“Hold on,” you say to yourself—”If it’s a gratuity, doesn’t that by definition mean it goes to the wait staff?” Not if you’re a server for World Yacht, a “luxury dining fleet” in Manhattan that will now be sued by its employees for slapping automatic gratuities on diners’ bills, then keeping the extra money for itself. New York labor laws require “employers to pass on to workers any payments that customers understand to be tips,” but World Yacht argued that the banquet industry was exempt, and its servers should get nothing. Thanks to last week’s ruling, the employees can move forward with their suit.
Almost a year ago, a New York Appelate Court said that the company only had to share “voluntary” tips with workers, not automatic ones. Last week, however, the New York Court of Appeals overturned that ruling and said World Yacht had to share the tip bounty.
Oddly, though, they left an earlier verdict stand that found the company did not engage in deceptive consumer practices by collecting gratuities and then not distributing them to employees. It’s funny, because we always thought the price of a meal/room/whatever was what the company collected, and tips and gratuities—however they’re collected—were intended directly for the person doing the work. Redirecting that money anywhere else without advance warning certainly seems deceptive to us.
(Thanks to Nelson!)
“Court of Appeals rules in favor of luxury dining fleet servers” [Newsday]
(Just to be clear: we doctored that image.)
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@forgottenpassword: Automatic gratuities should only be used for large parties. A single large party can take up an extremely large portion of a server’s time. If that party decides to stiff the server, then it’s a huge blow to his/her weekly takings. This happened a couple times to a friend of mine, she had a tough time making rent one month because two large parties stiffed her (and she’s a good server). She was out $200 for the month because of it. An automatic gratuity puts in some protection from that happening.
Granted, those gratuities should be able to be protested and removed/reduced if the service was poor.
@kable2: Waiters don’t have hard jobs? I don’t think you know any waiters.
Why does any post about tipping anywhere on the internet always degenerate into the same stupid arguments?
@Jon Parker: Because idiots like kable2 always show up and loudly proclaim their ignorance, then insist that everyone explain to them exactly why they are so effin’ ignorant.
kable2: this PDF file explains the situation (at least for Massachusetts, but other states are the same). Minimum wage is $7.50, but “Wait staff, service employees and service bartenders may be paid the service rate of $2.63 per hour”. That’s barely a third of minimum wage. As a Consumerist reader, you know that any business is going to pay as little as the law allows.
I’m all for the tipping, if the service is deserving. However, I’m not so sure these staff members were officially service personnel as defined by the law. If they were making above minimum wage, and their employment agreements do not specify their ability to earn tips as part of their income, then they are not.
Everyone is right, service personnel, especially those who are being paid less than minimum wage, deserve tips when their service is proper. 15% should be the minimum for normal, quality service. Going above and beyond should warrant more.
I think the bigger problem here is charging this “so-called” gratuity to customers. You can’t label it a tip or gratuity when it is actually a catering fee. I’m sure they don’t want to call it that, but if it’s not going to the wait staff, that’s exactly what it is.
Either label the staff service personnel and pay them appropriately, factoring in gratuities-eligibility, or stop collecting a “gratuity” from customers when it’s really a catering fee. Being deceptive just earned them a big fat lawsuit.
Waitering is a demanding job for sometime idiot customers. In fact there is a whole subset of websites about the deal:
[bitterwaitress.com] etc
Bigger issue than the proper tip here…
This is another example (an a pretty good one) about the disappearance of transparency in pricing by service companies from cell phones to rental cars to airplane rides. This company added a “fee” to people’s bills and kept the money for additional profit. Thats the trend. Companies can’t even be honest about their price anymore.
BTW- I hope the employees win their suit and punitive damages.
Minimum wage for hospitality workers in NJ (ie people who can expect enough tips to make up the difference) in NJ is $2.18 an hour. $2 an hour. AFAIK, businesses are legally required to cover the difference if a server doesn’t make minimum wage after tips and pay are combined, but why do that when you can just pass the cost on to the customer?
I didn’t work for that wage, but I know somebody who did, and it’s really messed up to stiff somebody who’s gonna get a $0.00 paycheck b/c he’s being taxed on his $2 wage AND his tips.
@lovelove:
Ooooooh, the wrath of a waiter scorned!
I have no qualms about “stiffing” waiters or waitresses who provide shitty service.
The last time I did this it was because the waiter brought the wrong bottle of wine to our table. He had opened the bottle in the kitchen and proceeded to beg us to accept the wrong bottle because “it would come out of his pocket”. I refused and was then treated to the shittiest service imaginable. The waiter actually chased us out of the restaurant saying we had “forgot” the tip.
I went back inside and had a long chat with the manager after which I had the satisfation of seeing the waiter sent home.
And by the way, if your restaurant give me bad enough service to not tip you or to under tip you, I will not be returning to give you the oppurtunity to spit in my food.
I’ve worked in the service industry for 20 years. I tip 15-20% with the following exceptions.
1. A bartender gives you presumptuous change (i.e. the drink is $10, you pay with a $20, and he gives you back two fives). Zero tip (unless i have ones in my pocket), or tip on the next round.
2. I have been given free drinks (or long pours) or food (then I may give an additional tip amount equal to about half the normal price of the freebies).
3. I have received poor service that i have carefully deduced is purely the result of server incompetence or laziness (not because the kitchen is backed up or the server is slammed). 5% or zero tip.
Eating in high quality restaurants is an entertainment and relaxation event, folks, not just food. There is a big difference between the entertainment value provided by career servers and douchebags at applebee’s.
“And the cheap tip that you leave that won’t even give me one tank of gas?”
What?! Do you know how much a tank of gas costs? I’m supposed to leave a $30-$40 tip now or I’m cheap?
Get real!
Please note that Kable2 does not speak for all of us who were short-order cooks in high school.
@balthisar: Long story short – We colelctively tipped our server at a wedding ($50). He was bringing our table drinks two each at a time while the other tables were barely getting their water.
@bbbici: 1. A bartender gives you presumptuous change (i.e. the drink is $10, you pay with a $20, and he gives you back two fives). Zero tip (unless i have ones in my pocket), or tip on the next round.
Egad… I would always be sure to include singles in the change I gave SPECIFICALLY for that reason and even go so far as to trade the singles in my tip bucket for bigger bills to ensure I would not run out of singles.
A little off topic but why do ALL places now have some sort of tipping jar? I find it annoying.
I usually tip above 20% because I would feel like a cheapskate afterward but reading all the comments here I’m going to try to tip according to service. Quick question, what is considered good service? If they come by asking you how everything is and have your drinks refilled when low considered normal service or good service?
@MercuryPDX:
Precisely, as any non-asshole bartender should.
@jaewon223:
Good service means everything went smoothly and you didn’t wait long to place your order, receive your bill, drinks, etc. 15%
Great service means that the server was charismatic, knew the product thoroughly, and made excellent suggestions, plus the above. 20%
Outstanding service means the server has pulled a Radar O’Reilly and intuitively gives you what you need without your asking for it, gives you freebies, flirts if appropriate, plus all of the above. >20%
Everyone is missing the point. Tipping is just another way for the business owner to make more money. You are putting money in the owners pocket by allowing them to pay less than a living wage. Thus, passing on there responsibilities to you via the guilt trip. It is a nice scam should you buy into it. I travel 6 months of the year outside of the US. The only country that seems to have a tip culture is the US. NO other country is tipping expected. (tourist areas excepted)
The rest of the world believes that it is the business owners responsibility to pay his workers a fair wage for work. Many countries it is an insult to tip. The workers are proud of there work an are insulted if you believe you have to tip to get good service. Tipping in the US should be abolished and all workers should come under minimum wage laws.
@Feemsteer: Tipping is expected in Mexico. I’ve been all over the country, but not to the tourist areas, and tipping is definitely expected.
Canada is another country that’s foreign to us, and tipping is certainly expected there, as well.
In Germany it’s not expected that you leave some trinkgeld, but it’s appreciated.
To anyone who thinks that tips are a scam, this is the way I see it:
Workers who make tips work for below minimum wage, which means that the customer dictates how much the worker will make. If the worker sucks, they will probably get tipped less, if they are good they will probably get tipped more. Sounds fair to me. Think of how much nicer and expediant the service at the DMV would be if the workers there were paid with tips!
And, if you think that the employer is getting out cheaper, and profiting more, think again. As with anything in a fair market, full of competetion this takes care of itself. Profit margins in the hospitality industry are very low.