JBord

Most people don't take their job for fun. I know I didn't. But a lot of people I know have enjoyed being a server. With tips, servers can make pretty good money at the right place. A friend of mine in college worked several nights a week at a seafood place and made about $70k/year, while keeping his days free for classes and other stuff. I think though, as restaurant owners add service charges, tips are likely to go down and, as you suggest, might mean a change in the type of applicant for a server job. If the charges were just incorporated into menu prices instead, servers would actually make more money. It doesn't change demand for the restaurant. If you charge me $20 for a meal, or $18 + $2, I have the same economic decision to eat there or not.

Then again, there are people who buy basic economy plane tickets and pay more in total once they add in all the extra fees, so maybe I give people too much credit.

Visconti

In SF servers get min wage, which is, what, $15 per hour? Then, you stick the health care tax. Then, the sales tax. Then, another 20% tip on top of that? Not even sure why we're tipping in SF when they get minimum wage.

Is there a reason? Just tradition, I suppose?

Eastbay1K

Why is minimum wage the acceptable pay for restaurant service? While some servers should be fired on the spot, others can make your day / evening / meal into an exceptional experience. The restaurant isn't sticking you with the health care mandate, nor the sales tax. The voters of San Francisco and California have. They could include both of them in their pricing. [Actually, they are sticking you with the health care mandate, and trying to recoup the voter-imposed expense.] There are a few (and very few) restaurants that are able to pay a very decent wage with benefits, and they keep their staff for a long time, and fortunately, have the luxury of enough income to pay the staff such wages. Sales taxes (at least in CA) are not trust fund taxes - they are assessed against the business, not against the patron (and then the business would theoretically be holding the funds in trust for the State until turned over, if a trust fund tax).

If I'm being assessed an automatic gratuity, well then, by definition, that's my gratuity, and it is between the restaurant and the wait staff to work that out. If there are junk charges and I decide to eat somewhere anyway, my "base" is the total non-taxed, non-feed (no pun ... well, maybe a bit... intended) portion of the bill.

corky

I had lunch yesterday here in LA with a FTer. There was a sign which said that 4% would be added to the check because the restaurant provides health care for their full time employees. It also said that they would remove the charge if asked.

Visconti

I don't know, and never gave it any thought. Why does a Baseball player make $15 Million per year? Why are some WS bonuses $10 Million? Why does Kevin Durant make $20 Million per year for putting a ball in the basket? It's simply what's determined by the free market.

The purpose of the gratuity was to help those who were paid a wage far below the minimum, where without this "extra tithe," they would have trouble living day to day. $15/hour just to bring me my food seems pretty fair. I mean, it aint rocket science to bring the right order and not spit in it, right? So, aside from tips being an American tradition & insuring our food isn't sabotaged, I really see no compelling reason to tip 20% in SF, though I do so anyway.

Perhaps, I should rethink it, and lower it to 10%.

s0ssos

Did you ask the server if they were full-time?

Rbt001

Wow! I don't live in California, but I've kept up with this discussion and finally decided to do some research. While in hospitality school many years ago I did work as a waiter in a private country club where members charged all of their bar/restaurant checks to their account and were billed at the end of the month. Every check automatically received a 15% gratuity which was paid out in full on our paychecks. There was absolutely NO EXPECTATION of additional cash tips, nor was it common practice to leave any cash tips. We were a happy staff. Note also that almost all of the wait staff were career wait staff, having worked at the club for many years and/or along the resort hotels on the ocean (this is back in the 1980's). And yes, I'm sure the country club took a tip credit against the hourly wage they paid. After university, I worked for a major upscale hotel chain who took tip credits for: bellmen, doormen, wait staff, and bartenders. And we provided them with health benefits.

So if my research is correct, for quite sometime employers in California have NOT been able to take the tip credit and must pay employees the minimum wage. And it seems more recently it has become more painful for employers with a minimum wage of either $11 or $12 hourly. That's close to $10 hourly more than restaurants in other states where the tip credit is permitted. For a six hour shift, add employer payroll taxes on top of this... and I can better see how the food & beverage establishment is getting squeezed. Something's got to give.

Should it be the customer that makes this up, through higher menu prices and/or surcharges?

As others have pointed out, restaurants owners are squeezed and work hard to turn a profit. And while I typically have little compassion for corporations that seem to squeeze every last penny for shareholders, typically at the expense of customers and employees, this is certainly one case where I do feel for the restaurant owner.

I'm amazed at how high those "suggested gratuity" tip calculators really go. I grew up with the tipping rule of thumb 15% to 20%, depending how good the service was. Today, I don't think any show less than 18%. I think I've seen as high as 25%.
In a conversation with a "truly entitled" waiter at Carrabba's it was his believe those higher percentages were their because of the LOWER menu prices/average check. Um... lower that what? Lower than the five star high end dining establishment with ambiance, tablecloth service, a team of two servers that have no more than 3 or 4 tables (if that) in their station because it's a multi-course meal that stretches 2 hours? Hello! Serving at Carrabba's you expect a higher percentage tip tacked on to make up that difference, when in this casual dining environment you have at least twice the tables giving you less opportunity to be attentive, courses come out based upon what's quicker (salad before appetizer since the salads are ready prepped) and sometimes the next course is delivered before customers are finished with the course in front of them, so that you can turn the table in 45 minutes? Had I really asked that of him, I'm sure he'd blink and with a straight face answer "yes."

Something's gotta give... and it's not me as the customer.

JBord

There are a few things to address in just those few sentences.

- I wouldn't say minimum wage is acceptable. An acceptable wage is one that a person is willing to accept in return for employment. It's that simple. If someone agrees to minimum wage than they've made their choice. If the owner can't hire someone acceptable at that wage, he will need to increase it.
- Technically, the restaurant IS sticking you with both these things. These are business expenses, no different than maintaining kitchen equipment or paying for their electricity. Businesses traditionally have listed sales tax separately, although some don't. As I mentioned in a previous post, higher end restaurants are going to an all-inclusive ticket system. You might pay $150 for you meal, and there's no breakout of tax or tip.
- The difference with this surcharge is it's not common practice. 99.9% of Americans enter a restaurant expecting to pay a certain amount more for tax or tip. They don't expect to pay the surcharge. I have less of a problem if it's clearly displayed that this fee will be added to the bill before I sit down. Although I still think it's either a) a political statement, or b) just a bit tacky. I don't go to a restaurant for either of those things. Just increase menu prices to cover your business costs.

And I think this is what makes the surcharge even more frustrating. People are being shamed when they tip 15% these days. From what I hear, 20% on the AFTER-TAX amount is what servers now expect. So you have to assume now they want the tip on the surcharge too, which means we now tip them for receiving healthcare from their employer that we're also paying for. Soon I'll pay twice the menu price for a meal. The simple way for restaurants to make this more customer-friendly is just include it in the menu prices. Servers will get tipped on the larger amount automatically that way.

Rbt001

Let me share two things in response, as to why I'll never be shamed by my tip.

First, my very last time that I would ever be stunned to the point of no-reaction to an imposed gratuity.
A number of years ago, at dinner with a friend, trying out a particular restaurant for the first time. The young lady who waited on us really didn't have her act together; the service was flawed. I was catching up with a friend, so we were more engaged in our conversation rather than spending time picking apart her mistakes. We just shrugged them off. Here's the kicker... before delivering the check she asked: "have I given you excellent service this evening?" The truthful answer would have been "no," but the easy answer was just to say "yes," which I did. When the check arrives, I believe the gratuity added was 20%. I was stunned. I couldn't remember seeing a statement on the menu about an imposed gratuity, and I concluded that my acknowledgement of "excellent service" gave her the go-ahead to add it. The service was "okay" at best, and on my own, I would have tipped 15%, discounted from the 20% I would have left on my own for good service. Since the difference between the two was about $5, I paid the price to avoid any commotion. But that's the last time because on principal it is wrong.

I've come to believe that waitstaff do need to hear critical feedback when their service falls short-- especially those with an "entitled attitude."

Today I am more careful to scan a menu when dining somewhere new because the MENU is customarily where patrons are informed of prices and costs. If it's not listed on the menu somewhere, then you can refuse to pay. (I've got a story to back this claim below.) If I find there's an imposed gratuity and it exceeds 18%, then I'm prepared to have a conversation with the waitstaff up front. "I see that upfront this establishment informs patrons of the gratuity they are expected to pay. So let me be up front and let you know that we will expect nothing less than good and professional service from you. Is that fair and do you feel that you're trained and prepared to deliver that good service?"

In other situations, where the service is very bad and there's been a number of fails, I simply ask the waitstaff how they felt their service was. For those that are so bold to say "I did a good job," I point out how it wasn't and why I have discounted the tip.

And given this tact, the next time I visit California and eat where there is a surcharge for the minimum wage and/or healthcare, I will explain to the server at the end of the meal that I offset the gratuity by the surcharge.


Story about the importance of Menus: Defrauding an innkeeper
The day after Hurricane Wilma passed through South Florida, the IHOP in Dania, Florida was one of the very few restaurants open. Five or six of us had an early dinner in a packed restaurant. The check presented was hand-written, so I had added it up in my head to determine gratuity and how much it would be at the register. The owner, manning the register, came up with a figure more than $10 higher than me, and I questioned him. He rambled through the items listed on the check and concluded with: "plus the cover charge."
"What cover charge?" I asked.
He turned to the dining room and shouted: "Does everyone know about the cover charge?"
To which the unanimous response was "Yes!"
"Well, no one informed us of a 'cover charge', and I'm not paying it."
"I'll call the police on you!"
"Go ahead."
Begrudgingly, he responded as he waived the cover charge, "Fine, but you have to pay with cash."
"Nope," I responded and pointed to the credit card logos on the entrance door, "I'm paying with my credit card as you display them as valid forms of payment."
He must have known there was a police car with police officer parked right outside because after he processed my credit card charge for the check amount WITHOUT cover charge, he followed me out and went to the police car.

I followed him and said about these words to the officer:

"Sir the menu or bill of fare is the established means of communicating with patrons any pricing, fees or charges. I came to this establishment with a viable financial means to pay my bill, but was told when I am leaving that I owe a cover charge which is not posted and does not appear on the menu. Furthermore for this type of establishment it is not usual or customary to pay a cover charge, so I refused to pay it. The criminal statute relates to "defrauding an innkeeper," and I have not committed this crime as I am willing and able to pay my bill. If anything, this would be a civil matter."
After listening the officer said: "Step back," then he had words with the owner/manager out of my earshot, as I watched. The officer then looked at me, and waived me away, indicating that I could go.

EPILOGUE: despite the owner's claim that he had to pay surcharges and/or extra money to have food delivered, I think I remember hearing that he found himself in hot water and accused of "price gouging.

An earlier post on this thread linked to a picture of a restaurant check presented after the meal where a surcharge as added. If I understand the post correctly, there wasn't any information about a surcharge posted up front; the patrons were surprised to have it sprung upon them with the check. That's one i'd refuse to pay also.

Visconti

The problem you have with something like the SF healthcare tax is that some restaurants will simply levy the tax and keep it. The local governance here can hardly keep track and ensure this tax is actually used for their staff's healthcare. Moreover, most Chinatown restaurants keep (many Chinese ones too) keep the tip and do not pass it onto the wait staff when left on a credit card.

I think I will lower my general tips to 10%, which is still around 15% - 16% when you consider the healthcare tax. No problem, they add more taxes, I will keep lowering it until the point where I'm no longer welcomed; then, I'll just go somewhere else. If I wanted to get value for my tip, I'd go to Vegas, not waste it in a city like SF.

JBord

I think this is too broad. Assuming a restaurant is following the law, there can be valid taxes that the restaurant just passes through.

I don't know California law, but in some parts of the country I've started to see this "healthcare surcharge" levied because the restaurant is required to provide health care to employees, not to pay a tax. So either the surcharge is being used to pay for healthcare or used to pay the penalty for not (which I believe was removed from the federal ACA law, but States may be different). Healthcare is a business expense. You can negotiate rates, you can have employees pay for a portion, etc. Lots of ways you meet the requirements at different costs. But it's not my responsibility to pay for healthcare as directly as a surcharge appears to do.

But it makes sense to itemize sales tax from an accounting standpoint, because it's a pass through. And I don't recall ever seeing a sign or menu stating that all items are subject 10% sales tax.

Rbt001

Beginning in 2019 the "individual mandate" as outlined in the Affordable Care Act, has been eliminated. However, the employer mandate has not. But note that it applies to employers with 50 or more full-time employees, so I'd say that most individually owned, local restaurants may be exempt from the requirement or penalty with respect to health insurance for employees. That doesn't mean that the small employer can't or shouldn't offer health insurance, but if they do so, let's hope they build it into their menu prices. Let me also clarify your comments regarding employer/employee cost sharing of insurance premiums and negotiating health policies. The law specifies a minimum amount the employer pays per employee, known as the employer portion. Additionally the law helps define what can be called "health insurance," specifying types of coverage, limits, etc. All this means that there really is NOT an inexpensive policy to find. Insurance rates/premiums are submitted and approved at the state level and cannot be "negotiated."

All this is to say that it's not easy for the restaurant owner. Someone previous stated their belief that "surcharges" (erroneously called a "tax") were perhaps levied but simply kept by the owner rather than used for the stated benefit. I look at that whole concept as an employee/employer issue. How many times is an employee going to explain that the surcharge goes to cover the costs of health insurance for us-- when the employee KNOWS (in this hypothetical) that the employer is NOT providing health insurance? I would be looking for a new job-- especially if customers are offsetting my tips in relation to the surcharge for something I'm not getting.

Visconti

At this point, there's been so much whining and complaining going on, that whatever sympathy I had for both the owners and wait stuff are out the window. Either make it work or go out of business. I don't care which, really.

I mean, what other business keeps crying when they can't make it work? Just getting ridiculous here in SF--these folks are like glorified beggars.

Visconti

Here's the thing. I have no qualms with 20% tip, and never have with this custom of ours. For excellent service above and beyond, I'll even pass out C notes. Again, it's just what we do in America.

The issue I have is when they demand for more. What is this nonsense where I read these articles about how to make the wait staff's job easier, tipping 25% on top of tax/drinks, and how to help out your server? 20 or 30 years ago, we'd call out this crap & ridicule this type of nonsense on general principle, let alone making up excuses to rationalize nothing more than cheap greed.

Shame me for lowering my tip? I'm from the generation that couldn't care less about this type of public shaming or virtue signaling.

JBord

Don't take my post the wrong way, I agree with everyone you've written here. My comment was directed at you writing that you'll lower your tip for other taxes that get added on. I meant it was too broad in the sense that there's a difference between the employee or employer demanding more and the government passing another nonsense tax law. Employers adding surcharges to pay for healthcare is ridiculous. Employers adding a line item for a new tax is annoying but I won't penalize a server for a tax that is 100% passed through to the government. I may reduce my dining in general though if the total price to value ratio changes too much.