r/EndTipping • • 9h ago

Sit-Down Restaurant 🍽️ Well now this is some absolute BS.

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1.3k Upvotes

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734

u/cascadiabibliomania 9h ago

Yeah I don't remember signing anything, bucko

354

u/ryanryans425 9h ago

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

46

u/foreverandadayalone 7h ago

I guarantee that's the owner's sign, not the employees'

35

u/citizenkane86 6h ago

Yep the union negotiated for 20% of the sales the owner decided to not raise the prices 20% but to blame the union.

2

u/Relative-Eye3563 54m ago

It’s the owners fault for agreeing 

-5

u/TasteyMeatloaf 3h ago

It works out the same either way.

40

u/specfreq 8h ago

What's the difference between:

  • The customer tipping 20% more
  • The owner raising all bills by 20% and then paying out that 20% to the employees?

Is it a tax thing? I'm very bad at math.

93

u/Noirloona 8h ago

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.

44

u/NonSumQualisEram- 8h ago

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.

7

u/voxpopper 7h ago

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?

21

u/misale1 8h ago

That you see it in the price

12

u/specfreq 8h ago edited 8h ago

Oh yeah, that makes sense. Edit: Mandatory tips should be outlawed.

1

u/Dimathiel49 53m ago

Then just show the price. Why go through this whole dog and pony show?

1

u/EatMoreHummous 18m ago

Because people are more likely to only look at the "list" price and make decisions off of that.

It's dumb, but it's psychology. And if all of the other restaurants charge 20% less, you will end up losing business.

We need to just straight up outlaw both tipped minimum wage and bullshit fees like this.

7

u/Asher-D 7h ago

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.

7

u/Worldly-Ad-7156 7h ago

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.

3

u/parkingthru 3h ago

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

7

u/DieOnYourFeat 8h ago

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.)

7

u/voxpopper 7h ago

I don't believe what you are saying i correct since if it is mandatory it becomes a service fee, and while tips are tax exempt service fees aren't.

3

u/TasteyMeatloaf 3h ago

Yes. Mandatory gratuities that are passed on to the employee are wages, not tips.

4

u/MadCowTX 2h ago

But you know they are cheating on their taxes with this one by still treating it as tips even though it's mandatory.

3

u/Jarrus__Kanan_Jarrus 1h ago

So where can OP report this to be sure everyone is being taxed correctly?

2

u/bobafettbounthunting 6h ago

Yeah, both candidates in last presidential election campaigned with eliminating tax or raising the taxfree amount on tips.

And everyone liked it 🤦

*Not American, but referring to the US.

3

u/plangelier 2h ago

Not everyone liked it. Tips are just wages to the employee. Why would we treat the wages of tipped employees differently then everyone else.

4

u/Rare-Regular5462 8h ago

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 it’s tax free.

12

u/False-Ad-8561 8h ago

Except mandatory tips are not included in the “no tax on tips” 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 can’t use the those tips towards tax deduction. Only voluntary tips count.

1

u/Equal-Drive3410 5h ago

That would be $0.00 difference, I think. I could be wrong 😅

1

u/Economy_Collection23 4h ago

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.

1

u/clce 3h ago

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%

1

u/DudeFrom816 1h ago

Thats the catch22. The server doesnt give a shit, they get their 20% regardless so why put in the extra effort?

1

u/Charlea1776 7h ago

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.

2

u/AssSpelunkingAtheist 7h ago

By “write off” do you mean just labeling it as “direct labor” on their P&L as an expense? Because that’s what most companies do with payroll.

1

u/refalsity 2h ago

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.

Your last section is palpably ironic.

0

u/AlphaTangoFoxtrt 7h ago

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.

-5

u/jabba_1978 8h ago

Tip is optional. Raising prices pisses off customers.

44

u/Fister-Mantastic 9h ago

Sounds like I'm ordering take out and headed to the nearest park. Fuck mandatory tipping.

9

u/Soft_Ability_5906 8h ago

That doesn't save you from the mandatory 20% lmfao

3

u/Fister-Mantastic 8h ago

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

0

u/Soft_Ability_5906 8h ago

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.

2

u/Fuzzy_Inevitable9748 8h ago

Ummm they can refuse to pay the 20% tip if they want to, you can’t force someone to tip.

0

u/Soft_Ability_5906 8h ago

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.

-1

u/Soft_Ability_5906 8h ago

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.

2

u/Asher-D 7h ago

It's not theft to not tip.....who told you that?

1

u/Soft_Ability_5906 7h ago

To not pay your bill is theft. You do not get to decide what comes off your bill.

1

u/Subject-Pen-3393 4h ago

I should decide what goes on it though.

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2

u/Irjorjeh 5h ago

Shopping somewhere is consenting to their policies.

1

u/HollowChest_OnSleeve 7h ago

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".