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Author | Topic: Tipped Employees | ||||||||||||||||||||||||||||||||||||||||||||||||||||
purpledawn Member (Idle past 1792 days) Posts: 4453 From: Indiana Joined: |
This is not about whether one should or should not tip. This is about what tipped employees are paid. Specifically restaurant servers.
According to the FLSA Fact Sheet #15:
In discussions on whether to tip or not to tip, I see comments such as this one from a discussion board.
I'm curious why they are ending up with a $0 paycheck. They should be making at the very least minimum wage with or without tips. Another clip from the FSLA Fact Sheet #15
Since taxes are a percentage of what is made, they shouldn't end up with $0. What am I missing?
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subbie Member (Idle past 78 days) Posts: 3509 Joined: |
Never worked as a server, so what I have to say is only based on what I've heard other servers say, but I think I have an explanation.
At least in some states, servers are theoretically required to report the amount of their tips to their employers, who then withhold based on the total of tips plus hourly wage. If they earn enough in tips, the total amount of withholding for all taxes, federal, FICA, SS and state, if any, could easily amount to more than the $2.13 they earn hourly. (BTW, that $2.13 is a federal minimum, some states require a higher amount than that.) In such circumstances, the check the employee receives would be zeroed out, but it should reflect the withholdings that the employer makes on the employee's behalf. Ridicule is the only weapon which can be used against unintelligible propositions. Ideas must be distinct before reason can act upon them; and no man ever had a distinct idea of the trinity. It is the mere Abracadabra of the mountebanks calling themselves the priests of Jesus. -- Thomas Jefferson For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus -- and non-believers. -- Barack Obama We see monsters where science shows us windmills. -- Phat
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purpledawn Member (Idle past 1792 days) Posts: 4453 From: Indiana Joined: |
quote:Yes, I realize that states can vary. Table of Minimum Hourly Wages for Tipped Employees, by State So the employee is taking the cash tips home and the total taxes are then taken out of what the employer pays them. That would explain the comment that one person made concerning owing more taxes at tax time. (I think it was on that same discussion page.) If they made enough to owe more taxes than the 2.13 per hour would cover, they would then owe those taxes at the end of the year. If that is true, then getting a $0 check doesn't mean they didn't bring home any money. Now if they didn't get any tips, then their employer would need to make up the difference and then their paycheck should be like non-tipped employees. If they didn't make enough tips, then the check should adjust accordingly. Edited by purpledawn, : Added table link
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subbie Member (Idle past 78 days) Posts: 3509 Joined: |
Correct. And, they probably wouldn't remain in that job for long unless that situation changed substantially.
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Meldinoor Member (Idle past 3143 days) Posts: 400 From: Colorado, USA Joined: |
As a waiter, I just want to confirm that you are spot on. -Meldinoor
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purpledawn Member (Idle past 1792 days) Posts: 4453 From: Indiana Joined: |
So wait staff make at least the Federal Minimum wage of $7.25 per hour (varies by state) for non-tipped employees when the Federal Minimum wage of $2.13 per hour (varies by state) for tipped employees is combined with their tips. Is that correct?
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AnswersInGenitals Member Posts: 529 Joined: Member Rating: 5.7 |
Wow! Doesn't this mean that we are not actually tipping the waiter? We are just tipping the restaurant owner or employer (by reducing the wages he has to pay to the waiter by the amount that we tip)?
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Meldinoor Member (Idle past 3143 days) Posts: 400 From: Colorado, USA Joined: |
No no no!
![]() The servers receive the tip, but it is of course taxable income. So the restaurant records the amount of tip made by the employees so that it can withhold taxes from their paychecks. That way servers can simply take their tip home right away instead of having to worry about tax. Tipping is very important, because our wages are so low. -Meldinoor
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Meldinoor Member (Idle past 3143 days) Posts: 400 From: Colorado, USA Joined: |
I'm not entirely sure on that one. The restaurant I work at is pretty expensive, so situations where we make less than minimum wage in tips are rare. I'd have to ask my boss about that.
-Meldinoor
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subbie Member (Idle past 78 days) Posts: 3509 Joined:
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Look at it this way: If the employer had to pay a reasonable wage, they would just add that cost to the menu prices, passing it on to the consumer anyway. Plus, not only would they have to pay more in wages, that would also increase the amount they would have to pay for their share of the contribution to SS benefits. Instead, the servers end up having to pay that amount themselves. So, this arrangement saves the consumer at the expense of the server. And that's not even taking into account that the consumer payment is voluntary to begin with. I am curious about one thing: how do servers feel about customers who stiff on tips because of bad service? Ridicule is the only weapon which can be used against unintelligible propositions. Ideas must be distinct before reason can act upon them; and no man ever had a distinct idea of the trinity. It is the mere Abracadabra of the mountebanks calling themselves the priests of Jesus. -- Thomas Jefferson For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus -- and non-believers. -- Barack Obama We see monsters where science shows us windmills. -- Phat
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Meldinoor Member (Idle past 3143 days) Posts: 400 From: Colorado, USA Joined: |
If the service was obviously bad it's usually ok. I'd much rather they tipped poorly than complained to management. (Not that I give bad service, but everyone has their bad days) The worst case is when the service is good, and the customers are obviously happy, but they still stiff the tip. Some people think they can make up for a bad tip by being really nice to the server and complimenting on the service. Not true. I'd take rude customers who tip well over friendly cheapskates any day. -Meldinoor Edited by Meldinoor, : Better subtitle
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Hyroglyphx Inactive Member |
That's a great question, because when I used to be a server and barback, my paychecks were usually voided too, making tips your sole means of income. I wish I could tell you, because I have questioned the same thing concerning percentages. "Political correctness is tyranny with manners." -- Charlton Heston
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Hyroglyphx Inactive Member |
For an average experience, I usually tip 15%. That's my average for neither a superperb job or a terrible job. As someone who has been on both sides of the isle, I believe in tipping well for a job well done. The quicker you get my food or drinks, the less you screw up my order, the more attentive you are (without obnoxiously hovering) the more your tip increases. Being a great server or effective bartender is a skill, requiring excellent interpersonal skills and time management. I have no problem compensating well beyond 15% for an excellent job. Inversely I have no moral qualms, however, not tipping for atrocious service. I have only not tipped whatsoever maybe 5 times in my life. You have to seriously fuck up for me to do that, but it is not beneath me to do so based on their service (or lack there of, really). "Political correctness is tyranny with manners." -- Charlton Heston
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purpledawn Member (Idle past 1792 days) Posts: 4453 From: Indiana Joined: |
quote:From what I have learned so far, the taxes can only be taken out of what the employer pays since tips are taken home. Since both are considered as income, if you made enough in tips and wages, then the taxes will probably exceed the wages paid by the employer, which explains the $0. Did you end up owing taxes at tax time? Hypothetically: If you were to give the employer all your tips to hold and then at the end of the week or two weeks, the employer wrote a check for the total of the two (wages and tips) minus taxes, then you wouldn't have a voided check and shouldn't owe taxes at the end of the year. From what I can see, waiters aren't any worse off than non-tipped employees getting the standard minimum wage (not restaurant minimum). (I'm not talking about buying health insurance, etc. Many people have that problem also who make minimum wage.) The setup is more complicated though. If compared to a normal minimum wage person at $7.25. The waiter actually gets to take home more pay since the employer apparently can't take more than the wage he pays unless the employee makes more funds available.
So it looks like income tax is the last to come out if there is enough money left. That's why I wondered if you ever owed at tax time. Scripture is like Newton’s third law of motion—for every action there is an equal and opposite reaction. In other words, for every biblical directive that exists, there is another scriptural mandate challenging it. -- Carlene Cross in “The Bible and Newton’s Third Law of Motion”
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purpledawn Member (Idle past 1792 days) Posts: 4453 From: Indiana Joined: |
This bill has is in committee right now. It will be interesting to see if it goes through.
They might as well just stop differentiating between tipped and non-tipped employees when it comes to minimum wage (if this bill even has a chance of getting to the floor). Raising the tipped employee minimum would help to cover more of their taxes during the year. Of course those who do this type of work for many years would know what's coming at the end of the year and would hopefully prepare.
I only make $8 per hour. Of course the $17,118 is based on working 2080 hours a year (40 hours a week, 52 weeks a year). From what I can tell wait staff don't usually work 40 hours a week. Do wait staff ever work a full 2080 hours a year? Apparently in 1966 the tipped employee minimum was to be a percentage of the non-tipped minimum wage, but the employer was not required to bring them up to the minimum wage if tips weren't enough.
So only since 1996 were employers required to make up the difference, but they also froze the tipped minimum.
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