#### Comment Preferences

• ##### Regarding "service charge": true in many states(5+ / 0-)

This is true a lot more than you realize. Cruise lines, hotels, restaurants, etc. often add a service charge but do not pay it out.

Even in a state that requires you pay service charge out, what often happens is this:  a server in a restaurant works a private party event of say 50 people x \$40 per head = \$2,000, and a 20% service charge is added, making it \$400.

Now, the server is a "tipped position", so their initial tipped wage - minimum wage rate is \$2.13 per hour. Let's say 4 servers work the event for 4 hours. Ultimately, they have to be paid the regular \$7.25 minimum wage, so we have:

16 hrs x \$2.13 = \$34.08 tipped wage paid
16 hrs x \$5.12 = \$81.92 wages paid to bring them to the full \$7.25 per hour.

Now, the \$81.92 comes out of the \$400. In some states, it stops there, and management gets the rest.

Even in states where the whole \$400 has to be paid out, remember that the servers basic hourly wage is \$116 and this can be covered by the \$400, so really only \$284 is paid as a tip, for a 14.2% tip.  Not bad, but still, don't think you're paying a 20% tip.

Liberalism is trust of the people tempered by prudence. Conservatism is distrust of the people tempered by fear. ~William E. Gladstone, 1866

• ##### It doesn't work like that in NY(3+ / 0-)

At least not in my part of the state.  I made \$15-20 and hour all told.

I always wondered why people said waiters were poor.  If that's the way it works in other places, I can see.

There is truth on all sides. The question is how much.

[ Parent ]

• ##### Yes, NY has stringent laws on this(1+ / 0-)
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samddobermann

Call it what you will - service charge, gratuity, etc. - NY requires that it is paid out in full to the staff. There was a case about 5-6 years ago that clarified this and a number of NY restaurants, banquet halls, etc. had to pay up.

Liberalism is trust of the people tempered by prudence. Conservatism is distrust of the people tempered by fear. ~William E. Gladstone, 1866

[ Parent ]

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