor that the bans were repealed.
Later, when Minimum Wage was established, workers who lived on tips alone were almost all black. So, unsurprisingly, tipped workers were excluded from the wage regulation. And, today they are only acknowledged as fractional minimum laborers.
I spent 10 years in the food service industry working every position. The whole thing is racket, and the narrative used is carefully worded.
Besides economists think positively of this so it has support not just from interested parties but officials, think tanks etc.
The listed salaries were not that far off from what even the local McDonald’s was paying
It's one of those "reset" things you need to do now and then, because it's really easy for an industry like CNA or similar to end up paying less than the gas station for more annoying work.
However, I don't think anything that's happened in the last 5 years has helped that. If anything, the inflation has cost everyone dearly, but if I put 20% of my income into stocks I am less impacted than poor people who put 100% of their income into goods and services whose prices have gone up as a result of everyone's wages.
It sounds great in theory. But a black market quickly developed, and people figured out ways to circumvent it. People created tickets for their own teams and shared laptops.
the problem is that there's still a guarantee of service for the user regardless of what you bid. if i want my burritos delivered at 2AM and am only willing to bid $1 on delivery labor, i shouldn't expect that my burritos will be delivered.
for tips, the model is "the work will be done and i'll pay extra if it's good". but with bids its "how much do i need to pay to get this work started"
But that's not what they are; they're shady "avoid employment laws" companies.
(Uber started to pop up tip options before the ride ends, sometimes as soon as the ride starts.)
Tipping is a thing of the past. Pay for your meal and have the restaurant pay their people for their work. End of story.
People in Australia are still doing it for the money, even if you don't realize it.
Sometimes you don’t want good service - as in, you don’t want a server to talk to you. That’s a lot easier to find here.
They don't HAVE to be, but they also don't have to do a bunch of unnecessary stuff to play the tips game, like fill up water that's barely empty or check in on how you're going all the time.
Maybe people in America like a "service heavy" experience, and the only way to get it is tips?
Happy employees who earn good salaries would not submit to ass-kissing and degrading work.
Knowing this is what makes the often terrible service in the Netherlands a bit more tolerable :)
Interestingly enough, I find the service worse in the U.S. Part of the reason is that the tip system leads to waiters wasting time talking about a table, and waiters who aren't your own feeling like they don't have to do anything for you. It usually takes me 5-10 times longer to pay the check in the U.S. than it does in some other countries.
I wish restaurants started offering self service sections where you could order by phone and pick up the food yourself. Having to use waiters gives me the same feeling as when I drive through New Jersey and I'm not allowed to pump my own gas.
If you need to pay people to be pleasant to you, that's a moment for introspection.
Beyond that, I personally find that leveraging someone's economic desperation to coerce deference out of them is disgusting. Give me staff who have the option to walk out without material harm, and choose not to.
I tip 0-10% where I live. Just like most Americans tip 15-25% but the first 15 are just eaten by expectation. There is zero difference except that 1) my menu shows actual prices 2) wait staff have a living wage regardless of tips or how busy the restaurant was that day.
When I do go to a restaurant that has tipping, people are usually nice to me as well, but I don’t feel like they’re really any nicer or better at their job than my local Taco Bell workers.
There's a huge list of people you interact with daily who don't get tax free tips. Why are they less valuable than restaurant workers? That was my question.
Definitely the next time I come back.
Restaurant workers should earn a good wage. Tipping should not be mandatory. But tips, in particular large tips, are fine and work globally.
I do both. And I don’t always leave a large tip. If I’m having a good quarter or year, I’ll share it. If I’m not, I can’t.
At the end of the day, they’re running a business and I’m a customer. If we’re friends I’ll buy them dinner (and they’ll comp random stuff).
You should send a thank you note to the owner!
Not mutually exclusive :)
Quick summary:
- Tipping results in lower pay for certain genders and races.
- laws that protect employees don't apply to customers. Your boss can't make inappropriate comments and pay you less if you complain. But if a customer makes inappropriate comments, its perfectly legal for the customer to pay you less if you reject their advances.
As I said, tipping shouldn’t be mandatory nor required for someone to make a living serving, frankly, relatively wealthy people and experience.
If someone owns a restaurant, I can show gratitude by coming more. If my clients like me, they can show gratitude by giving me more business. If a server does a great job independent of their employer, a tip is a good way of showing that.
(That said, if a group of employees has agreed to no tips, they should refuse them and one shouldn’t push.)
> If a server does a great job independent of their employer, a tip is a good way of showing that.
The problem is customers perceive "great job" more often when the person is from a certain race or gender or body shape. This creates an inequitable environment.
Why?
I was nice to people because that was my job, but when I've travelled to the US I have definitely seen entitled customers treat staff like shit and claiming it's their right because they were tipping.
Tipping as standard should go out the window, it just drives customers to be assholes.
> Why?
I was just curious about how OP's experience informed their perspective.
The service industry in the US is awful, and the tipping culture is really toxic. I don't understand those that defend the American approach.
It has never been about the money really. The only exception I remember was when I was upset about the way my bank processed my paycheck and yelled about it in my early 20s (my bad, I didn't know how depositing checks at an ATM worked but I ought to have). But usually it's because I felt insecure or disrespected in some way (which wasn't, to my memory, reasonable. It wasn't what the kids call a "valid crash out".).
For instance, it really gets under my skin when I am talking to technical support on the phone and they try to blame the problem on my running Linux. Argh! If it was Linux I wouldn't need their help! I'd either fix it on my own or ask some help forum.
I don't know how much that translates to the larger phenomenon, I'm not even talking about face-to-face interactions anymore, but that's my two cents.
Completely agree with this position. I didn't mean to say that removal of tipping would solve the problem, more that it is an enabler of toxic behaviour. The more opportunities provided, the more likely assholes will be emboldened causing a normalisation effect both in them, and others around them.
People say this, but what is better service?
It's not like you get better or more food, or get the food faster since all that depends on the kitchen that isn't getting tipped directly.
It's pretty much them coming to your table to take your order. I'd much rather have a free burger or drink (the equivalent of what I could get instead of tipping) with the slow service than get my water refilled every 5 minutes.
Oh, trust me, go to a decent place, be a regular, tip decently (not even extravagantly), you absolutely get looked after. For instance, several of my usual lunch spots my usual fountain drink is often "water" on the bill.
I just don't think of a way you can have tipping and it not create perverse incentives like that.
Yeah, they lose on the unit, but they make it back on the volume!
How are you both new to a city/place and they already know your name/usual before you've even tipped? Do they send runners out ahead with the information?
FTFY
(I mean, actually I agree with your point too; but personally I think tipping is much more unfair to the employees than to the customers.)
Imagine yourself catering someone and then having them talk about how great that is and wanting to pay you for that. Not in abstract but actually, in practice. It nails down the servant role, frankly. It feels abhorrent to me, even if you get numb to it over time.
From my perspective, tipping is a socially acceptable way to establish classes. Which itself is a terrible practice and the people catering you aren't your servants.
I used "catering" in this comment as a placeholder for any job that receives tips.
I'm too autistic to be playing these games and figuring this shit out. I'm glad I don't live in the US.
It is like any job where people get a bonus because they have gone above and beyond.
This is normally on top of any bonuses for performance that the employees would get and their living wage which is guaranteed.
That's assuming the employer values that above-and-beyond-ness, of course. If not, they won't give that raise, and employees will eventually settle on a level of service that the employer is paying for. If that's good enough for the customers, that's fine. If not, that's an opportunity for a competitor to pay employees more so they'll serve customers better.
Customers should not be put in the awkward position of feeling like they should be augmenting people's wages, even if it's on top of an already-sufficient living wage. Wages paid is a negotiation between employer and employee. Customers should not be involved, beyond paying the listed or contracted/agreed-upon price.
For the most part I find the food gets to my table at some point but I'm rarely particularly happy with customer service. It's sometimes an awkward negotiation to get their attention or to ask something. The opposite was true in my time living in the US - soft skills, fast response, engagement are standard. And I've been on both sides of that in food service.
Now, the logic of what youre talking about makes perfect sense and I agree with that in principle. And yet there is something about dining that is somehow different. Escapes that definition.
There are also times I find that exchanging money is more honest. I want you to serve me, I'm paying you, I don't have to keep at the back of my mind a question whether I'm asking something beyond what your boss expects/pays you. I like that about the US - it's brutal but that's reality.
Don't get me wrong, I live in EU for a reason, but some things here are made unnecessarily complicated and oblique too.
But isn't this describing tipping? You're having to ask yourself, "Is this service good enough for a tip? How much of a tip?" instead of just exchanging money for the service and that's it.
I had more fun and more satisfaction working in food service in the US than in the EU. There was also more real opportunity right there on the spot to do the thing and get more.
Like yeah, you're having to ask yourself and that's friction. But shouldn't there be a friction when you're being served by someone who is an equal? I've seen folks treat service like garbage in the EU because that exchange obscures the fact that there is an exchange of money. And I've seen service fall back on apathy.
But this is just one way to look at it - ideally it should be exactly as you describe - good service, simple exchange at specified price and confidence that the service is adequately paid for the job.
Only issue is that even in the EU this is often not the truth and restaurants would never ever afford to actually hire full-time employment contracts.
Interestingly, I arrive at an entirely separate conclusion - there is no way for equality in a relationship in which one party holds your financial security (for lack of better words) in their hands. How can the waiter be your equal in that situation, when they might have to act just to ensure they can make the money they need?
I call tipping the "A*hole discount" because only someone who is comfortable being seen as one would consider tipping 0% or even 10%. And servers will tell you that if you receive terrible, horrible, very bad service you should never tip zero, you should speak to the manager instead (since yadda yadda, the tips are for everyone, you don't know whose fault it is, etc). So instead of tips being a way to reward good service, it's actually just a discount reserved for people who are so uncouth that (A) they don't care if everyone at their table thinks they're an ass, and (B) they don't mind taking food off the table of low-wage workers (very low in states that have the horrible policy of a lower "tipped" min wage). Do those people really deserve a discount?
So, I'm not sure how to best construct a system not open to "guilt gaming" in this way, but I would like to see one.
In my state an employer is only responsible for raising an employee's effective wage (for the entire pay period) to minimum wage if the tips don't.
You can tip someone working as a waiter $100 and unless they've already hit minimum wage for that pay period, all you're doing is handing $100 to the owner because it's $100 they don't have to pay in wages. Once the waiter has met minimum wage, then the money actually goes to them.
Of course, a living wage in California is quite a bit higher then even our above-average minimum wage, so that's a big part of it.
Note: I don't care one bit if someone wants to recognize an exceptional act by handing $20 to a worker -- that's great. That's not the same as giving a bartender $4 for spending 12 seconds pouring vodka and redbull into a glass or tipping $3 when I stood in line to order at a counter and came to fetch my food when my number is called.
It even has a name.
I don’t think tipping would continue without a way to demand tips or shame people with prompts.
I hate pretty much everything about tipping. The onus shouldn’t be on some fucking customer to determine if a server makes rent this month.
I really hate that pretty much every payment terminal asks for a tip now.
I'm from Europe, and have traveled here extensively. Tipping is pretty rare, but for the past maybe 5 years, almost all new payment terminals have the tipping option.
American business software, American movies, American YouTube channels. They will inject American problems and solutions into your country, like it or not.
Microsoft may treat your privacy slightly better because of the GDPR, but those invasive systems are still there, toggled off. Waiting for Microsofts lobbying to chip away at the privacy laws until they can turn them on.
For example, just make it a requirement that the default tip is 0% in point of sale systems.
It is also not "tip" anymore, it is just "whatever pays the most" gets the service. It is just to maximise profit out of suckers, something US have perfected (from insurance to fast passes).
Not sure you know what tipping is, but it's not paying for the meal. It's paying for the service.
1. I like being able to pay for better service
2. Despite what people like to think, everywhere in the world has appreciated tips. I've never had a waiter refuse extra money. Literally dozens of countries, you get better service if you tip.
It's remarkable what little you consider "proper".
Taking one of these items out of the cost and trying to charge it separately is a strange practice.
1. Places where service workers are paid peanuts or nothing and tipping is considered mandatory
2. Places where workers get a basic actual salary and tipping is rather voluntary (and can be more or less expected)
3. Places where tipping is not an actual practice and can make things awkward even, depending the amount.
In reality, 2 is a spectrum between 1 and 3.
But I do know this is still the case in Japan. Some Japanese service workers or small business owners will even be insulted if you try to tip.
It's absolutely not. Have you actually been there, or are you repeating things?
https://www.reddit.com/r/JapanTravelTips/comments/1cyj0nu/ti...
- have a liveable minimum wage - force restaurant owners to pay at least that
period
Food deliveries (similar to Uber Eats in the US I suppose) have the option to tip, and 100% goes to the courier. 200 HUF (0.57 USD) is the most common amount (as per their website[2]). We do not use percentages.
[1] It varies and might not be universal.
It's also why "knowing a guy" can be useful, tradesmen coming in on their off hours to do a job for cash.
Eh? I don't know if you consider Poland eastern europe(I don't really), but I tip with a card all the time in Poland, you just ask "hey can I leave a tip on the card" and they bump up the amount by whatever you want to tip. And no, the amount doesn't then equal what's on the receipt - I don't know how they work it out internally, but frankly that's not my problem.
I was not referring to Poland, but Hungary. What gave you the idea that I was referring to Poland? :P FWIW, I do speak Polish though, and I have many Polish friends.
I didn't have that idea, I'm just saying that in Poland I've never had any issues tipping with card and since you said "eastern europe" I wondered if you consider Poland eastern europe. That's all.
I use "Eastern Europe" when I am referring to Hungary only because people typically think that Hungary is in Eastern Europe. Perhaps I should stop doing that and just use "Central Europe", since it is them who are incorrectly believing it is in Eastern Europe.
Yes, yes, "but the price on the menu says..." Whatever. If you're in the U.S., it's normalized that the price you actually pay is 20% higher, assuming they treat you well. Restaurants don't typically print the tax on their menus either, and yet no one tears their hair out over having to pay sales tax, and various city taxes, etc etc.
The service is so, so much better in the U.S. because of tipping. Tipping culture is good.
I've got great and shit service in Europe.
I've got great and shit service in the US.
Tip/no-tip hasn't been a factor.
That's nonsense. In the UK if the service is good I leave a tip. If it isn't then I don't. From my (limited) experience in the US it looks like you have to tip regardless. If that's the tipping culture then that culture is rotten.
>>The service is so, so much better in the U.S. because of tipping.
Honest question - do you consider waiters who ask you if you need anything every 2 minutes "good"?
>> The service at restaurants everywhere in Europe was at best mediocre
What's your opinion on restaurants in Poland? Was the service better or worse than in Spain? How was it compared to Czechia and Slovakia?
Second, what you and me consider to be good service is probably quite different.
Having said that, on the occasion when I've been in places like that and I really was in a hurry, no one has looked at my funny or seem put out when I've flagged someone down to ask for the check.
It is sometimes absurd. In the UK there's an often an extra step of "oh, you're paying by card? let me go back and bring the card reader". Some places have just one reader shared among all waiting staff, so you're not going to get it faster unless you tip enough to make the staff wrestle for it.
I like the Japanese style the best — there's a cashier by the exit.
Maybe when you come to Europe adjust to the culture. In Europe you don't eat with the clock in your hand so you can run off too the next meeting while you're still chewing. This isn't bad service, it's part of eating out that you don't storm off and take your time.
An ordinary European restaurant doesn't work with the tempo of a McDonalds, that's a feature and not a bug.
We're in the middle of a thread in which hundreds of Europeans are complaining about American culture, which is to tip at restaurants. In fact, the original post I responded to was:
It’s crazy that this still happens in the US. Tipping is a thing of the past. Pay for your meal and have the restaurant pay their people for their work. End of story.
I think it's a little ironic that when an American complains about European culture — which is to be slow — suddenly there's a bunch of tut-tutting from Europeans about "adjust to the culture" (and you're not the only one!).
We're in a thread where people are debating the relative advantages of different cultural practices. I think America's practice of tipping has distinct advantages that make it better. And no, you're not "eating with the clock in your hand' or whatever in America: is just that when you want the check, you get it.
Tipping sucks and your taxes suck too. When I see that something costs 15€ on the menu then I expect to pay 15€ and nothing more. How can you be happy about surprise taxes? How can you plan your spending when you don't see how much something costs and you still think this is superior?
We tend to avoid touristy areas, though, when we travel, so maybe that explains the better service. If I had to work in a service job that caters to tourists, I'd probably be less happy too.
This statement is just not factual without some qualification. Where I live, and in the US in general, tipping is not a thing of the past. You can say you wish it was, you can say it should be, but what you said is not factual.
I'm from the UK and travel in the US a lot and US service is much better. I've never had to chase up the check or had to go and search for staff to serve me after sitting there for ten minutes. These are common occurrences in the UK for me.
Ideally, tipping wouldn't exist and everything would be priced in, but pragmatically, incentives grant extra benefits to both parties. Potential for more money for the server, better service (and the ability to punish bad service) for the customer.
(I know everyone making similar observations is getting voted down, so I appreciate I may simply be far off the bell curve on this and the majority experience the total opposite. But it's my reality.)
Good service is common in industries where tipping doesn’t happen. What makes restaurants special that their workers can’t provide good service if all of their pay comes from their employer just like everyone else’s?
I've had these things in the US. In fact the service generally I've had is all for show, people being really "fake nice" and / or overbearing but then forgetting drinks or food items you ordered.
At least in the UK you can genuinely not tip someone without worrying about them being unable make rent..
However, the whole restaurant experience is made by many people: dishwasher boy, prep boy, shef, cleaning lady, etc.
They should tip to cleaning lady as dirty toilet can ruin whole "experience".
I don't know of any other fast food place that does that.
For that, you need the restaurant employees to be organized in a strong, independent, non-corrupt union; or a highly-upstanding restaurant owner/manager.
The latter is sometimes the case, but often/usually - not.
So, former is rarely the case, I'm afraid, because working-class consciousness in many countries is lacking; and forming a union is hard; and restaurant staff have a lot of churn, so by the time you get the idea to do this, or have started work on it, you might be going elsewhere.
But regular restaurant clients taking owners to task about wages is definitely a thing to consider...
I see this a lot (not specific to HN) - some person doesn't like $THING, so they just declare that that thing is bad, or "a thing of the past," or whatever.
I see this a lot - some person doesn't like a phrase ("a thing of the past"), so they just misread it and take it clearly the wrong way.
You won't find a single non-barista in the US who thinks it's reasonable for Starbucks to solicit 20% for someone pouring your coffee into a cup. But restaurants have tried the "don't tip our waiters" thing in the US and it doesn't work.
Most seen on reddit but seems to be becoming commonplace on here as well.
This article is missing a real issue here by trying to make the story all about the employers. Many workers like the tip system because it creates inequality among the restaurant workers. Good servers can earn a lot more money than what they’d earn if every server were paid the same, fair wage.
My mom used to work at a furniture store as a floor sales associate on commission. She would regularly clear $120,000/year (this was 15 years ago, so like $180,000 today). A generous wage for the job at the time probably would’ve been $50,000 or so. She would’ve fought such a policy tooth and nail.
Did you mean that it rewards them for their efforts?
Commission on sales is very different from restaurant tips.
Why did the tip percentage go up from 15% as the norm to like 18-20%? It’s a percentage so if things go up in price so does the tip. At what point is it their job vs quality of service? Why don’t we tip fast food workers, because they probably face more abuse / deal with unruly customers more than dine-in (at least from experience).
Can you tell I think about this a lot? lol
Why did it go up from 10% to 15% 50+ years ago? And why did it go up from 18-20% to 22-25% in the last few years?
Especially when they removed the separate server minimum wage at the same time, meaning that servers both moved up into the regular minimum wage and gained in tipping culture.
Not if they know what's good for them.
It is usually against the law to do so, and enforcement is extremely pro-labor, so the only chance you'd have to get away with it is if it got swept under the rug and nobody ever complained. But people who work in tipped positions are some of the most ruthless people you'll ever meet (you kind of have to be when tips are your bread and butter), so that's never going to happen in anything but made up fantasy.
I hadn't thought of this before, but keeping tips as formally selected and paid for by the consumer may help the restaurant with liability issues where alcohol is involved. Paying servers and bartenders a direct sales commission might become an issue in court if a customer is overserved.
It's possible for high end bartenders or servers to make over $500 a night in tips. The whiplash of moving into true salary or hourly work is an open secret in the high end service industry. This is why you see some old waiters and bartenders hanging around, when some people consider the service industry "entry level."
This is also why I don't like to listen to them complain about their jobs lol. The difficulty of work to income ratio is unique to this industry.
You can also, if you're not lucky, barely make anything in tips on minimal hours per week and then have your employer steal half your tips anyway, and then you're basically clearing $4.50/hr for 12 hours a week and probably ending up on food stamps until republicans eliminate those entirely.
Thing is, I've known freelancers who make great money, but even they can have a constant underlying stress about "if the work dries up I'm homeless". Imagine the same thing but instead of the work drying up your manager only schedules you for four hours a day between the lunch rush and dinner and the tips are minimal despite being there for the same hours.
> At the outset of the Amazon Flex program, from 2015 through late 2016, Amazon paid drivers at least $18 per hour plus 100% of customer tips
> Beginning in late 2016 ... Amazon secretly reduced its own contribution to drivers’ pay to an algorithmically set, internal “base rate” using data it collected about average tips in the area ...
> For example, for a one-hour block offering $18-$25, if Amazon’s base rate in the particular location was $12, and the customer left a $6 tip for the driver, then Amazon paid the driver only $12 and used the full customer tip of $6 to reach its minimum payment of $18 to the driver.
And their punishment was just to pay back what had been taken: I can't imagine there are many other opportunities to steal $61m with the only punishment when you're caught is having to pay it back.
There was a very famous viral video of a woman stealing offering to just pay for the goods when she was caught, but we all understood why that was a ridiculous idea. Maybe she was just an Amazon VP, so she didn't know any better
> Apparently, projecting personal prosperity was more important to him than making payroll
He actually had the temerity early on in the debacle when he was still pretending there was money to tell us that they had decided to not pay us that week because it would be bad for the companies investments to withdraw funds then.
[0] https://www.justice.gov/usao-ndtx/pr/slync-founder-sentenced...
All other forms of serious crime have dramatically fallen since the 90's per Capita. Some are at 1/3 the rate they were then. (FBI UCR)
remember that next time you see a headline or politician speak about crime.
We are safer, doing less crime to each other, and seeing more prison population than ever before.
While corporations crush us illegally and face no consequences.
I'm tired of being shamed to pay more for less.
Also whoever was in charge of teaching staff to "turn away in shame" when the tipping screen is shown needs to go to some sort of gulag.
Why would you ever tip on take out? What are you tipping for exactly?
- No tax on overtime: so now making them work 60 hours a week is cheaper for the employer
- No tax on tips: so the tip based payment model is cheaper
And because the implication of your argument is we should never tax anything because that's a benefit to both the consumer and the business
To me, the bad part is the tax reductions only appear in behavior I don't agree with: high overtime and tipping (when it's semi mandatory).
I'm not American, but this is also showing up in my country.
Taxes do not feature into salary negotiation. Employers pay as little as they can get away with, while employees want to get as much money as they can.
If you need theoretical worlds with no correspondence to anything ever in actual history to justify your claim, then maybe there is not that much to it.
The point is valid based on the context here, but taxes certainly feature in compensation.
Notably if you’re considering moving from a no/low tax locale to a higher one.
Two spectacular examples are the MLB contracts of Shohei Ohtani and Vladimir Guerrero.
Ohtani is getting paid very little ($2M/year) for his 10 years with the Dodgers, the vast majority is deferred to when after he leaves the team (and, notably, probably) California (likely back to Japan).
Vlad’s large contract is padded with a very large (like $175M I think) “signing bonus” to be paid over 10 years. The key point is that money will be earned “where he lives “, which is Florida, not where he plays (Toronto).
Both of these are structured to avoid local (high) tax jurisdictions.
But not just superstar athletes need to consider this. Anyone moving for work to a higher tax locale needs to consider that during salary negotiations.
(The workforce at the plant was unionized and the higher rate may have been part of the labor contract. This was in Montreal Canada about 25 years ago. )
Taxes are still being assessed, and tips over $500 a week won't have their tax refunded.
Some rhetoric during BBB debate was a side effect of a similar political game; cuts for "middle class" in the Tax Cuts and Jobs act from 8 years ago were due to expire, benefits for corporations were not.
In the middle ages vails or informal rewards were given to well performing servants. In the Roman times corollarium (Lucilius, Seneca), a form of tipping was known. Cicero referred to tipping as stipen although some argue that is not above regular pay.
There are some evidence that in the Han Dynasty, gifts were bestowed on well performing eunuchs, above their normal pay. Considering that in ancient times payments often were in non-monetary compensation, this could be considered a progenitor of tipping.
Incas had similar systems of rewarding service with goods like cloth, though not exactly like modern tipping.
Tipping, as we understand it today, likely did not exist in the same form in ancient civilizations, but there were practices where extra gifts or payments were given for exceptional service.
> What has been will be again, what has been done will be done again; there is nothing new under the sun.
You have a farmer that grows/raises food, butchers and others that 'process' it, you have a team of cooks who prepare/cook the food, and you're supposed to tip the the person who just brings the foor from the kitchen to your table, maybe 20, 30 meters away?!
Sadly, tipping is sprading all over europe too with POS terminals bothering you more and more often for tips.
Leaving a few francs (I'm not young) was common practice.
With cash payments growing more rare, and without the ability to tip easily with cards, maybe it became much less common.
That said, I don't disagree with your comment on how it's spreading. What I don't love about the terminals asking for tips is that, IMO, it creates an expectation of tipping that wasn't there before.
Now, in Portugal, we're starting to see cases of "here's the price with a 3€ tip (for example), if you want to pay that", and you awkwardly get to say "no thanks I want to pay the actual price", which I find very unpleasant.
On the other hand, we regularly eat out at a place near us that only takes cash. We usually spend about 18€ and I always leave the extra 2€ as a tip.
I've lived in Portugal for 30 years and I never had that happen to me. Where are you seeing this? I could only imagine it in a place that only serves tourists and foreigners.
Maybe not "only", but yes, they're typically Americanized brunch places, or other "trendy" places. And some of those places have good food worth eating.
It's still a pretty rare thing, fortunately. Something less offensive that I'm running into more often is to be asked if we want to leave a tip. And more common still are PoS systems that give you the option on checkout.
Probably not the thread to digress into what's happening to dining in Lisbon (eg the rameniffication of everything) but it's definitely bringing in a more tip-forward mindset.
At first it feels shitty hitting 0 or “no tip” on a payment machine but after the first several times it feels empowering and I doubt employees give a shit anyway. Just do it.
Doesn't change the fact that it is a terrible idea.
I am not sure if the money from such sources was ever taxed as income, but if so, then I wonder if such will be non-taxable now? Considering donation and tip buttons have some history behind them, perhaps such "jobs" could be considered "traditionally tipped jobs?"
> (h) Published List of Occupations Traditionally Receiving Tips.-- Not later than 90 days after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary's delegate) shall publish a list of occupations which customarily and regularly received tips on or before December 31, 2024, for purposes of section 224(d)(1) of the Internal Revenue Code of 1986 (as added by subsection (a)).
~90% of tipped workers REPORT less than $61k in income already. At that income, you're barely paying much income tax anyway.
This is just a trick to make people think they wouldn't have to pay social security and Medicare - which is the main tax they're paying - when in reality, ~90% of tipped workers will get next to nothing.
Do they have a list of professions and industries eligible or are they going with weak “traditionally tipped “ language?
And we expect the DOGEd and defanged IRS to vigorously enforce?
Yes.
> And we expect the DOGEd and defanged IRS to vigorously enforce?
It's easy to enforce as written, even with a defunded IRS.
Whether or not it will be enforced is a different question entirely. My crystal ball isn't working.
In many cases, tipping functions like a form of bribery, incentivizing employees to offer favors or services beyond what is appropriate, which can come at the employer's expense.
It can also create resentment toward customers who don't tip, leading workers to offer poor service and fall short in their duties.
It's been a very long time since my last visit to the USA. I probably paid tips in cash back then. I would assume that workers can chose to never report those tips as income, or not all of them, so no taxes. But if everybody went cashless by now, customers probably pay the restaurant, the restaurant pays the tips to the workers and all of that money is tracked and taxed. Is that correct?
Eliminating tips and increasing the base wage is a stupid idea. All the talented servers who love the job will leave and mediocre people will replace them.
raise prices by 20% and drop "mandatory" tips which is what they have become
then tipping can go back to what it was -- optional extra to reward excellent service, not an unspoken part of the bill
Say I am a small business owner selling a $90 item which is $100 with state sales taxes. I say if you are willing to tip me at least $90, the item is $1. The buyer saves $9 from state sales taxes, and I save on income taxes because tips are exempt from tax.
If I need to make sure a server earns $200 after tax for a shift in order to be able to attract them to work for me, it is definitely to my advantage for as much of that money as possible to come directly from the customer as tips.
If the prevailing sentiment was to make things easier for low income workers, I would expect people to want to not tax tips, and increase the minimum wage. And people who want less government interference, would want less tax, and lower minimum wage. Those are the two opinions I expected to see.
But instead it seems like people want to tax tips, and increase the minimum wage, which is evidence of a kind of authoritarianism that I did not expect.
If you're making $2.50/hr plus tips then I think you deserve a break and not taxing tips is a sensible break. A better solution would be to prevent restaurants from paying their people poverty wages, and if servers aren't risking starvation and homelessness if they go without tips for a week then why would you not include their tips in their regular income?
Raise the minimum wage, require servers to be paid minimum wage, and enforce a straightforward tax on people's income that doesn't distinguish wage from tips. Maybe also increase the 0% tax bracket to something more reasonable, like $20-40k, just to simplify things for people who are struggling to subsist while we're at it.
There is no jurisdiction in the US that allows servers to be paid less than the standard minimum wage. Even where you find server minimum wages (your $2.50/hr example, although not all states allow this) the employer is required to top up to the standard minimum wage if tips don't cover the difference.
Which makes this kind of silly,
> If you're making $2.50/hr plus tips then I think you deserve a break and not taxing tips is a sensible break.
If $2.50/hr + tips exceeds minimum wage, why do you need a special break? You're making more than other minimum wage workers. If $2.50/hr + tips does not add up to minimum wage, the employer has to get you to minimum wage, so you are making no less than someone else making minimum wage.
If people with low income need a break, just give people with low income a break. How that low income is derived is irrelevant.
I’ll drive there myself, thanks. My pup gets a ride. The apps get the finger. The drivers get what they deserve.
Wins all around.
This is rather brilliant. * make it look like the government is stealing “gifted” money * stop taxing it * turn as many jobs as possible into tipped jobs supposedly for the person’s benefit * really the employer wins since they’ll pay less and claim “tips”
My business does not involve tips (exactly) but I can tell you that I’ve seen anywhere from 20-40% of money run through my system being in cash, depending on where I am in the country.
...So people often tend to be carrying cash still.
The fact that a business "famously" is cash only seems to support this, as that implies that it's becoming more unusual.
Everything else is a crapshoot. If you don’t have cash you aren’t getting dumplings in Chinatown. And that’s just a bummer!
Yes, I know some places give cash discounts. Most do not.
And even if things aren't marked up to cover CC fees, if you have a rewards card, you're effectively paying more if you pay in cash.
Cardholder agreements used to disallow CC surcharges, but I think such clauses were outlawed.
But today, who's getting tips in cash? Not many. Customers are paying for everything with credit cards or contactless, save for the occasional cash-only coffee shop or restaurant.
I know America has always been backwards (cheques were still in use well into the 21st century, card pins didn’t seem to catch on before contactless became a thing about a decade ago), but I thought contactless was quite high nowadays, especiallly with phones and watches.
Certainly I’ve had no problem paying contactless in the cities I’ve been to recently - New York, DC and Miami.
Credit cards caught on later in other parts of the world, and they benefited from having more modern options with regards to the equipment used. Governments and banks also did more to mandate the use of security features (chip & pin) than in the US - American banks like people using credit cards - it makes them a lot of money and they're incentivized to keep the barriers low as long as the amount of fraud is manageable to them.
When I eat out in NYC now they almost always bring the machine to your table so you can use contactless and you select the tip amount on the screen.
The other week I went to a place that asked for my card and brought out the receipt for me to sign and I had to manually calculate the tip and was struck by how long it's been since I had to do that.
I heard this mess has to due to banks and CC companies (Visa etc) fighting over who implements the changes, while the system in Europe (and Asia, and South America...) doesn't have that division, so they get the tech mainstream fast.
Vet, grocery store, fedex/ups, pharmacy, restaurants, retail.
“ Tap-to-pay is almost as common as someone writing you a paper check or an IOU, out here.”
I.e rarer than hens teeth.
Every server who waits on me.
I make it a point to carry cash and tip the waitstaff in cash even if I pay the bill on my credit card.
1) Tips on credit cards are a "dark pattern" meant to increase the house rake of the credit card handling companies.
2) Tips on credit cards are controlled by the owner and often never make it to the waitstaff.
I can short circuit this by giving my servers tips in cash.
So like you, I carry cash for tipping. I leave the tip section blank and write the provided total in the "total" line. Then I leave cash. Employee gets to decide if they declare or not (or in other words, if my tip may be credited towards their wage).
Sure. I agree it has been shifting, but mostly out of people simply not paying attention.
However, it's pretty easy to get it to switch. I have converted probably about 20% of my friends to doing cash tips simply by pointing out a single time that credit card tips have a significant chance of not making it to the server.
I haven't even pulled out the "credit card tips are a scam to increase the rake" angle, yet.
I just don't trust management of places not to take a cut if it's done digitally.
About half of the large tips at high end restaurants in my town are cash. Sounds like it is about a third in New York. Especially if it is folks who work at a restaurant.
Very stable, from what I can tell, though with significant regional variation.
> the cost of cash handling is more than the potential loss of business
High end restaurants will never be cashless. And you can cash tip at a cashless restaurant. The tip isn’t going to the business.
But yes - cashless is obviously not w.r.t tips. But once a society is 99% cashless no one carries cash so won’t cash tip either.
People just don't recognize it because right-wing populism is a different breed than left-wing populism (the only one they have had exposure to).
Tariffs are a populist move as well. If you go look at Bernie's old website (pre-trump) he has a whole section about the importance of tariffs.
Why wouldn't I ask them whether they were happy with their overall compensation, including health benefits, retirement, hours being scheduled, vacation or sick time.
Should I ask those in the back who may or may not be getting the tips from the table?
Tips are supposed to be "in return for a service, beyond the compensation agreed on" (WordsAPI).
If tips instead mean "it's something you have to give when you had no problems with the service provided", and you expect routinely not to have problems with such service providers, then it's implicitly agreed that tips are required, so they are not tips anymore.
IMO most discussions about tipping are a distraction. "Divide and rule" if you will.
== THE LAW ==
(or my best understanding. IANAL)
For most of the west coast (AK, CA, OR, WA): there is no separate "tipping wage". Tips are *always* on top of *at least* state minimum wage. There is only one minimum wage, so tipping is always a "bonus".
Other places, there are two "minimum wages", but that's confusing because at the end every employee has to make at least the normal minimum wage. The difference is that employers can use tips as credit against this. So, with the exception of Georgia (WTF GA!), employees *must* make the state's minimum wage (default federal). Using federal (min wage = $7.25) an employer *MUST* pay you *no less than* $2.13/hr. This is conditioned that you have made *at least* $5.12/hr in tips. The problem here is what tips count to what wages. Per day? Per week? Per paycheck? DOL says "workweek"[1]
============
I've heard stories of employees not getting a paycheck "because employer thought it was all tips" (illegal b/c they credited too much) or very small paychecks with the explanation that the employer over-credited tips. There's at least a decently straight-forward way to show what can be credited, and this is why there's the tip amount that you log. Ignoring cameras, the burden is on the employer to prove that they can make these credits, so that line-item on the bill is important (IANAL)
Personally:
So I think 90% of discussions around tipping end up just being a distraction to create a fictitious divide of "minimum wage workers" vs "tipped workers"[2] who should instead be working as a coalition to increase the floor. They are both minimum wage earners! The main difference is primarily that tipped employees are just more likely to suffer from wage theft, due to how they are paid. But that's also something that both experience, just at different rates.
TLDR:
Getting rid of tips as a concept is a simple solution to the wage theft problem, but isn't the real problem just good old fashion wage theft? (second problem being "is minimum wage minimum"?)
[1] https://www.dol.gov/agencies/whd/fact-sheets/15-tipped-emplo...
[2] Simplifying by ignoring tipped earners with higher than min wage base pay (we can extend as needed)
Governments tracking small transactions like tips and taxing them should bother everyone. That rag, the New Yorker, knows that of course.