Court Rules "World Yacht" Can Be Sued For Not Distributing Gratuities To Its Servers

“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.)


Edit Your Comment

  1. IphtashuFitz says:

    Pretty sleazy of the company to do something like this. If I see a tip/gratuity listed on a restaurant bill I assume (as I’m sure 99.9% of other patrons do) that it’s a tip/gratuity meant for the server(s) who attended to me. As a result I typically won’t add anything more unless the amount of the tip/gratuity is low or I felt the servers were exceptionally attentive. This sounds like nothing more than a scam to rip off the serving staff. I hope they win a huge judgment against this company.

  2. CurbRunner says:

    Bravo to the employees for being recognized and being made whole.

  3. Bizdady says:

    Im always a very generous tipper, 16-20%. But it really gets under my skin when I get stuck with these so called automatic gratuities fees. I understand trying to protect from bad tippers but it still just doesnt feel me right.

  4. kable2 says:

    Tips are the real scam. A person doing their job gets paid to do their job by the employer. You do not tip the girl at the corner store, the guy fixing your car etc.

    I never understood the idea of tipping and rarely do it.

    This might have something to do with working my ass off in a restaurant in the kitchen just after high school. I watched the servers counting their tips at the end of the night, they made more then me and I was doing the work.

    / i do tip the girl who cuts my hair because they have a gross job, touching peoples heads all day.

  5. kmn842 says:

    16-20% should be a fairly standard tip amount, certainly not “very generous”, seeing as how 15% is considered minimum for satisfactory service and 18% is the minimum amount for good service. At least that is how I was raised. Maybe I’m just a very generous tipper too?

  6. levenhopper says:

    @kable2: Yes, however, they are paid by their employer presuming that the employee will be recieving tips.

    In fact, minium wage is less for people in professions that typically recieve tips.

  7. jamesdenver says:


    You got screwed over in high school and you’re taking it out on waitstaff now? I might recommend staying inside and only venturing out to McDonald’s for a nice dinner out.

    Society thanks you in advance.

  8. MercuryPDX says:

    @Bizdady: It only angers me when
    1. It’s not obvious they added the gratuity, and I tip “twice”.
    2. It’s used as an excuse to give poor service because you’re tipping anyway.

    @kable2: The few times I’ve worked “service” as a server our tips were shared with the kitchen; as a bartender my tips were shared with the bouncers.

  9. bdgbill says:

    I used to be an enthusiastic tipper, sometimes leaving as much as 50% just for the fun of it. I also often eat alone when travelling on business so I sometimes left large tips because I felt like I was taking up a table that should hold four people.

    That all changed when I dated a waitress and she told me that many restaurants pool all the tips and distribute them evenly to all waitstaff and sometimes the bus boys and dishwashers. This destroys the entire concept of tipping! Good and bad waitresses receive exactly the same amount in tips, so why try to provide excellent service?

    Since I learned of this I am a straight 15-20% tipper. I don’t care if the waitress rotates my tires while I eat, I never leave more than 20%.

  10. TechnoDestructo says:


    Yes, you are a little generous. Seems like the tip percentage keeps creeping up. Particularly if you ask on the Internet.

  11. Hoss says:

    I’m concerned about the legality of posting an altered image of a commercial site. It’s clearly not a parody of that site if most of us are not familair with the company

  12. GreatCaesarsGhost says:

    I’d have to imagine that people who earn tips are working hard to promote the idea that 15% is too little. It’s not. Tips should be based on a dollar per service basis, not a percentage of the bill. It’s inane to pay the staff at Smith and Wolensky’s 10 times the staff at Waffle House.

  13. Keirmeister says:

    Here’s an obvious question: If World Yacht believed they were exempt from offering the gratuity to the waitstaff, were they also PAYING the waitstaff more than minimum wage or a competitive salary?

  14. kable2 says:

    Someone please explain to me why I should pay a companies workers with a tip. Doesn’t the employer pay his workers?

    Should I tip the worker at walmart who shows me where something is? How about the girl who rings up my bill, is 10% good enough for her?

    How about a tip for the guy that takes my money at the gas station.

    Alot of people with hard jobs dont get tips. Waiters do not have a hard job but expect tips????

  15. PølάrβǽЯ says:

    If a bill contains an automatic tip, I’ll have a word with the manager to have him kindly remove the fee or be sued (since I didn’t order it, I don’t HAVE to pay for it). Reason being is because I feel to ask and assume I am going to tip a certain amount is arrogant, and because I don’t trust that the entire tip is going to go to my server (as is the case here).

    As a result, I ALWAYS tip in cash. And if I feel my server may not receive the cash (maybe the bus person is responsible for cleaning the table and collecting the tip money from the table) I will even go as far as to discreetly slip the cash to the server personally.

    I’ve waited tables, I know what it’s like. Servers depend on the tips they receive to live, as usually their wage is at or below federal minimum.

  16. varco says:

    @kable2: The girl cutting your hair is probably getting paid a lot more per hour (less tips) than any server you have and depends on them a lot less.

    Also, I hope (for your sake) that you don’t have the same server more than once.

  17. bohemian says:

    I just wish everyone was paid a living wage and tips went away. It seems to be a constantly confusing and arbitrary system.

  18. PølάrβǽЯ says:

    @kable2: “Someone please explain to me why I should pay a companies workers with a tip. Doesn’t the employer pay his workers?”

    Here’s your explanation: many states allow restaurant employers to pay their food servers LESS than minimum wage, because it is assumed the tips are going to compensate for the lack of wage.

    That’s right, LESS than the federal minimum wage, which currently is $5.85/hour.

    So no, many employers don’t pay their servers (nearly enough, anyway), which is why you should tip your food server.

  19. kable2 says:

    Well in Canada minimum wage is minimum wage regardless of job.

    Will someone please explain to me why a person that walks out with a plate of food deserves a tip, but the guy at walmart that lifts the heavy boxes or the girl at the gas station doesn’t.

  20. DeltaPurser says:

    @bdgbill: Rotating your tires?! That was the funniest thing I’ve read all day! :-) Thanks for the chuckle!!! :-)

  21. varco says:

    @kable2: No one is going to force you to tip. Its a matter of etiquette. In America, it’s considered rude not to tip. In other countries, it’s considered insulting to tip.

    If you want to be a dick and not tip, go for it. Its a matter for you and your server.

  22. RandomHookup says:

    @bdgbill: I don’t care if the waitress rotates my tires while I eat

    Is that some kind of sex term? I’m getting old and I have trouble keeping up with this new fangled lingo.

  23. Trai_Dep says:

    I have to chuckle at the people that post asking why have to labor under the horrible burden of tipping at adult restaurants. I guess the idea of wearing shirts, not belching or going peanut-hunting up their anal cavities while in public is a tremendous disservice as well.

    Aptly explained by the many posters here, though.

    McDonald’s or eating at home in your stained tank-top is perfectly acceptable if you haven’t learned that when you’re in public, you behave (and tip) differently than when belching on your couch.

    You get the feeling they’re the people that turn off the lights at home and hide from children during Halloween as well? Thought ya did. :)

  24. spinachdip says:

    @kable2: Why does a heiress of a tycoon deserves to make more from dividend payouts in a year than a guy who drives a forklift at the dock makes in his lifetime?

    Here’s the thing – “deserve” has nothing to do with anything. When you say one person deserves something more than another person, you’re arbitrarily placing a value on something based on your own feelings.

    Now, if you’re asking why a waiting tables pays more than occupations that you believe to be more deserving, don’t look at how much work they do, look at what they’re worth to the employer. All else being equal, a good waiter is harder to replace than a good dishwasher or a good salad guy, all else being equal. Manual labor may seem like “more” or “harder” work than waiting tables, but customer interaction requires a skillset that’s more scarce than the one required for manual labor.

  25. Mr_Human says:

    @kable2: I suspect you rarely tip, because I can’t imagine that you actually go out much to places where it’s expected. Or you’re not telling the truth to make your point, or you don’t go to dinner with friends who would shame you into tipping.

    I will say, though, that the tipping culture in this country has gone a little nutty. Every counter in every store has a little tip jar now. Even the bus that I take to the airport usually has a hastily written “tips are welcome” sign taped in the front. And these guys are paid regular salaries. The pressure to tip everywhere has gotten to a bad place.

  26. ShortBus says:

    “I don’t tip because society says I gotta. I tip when somebody deserves a tip. When somebody really puts forth an effort, they deserve a little something extra. But this tipping automatically, that shit’s for the birds. As far as I’m concerned, they’re just doin’ their job.”

    “Look, I ordered coffee. Now we’ve been here a long ****ing time, and she’s only filled my cup three times. When I order coffee, I want it filled six times.”

  27. chiieddy says:

    @aaron8301: It should be noted that if a server does not make tips equaling minimum wage in the final outcome of their salary + tips, the restaurant is required to pay the difference so they’re making minimum wage. That said, a server who’s not making at least minimum wage in tips will not be employed very long.

  28. ironchef says:

    mandatory tips that don’t get passed on to servers? Time for punitive damages. This is extra douchebaggery at its worst.

  29. JiminyChristmas says:

    @kable2: Even though you’re a pathetic cheapskate, I hope for your own sake you don’t ever eat at the same place twice.

    1) If you’re a repeat customer, and someone recognizes you I guarantee they will remember you. And not in a good way.

    2) You’re buying yourself into a death spiral of bad service. If you return to a restaurant where someone recognizes you the person likely to end up helping you is the new guy who doesn’t yet know you’re a pathetic cheapskate.

    Lastly, while tipping may not make a lot of sense to you, it might help to just think of it as a custom. Society is full of them, and people generally abide by them for the sake of living together in a civilized manner. But hey, feel free to blaze your own trail.

  30. rkmc12 says:

    @kable2: The guy at Wal-Mart makes minimum wage or better. The waitress does not.

  31. rkmc12 says:

    @kable2: We’re not talking about Canada. Read and be informed before posting.

  32. balthisar says:

    To be fair, this isn’t a restaurant, but a catering business. Should those employees even be receiving tips? It’s not a restaurant. The bartender should receive cash tips at the bar… but the table monkey that only brings your salmon or beef? I’ve never gone to a wedding or other organized function where anyone but the bartender were tipped.

    Note: not justifying the failure to distribute the “gratuity” that was charged. It seems that the bigger crime was charging a gratuity, period.

  33. avantartist says:

    I think that in an industry where a tip is relied on as a form of wage. The employer should be held responsible to make up the difference in the event a server doesn’t make minimum wage after a shift.

  34. avantartist says:

    @balthisar: I believe with weddings wedding gratuity is usually added to the bill.

    I agree with you that the bigger crime was charging a gratuity. maybe the customers should sue the company as well.

  35. Chris Walters says:

    @balthisar: Agreed. I don’t care whether the company pays their staff tips or not—if they don’t, New York is surely a great city to find another job waiting tables (or catering). But don’t add a “gratuity” to a bill if you’re not going to give it to your employees. I don’t understand how the court doesn’t consider that to be a deceptive practice.

  36. TechnoDestructo says:

    I rarely tip, because I rarely go out to eat in the US. When I’m in Japan or Korea, I do all the time…and they actually pay people there, and don’t have the custom of tipping.

  37. CMU_Bueller says:

    @avantartist: Someone correct me if I’m wrong, but I do believe that in some places that is the law.

  38. SVreader says:

    @Mr_Human: I agree that tip jars have gotten out of control. I knew someone who worked in an ice cream shop where they were not paid less than minimum wage (as a waiter or waitress would be), and would get angry if customers didn’t put money in the tip jar! I feel like I have to contribute to the tip jars at places I get coffee or snacks regularly, because apparently it’s “expected” now, and these people handle my food.

    I also never know how much to put in a tip jar. If you buy a $3.00 drink, do you have to put a full third of the total price more into the tip jar? Do you have to give a 25% tip to someone who scooped an ice cream cone for you, or can you just toss in a few coins?

    I definitely think this dining yacht company was deceptive, though. If the bill says “gratuity,” who isn’t going to assume it’s going to the servers? And where did it go, since the servers didn’t get it? Sounds like the company is just charging extra money for the service customers are already paying it to provide.

  39. puka_pai says:

    The yacht company lied in their description by calling it a “gratuity” rather than “extra charge”. What surprises me is that any court ever ruled in their favor.

    FWIW, a few years ago I was the office manager for a chain restaurant. I used to help out at lunch time and a few of the servers tried to share their tips with me. I told them no, I was making a helluva lot more than they were since I knew they were pulling down the federally-sanctioned slave wage of $2.13/hr.

    Not a typo. TWO dollars and thirteen cents an hour was the legal rate servers could be paid.

    I always tip. And if a server does an especially good job, I always make sure to find their manager and tell her/him so. Maybe on their next review they’ll get that gigantic 25 cent raise.

  40. CumaeanSibyl says:

    @CMU_Bueller: Yes, it’s the law — I believe federal. On the other hand, most waiters don’t have the resources to pursue a case against an employer who violates the law. It’s like when a big chain store forces people to work unpaid overtime or whatnot — they know they’re getting screwed, but what’s the average cashier going to do about it? If you complain, they’ll tell you to go work somewhere else (where they might be doing the same thing).

  41. jarchie219 says:

    On Halloween I go to a nice restaurant ( and tip ) to avoid the trick-or-treaters. So there.

  42. jackjackson says:

    Never having worked in the service industry or had to pay taxes for the kind of work, would the workers who were not given the tips be taxed on the expected tip value? Or would there have just not been any reporting at all?

  43. AaronZ says:

    I was in South Beach last weekend and ate out a lot. All the restaurants added an automatic 18% to the bill.
    Thing is, when you give a credit card and the slip comes back it just has the bill amount a line for the TIP, and your total.
    And if you didn’t pay attention and see the 18% on the bill already, you’d tip on top of the tip.

    Thing is, a lot of international tourists don’t know about tipping, so they have to add it on.
    I basically don’t see a good way to do this either way.

  44. forgottenpassword says:

    IMO automatic gratuities/tips are just wrong. You earn your tips by good service…. its just as simple as that. WHy should I be MADE to pay an automatic gratuity when I get bad service?

    Tipping ettiquette has just gotten out of control these days.

    You dont automatically deserve a tip…. you have to work & earn it with good service.

    One thing I have to mention is that I HATE fast food places that have tip sections for the credit card bill/reciept. If I am picking up a pizza at the local pizza hut…. I am not giving a tip for it & dont like to be made to feel as if I was a POS as the cashier/waitress is staring at me while I sign my reciept & dont leave a tip. If you were waiting on me as I ate inside the restaurant…. I’d leave a tip If I recieved good service, but if I am just walking in the door to pick up my pizza…. no tip is deserved/earned.

    I learned a lesson a while back… always tip in cash & write in “cash tip” (or put in “no tip” if you arent leaving a tip) on the credit card reciept’s tip section…. because I have caught waitresses giving themselves bigger tips when I went through my credit card bill at the end of the month. ANd I raised absolute HELL about it!

  45. forgottenpassword says:

    as for the article… I find it disgusting that the company was screwing its servers & am glad the servers won.

  46. Christopher says:

    I know a few waiters that hate automatic gratuities just as much as customers do. One of my friends works for a restaurant that adds an automatic 15% for table of 6 or more, but he rarely adds it to the bill because if he does he’ll probably only get the 15% tip, but if he doesn’t add it the party may tip 18 or 20%.

  47. NiGHTSSTUDiO says:


    Yeah, but it is ok to ask the server to see if they keep it or pool it so you can reward them based on their performance.

    My friend, who used to be a server, said she used to keep her tips, but after a change in management, they changed the tipping rule for all tips to be pooled.

  48. lovelove says:

    I am a server. I make $4.00 an hour. And if you leave a good tip, you will be remembered. And if you leave a bad tip, well heaven help you, you will be remembered as well. And you really wouldn’t want to be eating what I put on your table. And the cheap tip that you leave that won’t even give me one tank of gas? You’d better NEVER walk into my place again.

  49. akalish says:

    @kable2: You said “Waiters do not have a hard job but expect tips????” This is possibly the most ignorant part of your comment (which is indeed an accomplishment).

    I’ve never waited tables, but I know people who have and I’ve seen plenty of people being waited on in restaurants. It is one of the most difficult jobs out there–physically exhausting and a psychological challenge putting up with people like you, who apparently think you are there to be their slave and then don’t tip at all. I don’t know where you live, but I hope it’s not the U.S. because you’re an awful example of respecting the American ethic of hard, honest work.

  50. bonzombiekitty says:

    It should also be noted that tipping is what keeps restaurant prices low when compared to places that do not tip. Could we change to a non-tipping culture? Sure. But expect the prices on menus to take a big jump.

  51. bonzombiekitty says:

    @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.

  52. bonzombiekitty says:

    @kable2: Waiters don’t have hard jobs? I don’t think you know any waiters.

  53. Jon Parker says:

    Why does any post about tipping anywhere on the internet always degenerate into the same stupid arguments?

  54. WhirlyBird says:

    @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.

  55. bkpatt says:

    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.

  56. econobiker says:

    Waitering is a demanding job for sometime idiot customers. In fact there is a whole subset of websites about the deal:

    [] etc

  57. Snarkysnake says:

    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.

  58. sixseeds says:

    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.

  59. bdgbill says:


    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.

  60. bbbici says:

    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.

  61. Tonguetied says:

    “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!

  62. ancientsociety says:

    Please note that Kable2 does not speak for all of us who were short-order cooks in high school.

  63. MercuryPDX says:

    @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.

  64. MercuryPDX says:

    @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. :)

  65. jaewon223 says:

    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?

  66. bbbici says:


    Precisely, as any non-asshole bartender should.

  67. bbbici says:


    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%

  68. Feemsteer says:

    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.

  69. balthisar says:

    @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.

  70. muntjacbeer says:

    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.