Police Drop Theft Charges Against Pub Non-Tippers

Police in Bethlehem, Pennsylvania, are withdrawing charges against the two college students who refused to tip at a pub last month, says The Morning Call.

The Northampton County District Attorney, John Morganelli, first found out about the arrests in the news, and made a recommendation last week that the charges be dropped. “I had recommended that the case be withdrawn, but that ultimately was a decision of the Bethlehem Police Department,” he told the paper.

The manager of the pub sounded a bit surprised at the news:

Lehigh Pub manager William Sheehan said Monday it was “news to him” that the charges were being withdrawn.

He read a comment he said was written by the pub’s attorney.

“We do not agree with the facts as presented in the press last week,” Sheehan said. “This is the subject of an ongoing investigation by the Bethlehem Police Department, not Lehigh Pub, and we will defer to them as the legal process plays out.”

One issue that was brought up last week, and is mentioned in this article again, is that the gratuity worked out to about 22% of the bill, and not the 18% that the pub claimed. Whether that’s explained by error, greed, or some detail that hasn’t yet been revealed, it’s a good example of why you should always calculate the tip yourself and make sure it matches what’s on the final bill.

“DA: Police to withdraw theft charges against non-tippers” [The Morning Call] (Thanks to Jason!)

RELATED
“College Students Arrested For Refusing To Pay Tip”
(Photo: [puamelia])

Comments

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  1. Darrone says:

    Does this guy really think that its best for the pub to have these guys arrested and prosecuted for 22% tip? Is this his long-term strategy? By now he must know he is going to lose business over this, his yelp reviews, etc. Why not say “big misunderstanding! Come have a free beer with me and we will discuss it.”

  2. VidaBlueBalls says:

    How many more interviews before Mr. Sheehan screams, ‘I drive a Dodge Stratus!” My money is on 22, because it’s apparent that 22 is the new 18…percent.

    • mirathi says:

      I am a Division Manager!! That is very important!! That is very important!! You don’t talk to me like that!! People are scared of me!!

  3. htowninsomniac says:

    If the 18% gratuity for large parties is stated in the menu, then it is a service charge. The diners can agree to it and eat, or not agree and leave. Technically this was “theft of service”.

    I agree with everyone, though, that this was a really bad idea by the pub. They will lose a lot more than the $10 now. Instead, they should have apologized and given the students “buy one, get one free” or “$x off $y” coupons to come back.

    • JohnDeere says:

      @htowninsomniac: technically it was the patrons who had their service stolen. thats why they left no tip.

    • yesteraeon says:

      @htowninsomniac: Hogwash! The patrons agreed (by seeing the notice of the mandatory service charge and not leaving) to pay that service charge. However, the pub did not deliver what they promised in exchange for that charge (i.e. reasonably good service). The pub didn’t hold up their end of the bargain, so there is no obligation on the customers to uphold theirs.

    • djanes1 says:

      @htowninsomniac: How could they steal service when they did not receive service? It is like getting charged for jalapeno poppers they ordered but did not receive.

    • coren says:

      In which case, there would have been tax calculated on it too – whatcha wanna bet there wasn’t?

    • Tiaris says:

      If it is going to be mandatory, a service fee if you will, then it needs to be named as such on the menu. Using the word “gratuity” – by its own definition – states that whether the establishment wants it to be mandatory or not, it is optional.

      They should amend their menu to state that a mandatory 18% [22%?] service fee will be added to the bill for parties of 6+.

      • Brontide says:

        @Tiaris,

        +1

        Gratuity, by definition, can not be demanded. If the bar had listed it as a “service fee” then it could be demanded. Short of a signed contract in advance a “gratuity” is just that, a favor or gift given for good service.

    • West Coast Secessionist says:

      If it was for large parties, why does it say the TWO students who refused to pay the tip?

  4. Tim says:

    I guess I’m in the minority here, but if the pub charges a fee for large groups, and that fee is publicized, I don’t see how not paying it is anything other than theft.

    Want to have a discussion about whether or not these required “gratuities” should exist? Sure, let’s have that discussion. But as far as I see it, these people received a bill for a product and service that they used and new the prices of before using. Bad service or not, they should pay up.

    • Pixel says:

      @TCama: Even if we assume the gratuity was a requirement, it was for the service, not for the food. If they did not receive proper service then they are being charged for something they did no receive.

    • Megalomania says:

      @TCama: what counts as publicized, exactly? Unless the server said “By the by, you have to pay 22% extra no matter what” before they got the chance to order everything, then no, that is not publicized.

    • Red_Flag says:

      @TCama: But the restaurant also would have committed theft by publicizing a gratuity of 18% but really charging 22%, wouldn’t they? Corporate policy is not law — as is evidenced by the dropping of charges against the students.

    • Roclawzi says:

      @TCama: The question is whether or not good service is required after it is put on the bill. If they had something tangible on their bill that they did not receive, like a round of drinks that never came, no one would blink over their refusal to pay that portion of the bill. But since good service is what the gratuity was for and they feel they didn’t get served well, shouldn’t they have the same right to say they didn’t get it?

      And since service is subject to opinion, and if they had gotten *none* they wouldn’t have any food or drink at all, let’s go back to that comparison to a round of drinks…if they had gotten drinks that were half full, would it be appropriate to charge them for the whole drink, half price, or nothing at all?

      I think that the “contract” about the 18% grat implies quality service. I don’t expect juggling bears, but there’s got to be attention paid.

      And juggling bears get tipped 24% or someone gets mauled.

    • ktjamm says:

      @TCama: I read on at least one site the menu stated an 18% GRATUITY would be charged for parties larger than X. not an 18% fee. In some states (like NY) it’s been ruled that a Gratuity cannot be mandatory.

      IANAL – in order for theft of service to occur, you would have had to agree to that service, and a recognizable level quality of services would have to be performed.

      They were not, therefore, no theft.

    • bigdandfw says:

      @TCama:

      But they didn’t know the price, apparently, since the required gratuity was supposedly 18% and the restaurant reportedly charged 22%.

      Now, they’re arguing over more than that 4% difference, but there is a 4% difference.

    • coren says:

      Well “added to the bill” doesn’t mean, in the case of a tip, that they’re demanding payment on it (which sounds odd, something on a bill which you do not pay, but at the same time, it is a gratuity)

    • Difdi says:

      A gratuity is a gift to the server for good service. Assuming a gratuity can be mandatory, then good service is equally mandatory. Which brings us back to gratuities being optional.

  5. Michael Belisle says:

    I’m sure I’m not the only one that was a tad disappointed last week by the number of articles that mentioned “18%” and the amounts of both the tip and bill, without doing the simple math to realize that the tip was not 18%.

    • windycity says:

      @Michael Belisle: I was wondering the same thing. The current article finally explains it:

      ~The police complaint issued Oct. 23 said Wagner and Pope paid only $73.87 of a $90.22 bill. Denise Pope said her daughter told her the remainder was for a supposedly 18 percent tip that her party was being charged.~

      I’m still wondering why, if there were 6 of them, only 2 were ever charged – not that I was ever in favor of anyone being arrested for this, just curious why these two were singled out.

      • Cogito Ergo Bibo says:

        Just a guess. Perhaps 4 of them paid cash to 2 individuals who split the check between them. Splitting a check 6 ways isn’t something most restaurants will do. So I’m going with the theory that 2 of the party of 6 actually handed over credit cards (after accepting cash from the other 4 of them) and essentially offered to be responsible for the entire bill.

  6. Hobz says:

    Why can’t ALL restaurants just raise their prices 10% and pay their wait staff an acceptable wage?

  7. Hotscot says:

    Can anyone tell me, in this country, the US, if you are not completely satisfied with a service after having been provided with the service, can you decline to pay?

    Any lawyers out there?

    • perruptor says:

      @Hotscot: I’m no lawyer, but I think the only way you could argue that you didn’t have to pay would be if you didn’t eat the food. If it never arrived at my table a long time after I ordered, so I left, that would seem to be a good reason to not pay. If it arrived, but was inedible, that might be tougher to justify, but I’d still not pay. If I ate it, I owe for it.

      • ahleeeshah says:

        Well, I think the issue is that the gratuity is not a reflection of the food at all, but of the service. If the bill states that an 18% gratuity is automatically added to the bill for parties of eight or more, as the verbiage usually is, that money is not for the quality of the food, but for the quality of the service provided, and for the extra work the waiters/waitresses had to do to accommodate a large group. If the service was terrible and the waiters/waitresses did not seem to do any work that would be considered extra for the group, I could understand not paying it, especially as it is specifically called a gratuity and not a service charge or fee.

        Someone earlier posted a NYT article that said at least in New York, you cannot be forced to pay a gratuity. I know nothing of PA’s law on this matter, but the NY version makes sense to me, as long as you are legitimately treated badly.

    • feckingmorons says:

      @Hotscot: There are various warranties including an implied warranty of merchantability.

      However if you eat half of a hamburger and then decide you don’t like it, or if your hamburger was great and your fries were overcooked you can’t simply refuse to pay.

      It you ate more than a de minimis amount of the food you have accepted it and have to pay.

      If you have a spoonful of vegetable soup only to find out it is clam chowder and you send it back then you don’t.

    • pop top says:

      @Hotscot: So many people would abuse the hell out of that if it was actually a law.

  8. NICU says:

    I haven’t looked into it enough but my guess is the 18% was based on the meal total plus the tax and the original report only mentioned the meal total without tax. If the restaurant is actually scamming an extra 4% that’s going to be a whole lot worse PR.

  9. StanTheManDean says:

    Automatic gratuity for a party of 6 (or 8) or more???

    Is the auto gratuity considered part of the “price” of the meal and as such must be paid, the same as the meal itself would be paid or face criminal charges?

    Nice criminal law enforcement question.

    • kingmanic says:

      @StanTheManDean: Well according to the Bethlehem police there wasn’t enough of a case to press on with charges. Likely auto-gratuity is not part of the price of the meal and is in fact a gratuity.

  10. Japheaux says:

    If only our media would go after the fed appointees who didn’t pay their taxes in the same fervor as non-tippers. Geeeeeeeez.

  11. There's room to move as a fry cook says:

    Surely it’s not up the police to drop charges but up to the complainant – the restaurant.

    • Coelacanth says:

      @IfThenElvis: Prosecutorial discretion?

      Charges can only be filed if there’s an actual case.

    • ktjamm says:

      @IfThenElvis: Unless of course, the restaurant has no legal standing to hold charges on.

      It’s like me issuing a complaint because your watch is worn on your right wrist instead of your left. If there was not law broken, there is no complaint. Period.

    • Cogito Ergo Bibo says:

      No. It’s up to the police (and usually the D.A.; the police generally follow the advice/requests of the D.A., so it’s interesting they actually put it back in police hands here). Crimes are committed against the state; not individuals. If it were up to individuals as to whether to press charges, there would be a lot of domestic abuse cases which would never be prosecuted. For low level crimes, the police might opt to have an individual victim decide how they would like things to proceed. But that’s up to the police, not the individual, as to whether they’ll be allowed that opportunity.

  12. Loias supports harsher punishments against corporations says:

    Likely they tipped the tax. There’s a reason restaurants post the total after tax in huge lettering while hiding the pre-tax amount: they want you to tip the extra bit to the server.

    • marciepooh says:

      @Loias: I hate when the waiter doesn’t bring back the detailed receipt with the credit card slip. Particularly when I’m at a place I don’t eat at often or out of town (both make it harder to remember/figure out the subtotal). Never mind that if it’s a reimbursable expense I need the detailed receipt.

  13. WalterSinister says:

    I think I know where they got the 22%. They compounded the 18%. That is, they added 18%. Then 18% of that 18%. Then 18% of the 18% of the 18%.

    The bill was 90.22 and they paid $73.87

    Do that infinitely and 18% becomes about 21.95%.

    Alternatively, the final bill could have been $90.22, with the “tip” factored in and not itemized. Then maybe someone subtracted 18% from that to get the $73.87 they paid.

    I wonder if that is how this got started. Could the students have taken the full bill and subtracted 18% from the full bill to (incorrectly) determine what the bill would be without the tip? That is, if the 18% was factored in rather than written separately, maybe they just miscalculated it and the bar owner argued with them over it.

  14. redrolla says:

    The DA did the right thing by dropping the charges, they didn’t have a case. Restaurants can not force anyone to pay a tip, not even large parties. They can say whatever they want on the menu, it does not mean you are actually required by law to pay it.

    [www.nytimes.com]

  15. econobiker says:

    “the gratuity worked out to about 22% of the bill, and not the 18% that the pub claimed”

    Was there sales tax? The amount could have been based on including sales tax.

    • crackblind says:

      I was thinking the same thing. A few weeks ago I was out with a group and noticed the “mandatory ” charge was calculated after tax. Funny thing was service was excellent and we were actually planning on leaving more.

      The place was fairly new and I called over the manager to point this out. He got defensive about the service being included for a party of six and it took a few minutes for him to realize I didn’t care about that, I just wanted to let him know he might get in trouble including tax when calculating the service charge.

      When he got it, he blamed it on the the programming in the POS (by the way, I love that anagram). Seems to be a problem with whoever sets those things up.

      All that said – is there anyone out there who knows how legally binding these “Service charges” or “added gratuities” are?

  16. mmmsoap says:

    Regarding the 22% vs. 18% confusion:

    The only reports I’m seeing refer to the bill as “$73,” which does not say either way whether tax is included in the reference.

    18% of $90.22 is, in fact, $16.24 (not the exact gratuity charge, but pretty darn close). I’m suspicious that the college students, not liking their service and having a loose grasp on how percentages work, just subtracted 18% of their total rather than the actual gratuity line-item. The math just doesn’t work out logically any other way. (Well, doing 18% post-tax gets you pretty close also, but you overshoot.)

    Now I really want to see the actual receipt.

    [Full disclosure — I’m a math teacher]

  17. jaket says:

    This is a literacy problem. “Gratuity” means optional, by definition.

    The restaurant owner used a word he didn’t understand, plain and simple. He deserves every last bit of bad PR he’s getting.

  18. Gracegottcha says:

    When I worked in a pub/bar, it was in the menu that parties of 5 or more would be assessed an 18% tip on top of their bill amount. But, in practice, several times, groups of patrons would not tip. The pub manager never did anything about it. I, however, was left with nothing for an hour or two of personal service – AND all the running around and cleaning up! I know the service was outstanding, so maybe some people just don’t tip. Pretty crummy.

  19. sanders5x says:

    Why is it when you walk into a place with a party of 6 where they add mandatory gratuity on your bill for parties of 6 or more and you have crappy service?

  20. Damocles57 says:

    I suspect the DA encouraged the police to drop the charges because there was no criminal act. The diners paid for their food, so no theft. They disputed an implied or questionable contract regarding the assessment of a gratuity/tip/service fee (whatever you want to call it) and so this “non-payment” would be a contract issue that would need to be pursued through the civil courts, not the criminal.

    As a separate issue, I have always believed that restaurants should include the salaries of all wait-staff as part of the posted prices for items ordered. Do not hope that the diners will “do the right thing” by paying the wait-staff the balance of their salary to get them up to the minimum wage they should be getting as an absolute minimium from their EMPLOYER. Then, any tip over and above the bill would truly represent an appreciation and recognition of quality of service.

  21. coolforsal121 says:

    good.

  22. SteveinOhio says:

    How have people not learned that in the internet age, having your customers arrested for dubious reasons will cost you WAY more than whatever it is you were trying to recover?

  23. Telekinesis123 says:

    “…the gratuity worked out to about 22% of the bill, and not the 18% that the pub claimed.”

    Perhaps *they* should be the ones charged with theft, not the customer?

  24. exoxe says:

    I bet Larry David would know how to handle this…

  25. eltonwheelock says:

    I was unaware that I am legally obligated to leave a tip, even for bad service. So, where is the incentive for the waiter to provide above and beyond service, they’re getting a tip either way it sounds like.

  26. DragonThermo says:

    I’m glad they don’t have a “three strikes” law! If they did, I’d be spending the rest of my life in prison! Between purposeful no gratuity for absolutely inexcusably poor service, and one accidental, I’m sure I’ve accumulated three violations in my lifetime.

  27. whytcolr says:

    I’m really confused about the 18% vs 22%. The numbers I’ve seen for the bill are that they paid $73.87 of a $90.22 bill. If you go by the assumption that the 6% sales tax is not included in the amount on which the gratuity is based, the math works out like this:

    $69.69 + $4.18 (6% sales tax) = $73.87 + $12.54 (18% of $69.69) = $86.41
    $69.69 + $4.18 (6% sales tax) = $73.87 + $16.34 (23.46% of $69.69) = $90.22

    OR

    $72.75 + $4.37 (6% sales tax) = $77.13 + $13.10 (18% of $72.75) = $90.22

    That second option is actually pretty close to what they paid ($1.12 off)… Could our college friends have skipped on paying the sales tax as well as the gratuity?

  28. firepup says:

    So he charges $74.34 and expects students to pay $16.35 vs. $13.38
    I guess $2.97 of extra tip is worth it for bad publicity and college students not going there again.

  29. dago_31 says:

    @VidaBlueBalls: Hilarious!

  30. DonnieZ says:

    My question is..

    So the bill is $73.

    One lady suggested that she had food by stating she had to wait to get utensils herself. I don’t know about out east, but it costs at least $10-12 to eat in a bar back here in Illinois.

    So even 5 people eating @ $12 is $60, plus drinks (non alcoholic or otherwise) will easily come up to $73.

    The $12 figure is a stretch.. Most of the time it costs closer to $15 plus an alcoholic beverage or two.. My wife and I can easily burn through $60 eating at the local irish place..

    What is this establishment on “mandatority gratuities” – parties of two or larger???

  31. Rectilinear Propagation says:

    Regarding the large group thing: Does it matter if you’re paying separately? Can they only add that gratuity if it’s all on one bill? Because the original story said that they would not allow them to pay separately and that was part of the reason the person paying didn’t/couldn’t tip.

  32. deserttoadd says:

    Enter text…I wonder if the owner of this grade F swill joint would like a whole bunch of people protesting about being extorted 22% for an 18% illegal bait and switch racket. Wait…he would love it because he could put up a sign on his building that anyone using the shade his building generates would be subject to a $5.00 comfort fee.

  33. mrearly2 says:

    I don’t see how anyone can be arrested for not tipping. Is not a tip, by definition, a gratuity–a relatively small amount of money given for services rendered (such as waiting tables)? If the service is not rendered, then how can one expect a tip?
    If “they” can compel one to cough up a tip, then it’s not a tip, but a fee or tax.

  34. bonolarryedge says:

    i have gone to restaurants before and accidentally spent more than i thought i would, and didnt have enough for the tip. it happens. maybe the resaurants should pay servers more money by the hour to make up for it if they dont get a tip once in a while. it shouldnt be against the law to not leave a tip. servers make alot of money, i was a server, and i knew alot of servers personally who didnt report all of their tips anyway.” Karma” watch out stingy restaurant owners.

  35. fantomesq says:

    @YouDidWhatNow?: They WERE a large group who was notified as to the charge – this situation was handled badly by all parties involved.

  36. sth9669 says:

    @YouDidWhatNow?: Not to completely defend the club, because it’s pretty crappy to arrest someone over, what was it, like $20? I think the only leg they have to stand on is that it was a large party so the pub, as many restaurants do, had a note in the menu about large parties being charged an 18% gratuity. It’s hard to decline paying a tip when it’s stated in the menu that you are required to pay 18% tip (which basically means that it’s been changed into a service fee to service the large party).

    I know it’s crappy, if I had to go through what they went through, I’d have been pissed about having to tip on top of it, so I’m not defending the pub here, in that situation, I’m pretty sure I’d just ask to speak to a manager about the amount and try to negotiate it down. Or else pay and write a bad Yelp review and never go back (and let the manager know that’s what I’m going to do).

  37. bonzombiekitty says:

    @fantomesq: But they called the charge a “gratuity”, which most people understand to not be mandatory. If they said it was a service charge, that’d be different. Either way, if it is mandatory charge, the restaurant has to pay tax on it. I have a feeling they don’t.

    Granted, it’s not the same state, but in NY there was a case in which the court ruled that gratuity automatically added to a bill cannot be mandatory since it’s a contradiction in terms.

    It’s always been my understanding that while a restaurant can automatically add a gratuity to the bill (which is understandable as if a large party were stiff to the server, that’s a lot of money lost for him/her) a customer can request that gratuity be lowered to something they deem acceptable.

  38. Difdi says:

    How is it handling things badly to refuse to pay extra for service (service fee, gratuity, whatever you want to call it) for service when the minimally acceptable service was not provided?

  39. wrjohnston91283 says:

    @bonzombiekitty:
    fantomesq: But they called the charge a “gratuity”, which most people understand to not be mandatory. If they said it was a service charge, that’d be different. Either way, if it is mandatory charge, the restaurant has to pay tax on it. I have a feeling they don’t.
    Back that last statement up.

  40. MrAP says:

    Exactly. The definition of gratuity is (from Websters) “something given voluntarily or beyond obligation usually for some service”. You can’t mandate that someone voluntarily give something. That doesn’t make any sense. If they had called it a “service fee” they could get away with it, but most restaurants use the phrase “18% gratuity added to parties over ___ for your convenience” or something similar. This might seem like just semantics to some people, but the legal system is all about semantics.

  41. bonzombiekitty says:

    @wrjohnston91283: well here’s a definition of gratuity from dictionary.com:

    a gift of money, over and above payment due for service, as to a waiter or bellhop; tip.

  42. treimel says:

    @wrjohnston91283:
    that he has a feeling? How exactly would he do that, except for *telling* you that he has the feeling that something is the case? Absent a subpoena, I’m pretty sure none of us is going to have access to the restaurant’s financials anytime soon.

  43. Hobz says:

    @wrjohnston91283: That is of course if every table they wait on that night tips them +15% and if their tips are not pooled with the kitchen staff.

    Do your really think tipping is fair to both staff and patrons?

  44. Jfielder says:

    @FatLynn: I don’t think the pub can be taxed on that money, seeing as the money goes right to the server. It is up to the server to report the tip as income though, and pay taxes on it.

  45. feckingmorons says:

    @bloggerX: Another beer summit!

    While I don’t get to that part of PA as much as I did before. I know what restaurant to avoid when I am there.

  46. CyGuy says:

    @bloggerX: I’d start the countersuit immediately and request copies of every single receipt they’ve issued in the last 3 years for a table of six or more and see how many other times they have charged over 18% and then get it bumped up to a class action.

  47. Liam Kinkaid says:

    @TCama: What the restaurant calls it is the crux of the matter. If the menu says “gratuity”, whether they claim it is mandatory or not, it is a gratuity and, thus, not mandatory. If the menu says “service charge/fee”, it is a fee that is added to the bill.

    This is similar to tax treatment on payroll amounts. If you’re paid $50,000 a year “salary”, that is taxed based on certain regulatory amounts and by what you’ve provided to the company on your W-4. If you’re paid $50,000 a year as a “bonus”, that is taxed at different rates.

  48. Tiaris says:

    It’s almost always stated as “18% gratuity”.

    That said, I think you don’t quite grasp the concept of what gratuity is, and the fact that it CAN be withheld if poor service is rendered.

  49. Michael Belisle says:

    @treimel: That argument is a canard. Nobody should really be confused by what the phrase “mandatory gratuity” means. When it comes down to it, people who make the argument that “mandatory gratuity” is an oxymoron are really just opposed to the existence of a mandatory charge for large parties.

    Saying “service charge” does not imply that the money is going to the service staff, so a different component of the meaning is lost. Consider this question: Does
    A) 18% gratuity added to parties of six or more
    mean the same thing as
    B) 18% mandatory gratuity added to parties of six or more?

    I would argue: no! “Mandatory” in this usage is a specifier added to override the customarily voluntary nature of “gratuity”. “Mandatory gratuity” hence becomes an idiom that indicates a non-optional charge is being collected for distribution to the service staff, not the restaurant.

    I think “mandatory gratuity for parties of six or more” is the clearest way to say who pays the charge (parties of six or more), whether or not it’s required (yes*), and where the money is going (to the service staff, not the restaurant).

    ___
    * In the rare instance that someone is so disappointed with the service that they refuse to pay the charge, I think the restaurant should exhibit some flexibility in the interest of customer service. But unlike some proprietors, I have a heart.

  50. lehrdude says:

    @Liam Kinkaid:

    DOINK DOINK!

  51. Difdi says:

    @treimel: I imagine that feeling of his stems from the fact that gratuities/tips to waitstaff are generally exempted from restaurant tax, while a service fee and the actual bill itself are taxed.

    Mandatory gratuity is an oxymoron. The two words are mutually exclusive, they constitute a nonsense phrase when combined. But a mandatory payment added to the bill is subject to restaurant tax. If a restaurant has someone arrested for Dine & Dash for not paying a fee, yet lists it as a gratuity on the bill, I’d call it tax evasion.

  52. mdoneil says:

    You’re completely correct, since I practice primarily in New York I simply put the wrong state’s information in. I am sure you will be happy with the Hotel Matrix from the Pennsylvania DOR which shows that non-voluntary service charges in which a portion is retained by the establishment are taxable.

    http://www.revenue.state.pa.us/portal/server.pt/document/635307/hotel_tax_matrix_pdf

    Sorry, I won’t post the whole tax code, but you were able to figure it out last time. Those three dots, that is an ellepsis…. It indicates a break in the text. Just like where I left out the rude word I was going to use.

  53. Michael Belisle says:

    I know my comment is long, but starting in paragraph 2, I explain why I don’t think “service charge” is an acceptable substitute. Even though it’s mandatory, it is not necessarily taxable, as other have pointed out. Lastly, down here in Texas, our lawmakers were able to come up with a predictable definition for mandatory gratuity:

    34 TAC §3.1001 (a)(3) mandatory gratuity charge–Any amount required by the permittee in excess of the charge for the sale of alcoholic beverages.

  54. treimel says:

    wrong thread (obviously). sorry.

  55. Cogito Ergo Bibo says:

    That’s probably what I would do, too. I do wonder, though, to what extent guaranteed tips are a license to slack off and give crappy service. Where is the incentive to excel? The funny part is that a lot of people don’t even notice the required gratuity rolled into their bill and tip on top of it as well. Meaning that there is a HUGE reward for giving any kind of service (or lack of service) you want.

  56. Shadowfax says:

    /never/ bump it up to a class action unless your sole objective is to drive the place out of business.

    Once it goes class action, a gaggle of lawyers piles onto it to “do the work,” and then they take a huge chunk of the judgement. What’s left gets divided equally among each party in the class, which generally means you end up with 5 bucks and, if you’re very lucky, a $10 gift card.

  57. friday3 says:

    In the restaurant industry, servers are sales people. A tip is similar to their commission.