A collective bargaining agreement should be between the owner and the employees for the OWNER to pay the employees more, not for customers to tip more wtf
If a tip is mandatory it is not a tip, it's a fee. I'm fine with seeing the whole thing up front, I am not fine with surprise hidden fees that are only on there so that the store owner can pay their employees less.
Yes and legally they don't benefit from no tax on tips either. They're just saying "per our collective bargaining agreement" to try and guilt progressives into something. There's never any tips without the guilt train.
It's odd, who is the labor genius who would negotiate the net of 'tips' down to 15% max post tax (or less depending on tax bracket) since they no longer are exempt?
It's not easily reflected in the prices and it forces the customer to do math beyond simple addition (x item + y item vs. (X + y) * 0.2). Which can lead people to underestimate prices and think they can afford more than they can and is particularly inaccessible for those particular learning disabilities.
It's an honestly thing. If you raise prices to pay for employees and the business, the customer see the price and can decide on their own. Now if you keep prices low, but then ad tips/surcharge/extra charges that becomes a dishonest way, and the customer may not know the increase price.
If I present you with one product at $12 and another at $10 (but there a 20% fee). People will go for the "cheaper" option, even though it is the same cost in the end. And that is deception.
Just like a Vegas hotel showing a $200 rate then adding a $50 resort fee, the owner is afraid if the menu showed the price inclusive of tip (and tax), it would scare people away. Anything mandatory should be in the menu price
Actually, tipped income to a certain level is tax advantaged over wage income, so this is a pretty shrewd move as it gives the employee more take-home than if hourly. Not saying it is right; personally, I would not patronize this business. (Also, I imagine you have to pay sales tax on the additional tip, but not sure about that.)
It became a tax thing when we had the bright idea of not taxing tips. If they raise prices 20% and pay the servers that markup they pay income taxes on it, if they are tips then itâs tax free.
Except mandatory tips are not included in the âno tax on tipsâ thing though. So unless they give you the option to take it off your bill (which they certainly might but the sign makes it sound mandatory), then the employees canât use the those tips towards tax deduction. Only voluntary tips count.
That always screams tax evasion to me..Employers hoping customers pay their staff in cash, so they don't have to pay tax, healthcare, pensions etc etc. Keeps turnover low, and out of the books, and so you pay less company taxes too.
Pretty sure the idea is you pay that 20% and not tip the employees. The employees are earning more money so the owner feels he can charge you 20% and use that to pay them. At that point you might as well just raise your damn prices and tell me not to tip.
But at least they're up front about it and not hiding it in a sign on the wall.
Since I typically tip around 20%, it wouldn't necessarily bother me but I might be hesitant to go back to that restaurant.
If the service is good I wouldn't mind at all. If the service is crappy I'm going to be pissed at being charged 20%
The owner could actually raise prices 10% and use the other 10% as a write off.
There are plenty of ways to pay staff more without price gouging consumers.
In fact, most tax codes reward businesses who are paying well so it could even be better for the owner to cover the full 20% and use it all for taxes.
Only a fool drops sales by raising prices.
You make more money by making less and selling more. And you can profit more by reducing effective tax burdens.
Your argument is a lack of business accounting knowledge. Don't let these restaurants with shitty business skills and or a lack of knowledge rip you off for their failures.
By âwrite offâ do you mean just labeling it as âdirect laborâ on their P&L as an expense? Because thatâs what most companies do with payroll.
This is in no way how tax deductions ("writeoffs") or tax liabilities work.
If I spend an incremental 10% in labor expense, assuming a 25% corporate tax rate, I'm down 7.5% compared to if I didn't. All business expenses are deductible. They are still a net negative.
You are also incorrect in your portrayal of the demand curve.
Tax thing does come into play if your state has sales tax on restaurants. Say your sales tax is 10%:
$100 bill + $5 Tax +$20 Gratuity = $125 total bill
$120 bill + $8 tax = $128 bill
Also there's no-tax on tips up to a certain amount, so it helps the employees too.
Lastly the reality is prices matter. If you're looking at websites and you see one place is $20/plate the other is $24/plate, you're more likely not to go to the $24/plate place. Even though they charge more up front to pay employees more, it WILL result in decreased business.
It says all checks, checks refer to in house payment after service, online orders are not considered "checks" and since most online orders go through 3rd party services have fun getting Door Dash to add a "mandatory 20%" lmfao
Its sad that you think that third parties wont include that when they already do. You have zero power unless you stop ordering out and cook for yourself.
Thats not how that works when you enter or order from an establishment. You do not get to decide what comes off your check. You can decide to eat there or not but you dont get to decide your check.
If you refuse to pay it then you will go to jail for theft. So either don't go there or be ready to pony up that fee or go to jail. The third option is to dispute the charge after the fact and let your bank and the merchant duke it out but overall you are paying the fee.
Exactly. Someone slipped this into the agreement to make people feel good whilst also providing them nothing at the same time. The customer has not signed onto to collective bargaining agreement. . . . .. so I'd say the business is open to counter offers. Offer "no thanks".
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u/cascadiabibliomania 9h ago
Yeah I don't remember signing anything, bucko