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LolaCocaCola
06-01-2002, 09:42 AM
How is it the restaurant industry gets away with paying below minimum wage (I think it's like $3 per hour) to its employees and not provide (for the most part) a group medical plan and paid vacation time?

A lot of restaurants, especially in Manhattan, make millions of dollars a year in profit.

Why is it left to the customer to pay their employees (in tips) when other businesses have to provide a living wage, paid vacation and group medical coverage?

PhiloVance
06-01-2002, 10:35 AM
I don't know where you live, but in the US I think minimum wage is 5.75 or something. It's illegal to pay less than this for any job. In California I think the minimum wage is about 6.25 or so.

It was my impression that TIP originally meant 'to insure promptness', but I could be wrong. It apparently became a habit and just stuck around. Tipping is now codified in the Internal Revenue Code in that if you're classified as a waiter/waitress, 8% of your income is considered tips and as such is taxable, whether or not you get tipped that much.

I have to agree with you that the restaurant industry takes advantage of the situation and pays as low a wage as they can and gets away with it. I also personally think this is counter productive as you spend a lot of time training people.

My wife and I go to restuarants here in town quite a bit since we're now older and have no kids at home. I usually tip 15-20% mostly because we know the people we're tipping and respect the fact that they're not getting paid as much as others. Out of town, it depends on the service provided.

In a kind of hijack, does anyone tip at self serve places (fast food, cafeteria style) where there's very little waiting involved?

Another hijack, I dig your user name. ;)

Shagnasty
06-01-2002, 10:43 AM
Originally posted by PhiloVance
I don't know where you live, but in the US I think minimum wage is 5.75 or something. It's illegal to pay less than this for any job. In California I think the minimum wage is about 6.25 or so.


Oh you just couldn't be more wrong on this one although you are correct about the California part. Wait staff and other "tipped" employees most certainly get paid less than the minimum wage by the restaurant or bar in most states. The federally madadted minimum wage for these employee's is $2.13 an hour. Sometimes I wonder why they even bother and just make it $0 to admit that it is not worth anything and tips are why the waitron works there.

Here is a break-down by state:

http://www.dol.gov/esa/programs/whd/state/tipped.htm

There are kinds of different (lower) minimum wages for all kinds of businesses as you will see.

LolaCocaCola
06-01-2002, 10:47 AM
Thanks for the compliment, Philo :)

Shag is right, restaurant workers (i.e. waiters) usually make less than $3.00 per hour and after the taxes get taken out, their paychecks are usually "voids" and generally they owe thousands of dollars in taxes each year.

Athena
06-01-2002, 12:02 PM
Originally posted by LolaCocaCola

A lot of restaurants, especially in Manhattan, make millions of dollars a year in profit.


I'm no expert in the restaurant field, but this figure seems pretty high. I looked into going to cooking school once, and the salary they quoted for a top chef who owned one successful restaurant was about $80K/year. Of course, we're not talking celebrity chefs like Emeril or Wolfgang Puck - we're just talking a reasonably successful restaurant.

peepthis
06-01-2002, 12:07 PM
The law states that if an employee, after tips, doesn't make the minimum wage, then the employer must pay the difference to the employee. So if a waiter is making $2.13/hour, and makes zilch in tips, technically the restaurant must pay the waiter the extra $3 and change in salary. In this way, you're guaranteed by law to make the minimum wage.

Getting that extra money out of an employer would be the hard part though.

Janx
06-01-2002, 12:50 PM
If all this is true, why in the hell would anyone EVER work
in a restaurant? Talk about slavery, JEEZ! (no insult intended,
I just didn't know waitrons were *SO* taken advantage of)
seems to me for the same skill level one could find a job
in retail or something.
I may be wrong, so, tell me are the tips that good.

BTW - my sister has been picking up tables at places like
Denny's for years, let me tell ya, with prices like those
of a coffee shop - tips ain't much, and yes, I always ask her
"Why the hell do you work in places that?!?"

As for the OP:

Here in Brazil, only in "Fancy" restaurants do you tip, then
its just conveniently added to the bill for you
(15%- and I dont think the waitron gets any
unless you press som raw cash directly into his/her hand). In
smaller Luncheonettes tipping is not expected, except at
Christmas time when regulars are shamelessly asked to
contribute to the "Caxina" (little box), and EVERY ONE
gets in on the act, I'm talking about even the municipal
street sweepers and postal workers, it's also (often not very
vaguely) implied that this is to ensure the same level
of service in the coming year. If you don't tip something
you are generally regarded as pond scum and had better not
ask for anything resembling service in the coming year,
that will teach you!:p

LolaCocaCola
06-01-2002, 12:55 PM
Originally posted by Janx
If all this is true, why in the hell would anyone EVER work
in a restaurant? Talk about slavery, JEEZ! (no insult intended,
I just didn't know waitrons were *SO* taken advantage of)
seems to me for the same skill level one could find a job
in retail or something.
I may be wrong, so, tell me are the tips that good.


Well, in decent restaurants the waiters can make between $150-$200 a night in tips. Considerably more than what one makes working retail, but once again, the customer pays for it, NOT the employer.

Hari Seldon
06-01-2002, 01:06 PM
I read somewhere recently that tipping started in the US around 1900 and was at first considered demeaning. I agree. In Europe, they either include "service" in the price or add a stated fixed amount. I much prefer that. Apparently tipping, when it started was 5-8%. By mid-century, it had grown to 10%, which was at least easy to figure. Then people told me that 15% was standard. Now it seems to be 18-20%. It is getting a bit ridiculous. And it is demeaning, besides. Yet what would happen if a restaurant decided to simply build the service into the price? Well, their prices would look 20% higher than their competitors and many people would insist on tipping anyway. Sheep. In Europe, some people leave the small change. In Japan, you pay at the cash and there is no tip. Much more hygienic since you don't have the same person handling the food and the filthy (literally) lucre. In 1950 most US restaurants were like that (although there was tipping, you paid at the cash), but then it became upscale to mimic the European system of having the waiters collect the money and now almost everybody does it.

I wonder what would happen if someone opened a restaurant and put up big signs saying that, in the interests of hygiene, the waiters were not permitted to handle both food and money and therefore, (1) ALL service charges were included, (2) Tipping is strictly forbidden, and (3) Bills were to be settled at the cash. Of course, the tax people would have to be convinced not to add 8% in such cases. They ought to welcome it since I believe that tips amount to much more than 8% of income. In fact, from the posts, it sounds like tips are more than 50% of income.

Janx
06-01-2002, 01:21 PM
From LolaCocaCola:
in decent restaurants the waiters can make between $150-$200 a
night in tips.
Well, I stand corrected, I might think $150-$200 bucks a *night*
qualifies as good. I'm in the wrong business.

Do I have to go to some kind of school for snobby
waiters to make that kind of money?

Oh, and your point about the consumer taking up the
slack for the owners is well taken.

zen101
06-01-2002, 01:37 PM
Frankly there is entirely too much tippingh going on. I feel obliged to tip waitstaff no matter what the quality of service is/was, tipping beyong my actual means if the service was exceptional.

Gratuity should be regarded, in practice, as a form of "thanks". If you recieve sub-par, rude, or otherwise shirty service then tipping should be passed upon.

Certainly there are people who would lose a large portion of income if tipping only ocurred when they actually did a good job, but then maybe they shouldn't be in this industry. I have many times gotten excellent service at fast-food resturants, but those people are forbidden from accepting tips (usually by corporate policy, and in the case of McDonalds California law prohibits it because employees didn't get to keep them).

as for the etymology of the word "Tip":

The popular explanation of the origin of tip, meaning a gratuity, is that it is an acronym meaning "to ensure promptness." This is incorrect.

Tip is underworld cant meaning to pass on, to hand to, especially to pass on a small sum of money. It dates to at least 1610. The verb meaning to give a gratuity dates to about a century later, and the noun dates to at least 1755. And as we've seen many times in these pages, there are no pre-20th century acronymic word origins. (wordorigins.com)

manhattan
06-01-2002, 01:46 PM
I sentence each of you to 20 minutes in the archives.

Cecil Adams on the origin of tipping (http://www.straightdope.com/classics/a1_333.html) .

chula
06-01-2002, 01:51 PM
$150-$200 a night is in a fancy restaurant in a big city. I worked in a pretty upscale place in San Francisco and $100 was about average. Keep in mind that in a large restaurant, the server has to "tip out" her busboys, food runners, bartender, host, and everyone else, and ends up keeping less than half of the tips received. As someone who has worked as a waitress and has lots of friends in the restaurant industry, I think the practice should be done away with. The size of tips received has almost no correlation to the quality of service. It was always the difficult customers who received great service who would undertip, while the nice customers would give me great tips even if I screwed up. The size of the tip is a reflection of you, the customer, not me, the server.

wring
06-01-2002, 02:01 PM
The real reason we tip in restaurants is so next time we come, we don't have server's fingers in our food.

Shag one of the practical reasons for insisting that the restaurant does pay 'some' real wage in addition to the tips, is that it provides for some documentation of wages (IRS, SS both need this) and it also provides for a mechanism for the IRS, states etc. to get their income tax paid through withholding.

When I've seen server's pay stubs it looks like this:

# hours x $ 2.35= xx.xx
plus tips reported YYY.00
= Gross wages BBB.xx
less FICA
less Fed w/h
Less State w/h
Less Local w/h
= net pay
**Paycheck amount would be the X hours x 2.35 minus all of the deductions listed.

And, the servers I knew all made substantially more in tips than what were reported. $100 a day wasn't uncommon, even in places like BigBoy, Bill Knapps (family style restaurants, average meal about $8)

cleops
06-01-2002, 03:12 PM
Originally posted by wring
The real reason we tip in restaurants is so next time we come, we don't have server's fingers in our food.


Huh? Only if you go to the same restaurant numerous times and strike up an acquaintance with a wait"ron" (waitron ??--that's a new one on me!). Nearly every time I go to a restaurant I don't know the waitrons from Adam or Eve, nor do they know me from Hector and his pup, and I tip because that's the damn custom; the waitrons (hey, I like that word) live on that money, so I feel it's only right to fork it over. Cripes, that's part of the deal when you go out to eat. Not too difficult to understand.

PhiloVance
06-01-2002, 04:01 PM
My son-in-law worked at the Red Lion dining room, I believe the name of the restaurant was Mistys, sort of a fine dining place. He had one customer, a heart specialist, who would come in and give him $50 up front, I guess, to insure promptness. My son-in-law was a good waiter, so it wouldn't have matterd, but it was nice. And yes a normal day was about $100, weekends were about $150-200 in tips. Nice money, but you have to work hard for it. Also, busboy, bar people, etc. all get a portion of your tips. There's a scale (percentage) for figuring this out.

Yeah waitron :confused: is a new on one me also.

Hey, Cecil confirmed the meaning I gave for TIP but it sounds like an urban legend. ;)

Janx
06-01-2002, 05:37 PM
about the word "waitron" - got it from a radio
show in Los Angeles in 1997, the segment was on political
correctness run amok - I thought it was cool, and pleasing
to the ear for "PC" so I use it

by Chula:
It was always the difficult customers who received great service
who would undertip, while the nice customers would give me great tips even
if I screwed up. The size of the tip is a reflection of you, the customer, not
me, the server.

I have to agree:
Many moons ago I was a bell hop at fancy-schmancy
hotel in Santa Barbara CA., whenever I sensed the client was a jerk
I always tried to do a bit better - NOT - because I was hoping for
a better tip, but because I understood that the likelihood of them
complaining to my boss was much higher, and that sort always tipped
for doo-doo, then there was the average folks out on vacation, I gave
good service but didn't over do it - and ALWAYS came away with a nice
tip, I feel they wanted me to know them as nice people, that goes
for me too, I tip in such a way that I don't want the staff (or my
friends) to think I'm a jerk.

A story/example: There was this guy
staying in the presidential suite - waiting for the limo to take him
to his wedding, a button popped of his shirt and he freaked!, he
called the bell desk asking for me, I hied myself to the gift shop, grabbed
a sewing kit and put the the thing back on just the way mom taught
me, 10 minutes MAX, and a nice diversion to boot! he tipped me $100,
His buddies were *very* impressed with this. I told the guy that this
was totally un-necessary because when he came in last night
he had already "taken care of me" but he insisted (guess he didn't want me or
his friends to think he was a skin flint)- and yes, I gave the girl
in the gift shop $25 bucks.

tarokaja
06-01-2002, 10:14 PM
Just BTW, here in Japan ther's basically no tipping at all. Very fancy places sometimes add a service charge to the bill, but most restaurants don't even do this. I've heard that this is similar elsewhere in East Asia as well, though I don't really know.

tarokaja
06-01-2002, 10:15 PM
Meaning "there's", of course. Please excuse me, I'm having a bad typo day today :eek:

Derleth
06-01-2002, 11:26 PM
'Waitron' sounds like an interesting word in the same vein as Southron, another construction rarely heard today.

Except in old songs, that is:Dixie's Land



Southrons, hear your country call you!
Up! Lest worse than death befall you!
To arms! To arms! To arms! In Dixie!
Lo! The beacon fire's lighted!
Let our hearts be now united!
To arms! To arms! To arms! In Dixie!

Chorus:

Advance the flag of Dixie!
Hurrah! Hurrah!
For Dixie's land we'll take our stand
to live or die for Dixie!
To arms! To arms!
And conquer peace for Dixie!

How the south's great heart rejoices
at your cannons' ringing voices!
To arms! To arms! To arms! In Dixie!
For faith betrayed and pledges broken,
wrongs inflicted, insults spoken.
To arms! To arms! To arms! In Dixie!

If the loved ones weep in sadness,
victory shall bring them gladness;
to arms! To arms! To arms! In Dixie!
Exultant pride soon banish sorrow;
smiles chase tears away to-morrow.
To arms! To arms! To arms! In Dixie!To a famous tune. :)

Heah fo three versions of 'Dixie'. (http://www.customcpu.com/personal/pir/songs/dixie.htm) (Southern, Northern, and Recruitment. :))

Torus
06-01-2002, 11:32 PM
Originally posted by Janx
If all this is true, why in the hell would anyone EVER work
in a restaurant? Talk about slavery, JEEZ! (no insult intended,
I just didn't know waitrons were *SO* taken advantage of)
seems to me for the same skill level one could find a job
in retail or something.
I may be wrong, so, tell me are the tips that good.

A few things to add here. First of all, the people who take jobs with tips are the smart ones. During high school and college I worked at hotels - all of which had restaurants - and I made the mistake of going for the front desk type positions. I made a measely 6 or 7 bucks an hour, and got to listen to every whiney, bitchy, !*%^%$#! who didn't like how the shape of the toilet seat fit her oversized ass. Meanwhile the bellmen and waiters walked out every night with a pocket FULL of cash, and directed any problem customers to the front desk so they could air their greivances. At certain times there were automatic tips set up - such as when buses of tourists came in, and they made even more money.

Thankfully I'm long out of the hotel business, but my little brother was pressured by our parents to get his first job at age 17 this year. I begged him to get a job as a waiter, rather than the retail positions he was looking at. He got a job at Ruby Tuesday's and just recently told me that his peers who work at Marshall Fields in the same mall come in for lunch and look down their noses at him. Since he applied for those jobs he knows that they are making 7 bucks an hour while he's pulling down 14 an hour on average with his tips. He's loving it. Now I'm trying to convince him to take a job at a higher priced restaurant.

So, yes, tips are that good and it isn't slavery by a long shot.

Back to the OP, I know that restaurants are very difficult to run profitably. I've been told that a large number 90% of new restaurants go out of business quickly.

This site says 87% go out of business in the first two years.

http://199.45.202.146/Business/biz516.htm

Most hotel restaurants lose money hand over fist. They only stay open because people won't pay as much to stay in a hotel that doesn't have food service. The hotels make money on the rooms, generally.

So perhaps this is the reason for the lower minimum wage for wait staff...who then need to be compensated by tips. If restaurants had to pay the full minimum wage, even fewer would be able to stay in business.

Then we'd all be eating out at McDonald's.

mmmiiikkkeee
06-02-2002, 01:53 AM
In my Canadian city it depends on the place whether the tips are shared or not - mostly not. When my mom worked as a waitress, she would even sometimes see servers swipe the tips off a table that another person was waiting on as they went by... scumy? - yes, would anyone ever admit to doing it? - no, but many people (as some posters here have reflected) do that job for the money, not for life experience or to pad their resumes; hence my usual custom of watching to see that the server is in fact the same one who picks up the dishes, then putting the tip under the side of the dish or some other not-so-visible place so it's less likely to be swiped by another employee.

Yes, the tips do end up being as much and often X times the hourly wage, especially when working full-time at a higher end place. In my job as a tax preparer this past season, I did a few returns for restuarant employees. Here, you have to report the actual amount you got in tips, or at least make up a number that looks plausible. This year in particular CCRA is auditing these types of workers, and we have in our manuals that tips usually make up 100-400% of their income, and isn't reported on tax forms, so that's the number we ask about reporting.

Of course due to the first bit I mentioned, not everybody here working in a restuarant makes tips, such as busboys, cooks, dishwashers, etc. I saw many people with T4's from 2 or 3 restuarants or bars, and of course EVERYONE'S a dishwasher or cook and don't get ANY tips at ALL when you ask :rolleyes:. I actually thought it was kinda amusing to see them think I actually beleived them when I get the same story 95% of the time... see this 6' georgous 22 yr. old blond in fancy cloths and a leather jacket looking like she just walked off a movie set with 3 tax forms from the most popular bars in town known for having hot waitresses like her and watch her try to convince me she's a dishwasher and only made $8000 last year... somemtimes it was hard not to giggle. But we did the returns like they wanted, and if they get audited, that's their problem............

(:D my job was boring, but had good parts too :D)

wring
06-02-2002, 01:47 PM
Originally posted by cleops

Huh? Only if you go to the same restaurant numerous times and strike up an acquaintance with a wait"ron" (waitron ??--that's a new one on me!). Nearly every time I go to a restaurant I don't know the waitrons from Adam or Eve, nor do they know me from Hector and his pup,

Really? my experience is quite different - we've had servers come across a restaurant and say "hey, didn't I wait on you over at Ruby Tuesdays?" Just last night, we were at a 'major chain' (where we hadn't been in several months), and the server recognized us from his last encounter w/us. (of course, we actively engage in conversations w/them. "hi my name is Justin, I'll be your server tonight. " "Hi, we're Wring and Snookie, we'll be your obnoxious customers for the evening" )

Chronos
06-02-2002, 02:56 PM
Why is it left to the customer to pay their employees (in tips) when other businesses have to provide a living wage, paid vacation and group medical coverage?I'm surprised that nobody else has addressed this yet. If the business were providing the living wage, then we, as customers, would still be paying the same amount for it. Where do you think that the restaraunt gets the money they pay to the employees?

Bromley
06-02-2002, 07:53 PM
Originally posted by manhattan
I sentence each of you to 20 minutes in the archives.

Cecil Adams on the origin of tipping (http://www.straightdope.com/classics/a1_333.html) .

I'd feel better about my sentence if Cecil had addressed the difference between Ensure and Insure, not that that was the main point.

As for your crazy American system for tipping someone to take the cap off your beer . . . :) .

missbunny
06-03-2002, 09:19 AM
Originally posted by LolaCocaCola
(snip)Why is it left to the customer to pay their employees (in tips) when other businesses have to provide a living wage, paid vacation and group medical coverage?

I'll skip the living wage part, as others have addressed, it but will add in that no U.S. business - restaurant or otherwise - is federally obligated to provide paid vacation or group medical coverage.

Balor
06-04-2002, 11:45 AM
To most Europeans, the American obsession with tipping is amazing. I have been fascinated by the detailed discussions - how much do you tip if the service is lousy, how much if it's good?

I remember being pursued for a tip by an American waiter, who had given poor and rude service, and should have paid me to stay in his restaurant.

If service is lousy, Europeans don't tip. We see the tip as a gift, a reward for good service, not as some kind of contract between us and the tippee. If someone gets no tip, he/she will serve better next time - or ask for better basic pay.

As previous posters and Cecil have indicated, most restaurants here add a service charge. If they do not, they explicitly say so, and leave it to you to decide what to give. If we give something, we estimate about 10%

Apart from restaurants, tipping is rare. Our view is that people are already being paid to do the job. If they are not, they should change jobs soonest.

LolaCocaCola
06-04-2002, 12:22 PM
Originally posted by Torus


Back to the OP, I know that restaurants are very difficult to run profitably. I've been told that a large number 90% of new restaurants go out of business quickly.

This site says 87% go out of business in the first two years.

http://199.45.202.146/Business/biz516.htm

Most hotel restaurants lose money hand over fist. They only stay open because people won't pay as much to stay in a hotel that doesn't have food service. The hotels make money on the rooms, generally.

Well, then how do restaurants in non-tipping countries manage to stay afloat? Maybe we should follow their business model.

And to all the foreigners who come to America and don't tip (especially after having read what a server's base salary is), my advice is - don't go out.

rjung
06-04-2002, 12:29 PM
Originally posted by LolaCocaCola
Well, then how do restaurants in non-tipping countries manage to stay afloat?
Higher prices?

LolaCocaCola
06-04-2002, 12:35 PM
Hey, I wouldn't mind paying 15-20% more if it was included in the price of a meal and it meant no tipping. Much easier that way.

RiverRunner
06-04-2002, 12:52 PM
Originally posted by LolaCocaCola
Hey, I wouldn't mind paying 15-20% more if it was included in the price of a meal and it meant no tipping. Much easier that way.

I'll second that. Now, how can we take this righteous crusade to the Pipples?


'Waitron' sounds like an interesting word in the same vein as Southron, another construction rarely heard today.

Another one is Westron, for you Tolkien geeks. You out there, Fenris?
:)

RR

Chronos
06-04-2002, 04:02 PM
Another one is Westron, for you Tolkien geeks.Except that's a name of a language, not a group of people.

Acsenray
06-05-2002, 03:24 PM
I also would much prefer to be charged a flat service fee on my bill rather than having to mess with this silly tip business. Basically, it amounts to nothing more than a way to piss of my server.

Anyway, I always wonder about the lunch buffet. I don't think I should have to tip a full 15 percent, when I'm doing more than half the service myself, but I don't have the guts to tip lower.