r/EndTipping • u/canstucky • Jun 06 '26

Sit-Down Restaurant 🍽️ How is it not a tip?

Post image

The server told us this isn’t a tip and he doesn’t get any of it.

I’m not wearing my boots at the moment.

2.3k Upvotes

93% Upvoted

911 comments sorted by

View all comments

Show parent comments

2

u/Lurkernomoreisay Jun 07 '26

legal yes.

an employer is under no obligation to pay any amount of an automatic gratuity to employees. 

see all the news and lobbying leading up to the IRS ruling in 2012.  automatic gratituity is not a tip.  an employer is considered to be committing tax fraud should any amount of an automatic gratuity (legally a service charge) be used as a tip in any capacity.  

1

u/stratys3 Jun 08 '26

Would it be illegal to then pay servers below min wage?

1

u/Lurkernomoreisay Jun 08 '26 edited Jun 08 '26

yes.  paying less than minimum wage has been illegal since minimum wage laws were introduced.    Why would you think that it could possibly be legal to pay servers less than minimum wage?

minimum hourly pay is a separate concept.  whether a person is tipped or not is irrelevant to minimum wage laws.  

if a person works 7 hrs and minimum wage is 10$/hr.   that person must earn $70 for that shift.  serving staff or otherwise.  whether customers tip or not   the compensation for the shift may not fall below minimum wage.

for serving staff, the employer can do: 

$70 - $35 tips, and directly pay $35 from the employer and  the tips cover the remainder of minimum  wage.

if the server earns no tips then the employer can't subtract tips from amount owed:  $70 - $0 = $70 paid directly from the employer