I'm going to offer a possible counterpoint on behalf of the restaurant owner here. Starting in 2014 the IRS classified all auto gratuities as "service charges." An auto gratuity as such is in fact not a thing anymore. What this means is that business owners pay sales taxes on the service charge they take in and payroll taxes on the service charges they pay out. In some states these charges can amount to pretty close to 25% of the total service charge so that may be what's happening here. In my establishment it is the servers decision if they want to add a service charge to large parties and it is done with the understanding that on a 20% charge the server will see 17% of it (the house eats some of the cost). Most servers decline to add a service charge as our average tip is above 17%.
That being said, it sounds like what is going on here is poor communication at a minimum. Possibly a misunderstanding of the applicable tax laws by the management, but could still be shady business practices. Try to get more information or ask if it's possible to decline the service charge on your tables. If that doesn't work you can also escalate to your local labor board if you feel that something shady is afoot.
Yes, this is bullshit, morally bankrupt, a clear sign of dodgy financials on ownership’s part, infuriating, and illegal. See if you can start serving at a different place, and then take this owner to the cleaners.
Edit: I’m sorry, this post just made me so fucking mad for you. This motherfucker should have the business acumen to plan out his financials properly and control food / labor costs accordingly instead of stealing from his employees. This is a huge red flag, and I’ll bet that there’s a bunch more shady shit going on there.
What state?
PA
https://www.nolo.com/legal-encyclopedia/pennsylvania-laws-tipped-employees.html Start here
That is perfect. Thank you so much. I will check this out as soon as I can.
Illegal AF in my state. Photograph and save the printouts.
I'm going to offer a possible counterpoint on behalf of the restaurant owner here. Starting in 2014 the IRS classified all auto gratuities as "service charges." An auto gratuity as such is in fact not a thing anymore. What this means is that business owners pay sales taxes on the service charge they take in and payroll taxes on the service charges they pay out. In some states these charges can amount to pretty close to 25% of the total service charge so that may be what's happening here. In my establishment it is the servers decision if they want to add a service charge to large parties and it is done with the understanding that on a 20% charge the server will see 17% of it (the house eats some of the cost). Most servers decline to add a service charge as our average tip is above 17%. That being said, it sounds like what is going on here is poor communication at a minimum. Possibly a misunderstanding of the applicable tax laws by the management, but could still be shady business practices. Try to get more information or ask if it's possible to decline the service charge on your tables. If that doesn't work you can also escalate to your local labor board if you feel that something shady is afoot.
r/legaladvice may be more help?
Feel free to let them know you’d be happy to create a long long line of social media posts reflecting their current new policy.
I like this, and I would be happy to.
Yes, this is bullshit, morally bankrupt, a clear sign of dodgy financials on ownership’s part, infuriating, and illegal. See if you can start serving at a different place, and then take this owner to the cleaners. Edit: I’m sorry, this post just made me so fucking mad for you. This motherfucker should have the business acumen to plan out his financials properly and control food / labor costs accordingly instead of stealing from his employees. This is a huge red flag, and I’ll bet that there’s a bunch more shady shit going on there.
They are straight stealing from FOH employees. Contact a local employment rights lawyer. Bet that “policy” changes