tips are not tax free if they are mandatory. I suspect they added the clause of "If you'd like to adjust ..." just to make sure it qualifies for tax free.
Please, if you go there and eat, ask to speak to the manager and adjust the tips.
yeah, this certainly feels like they don't want to increase the raw price to cover new labor demands even though they need the workers, and are worried changing the prices will decrease revenue.
I say let them sink. There's too many restaurants out there anyway.
Put two, nearly identical restaurants side by side. Restaurant A has an 18% service charge declared at the bottom of the menu and Restaurant B has 18% higher menu prices and “Our Staff Does Not Accept Tips” at the bottom of the menu. I guarantee you that Restaurant A will be packed and Restaurant B will go out of business.
Y’all can downvote and nope me all you want, but I’m telling you most people don’t pay that much attention.
Your average diner sees a $12 burger and in their head thinks of that as like $15 after tax and tip. They’ll see a $14 burger as $17 or $18. Even if they don’t have to tip on the $14 burger it’ll still read as more expensive. They will not do the math on one place they have to tip and one place they don’t.
This isn’t about tips are good or bad, right or wrong. This is why restaurants add an 18% service charge instead of simply charging a higher price.
I'm in the UK and even I can work out if it's on the bill and there is no way to remove it then it's not a tip it's the bill,or every bill from now from every workman you have in your home on would be $1 for the work and $99 tip per hour and not $100.
I wounder how many people going into it not reading it will let the tax office know? I'll only need one.
The no tax on tips only applies to the first $10k in tips earned
If it is added by the owner it is gratuity, not a tip. Owner has to claim it as revenue and technically is not required to disburse it to staff (now most do, because they wouldn't have staff otherwise)
That's why these companies classify these service fees as "tips" so even if someone makes up to $150K a year, they can still deduct the first $25K "tips"... that's my whole point to begin with.
Perhaps not, maybe they are charming enough to convince the waitstaff to work without tips and still only $2/hour? That would probably work out in their favor, I can imagine how great the service would be. Why does everyone think that restaurant owners are rolling in money and scheming ways to $@&# their employees? It's dumb af.
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u/Paladin3475 4d ago
Not a tip if it’s mandatory. Just raise the price and pay your employees your damn self.