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Whats Up Doc

Customers Shouldn't Be Responsible For Subsidizing Restaurants Server Wages

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15 minutes ago, renoskier said:

How do all the restaurants in the dozen or so states that require minimum wage, or higher, manage to stay in business?

For starters.....10% of restaurants in those states have closed, 71% have passed it along to the customer by raising menu prices, 43% have eliminated positions and 64% have reduced employees hours.  Those are really the only options when operating on a 3%-6% margin. 

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2 hours ago, OrediggerPoke said:

That nugget your wife taught you has little to do with sharing the tips and everything to do with not claiming the tips as gross income for tax purposes. Restaurants that do tip sharing with kitchen staff can do that with credit cards and their computers very easily (they just apportion the tips). 

 

The 'big secret' which isn't a secret at all is that servers and other tipped workers are almost always taking home more money than they are claiming and being taxed on. But in the days of credit card purchasing versus cash, that is quickly ending.

Time to add "tax evasion" to my blackmail ammo against my wife. Thanks!!!

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7 minutes ago, misplacedcowboy said:

OK, but people could stop paying all tips tomorrow and servers would still be guaranteed at least minimum wage by their employer. 

No all states. And only if the restaurants actually do it.  There are many cases where restaurants are stealing the tips of servers.  Some have been successfully sued, others are probably continuing to get away with it.  So who is ensuring they're making up the difference to guarantee minimum wage?

Bottom line though is why is there a tier below minimum wage?  It's the jumbo shrimp of oxymorons.

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15 minutes ago, Slapdad said:

So you post a study paid for by the industry.

Tell me, what percentage of restaurants in the "less than minimum wage" states close. Considering the overall failure rate of restaurants, especially in the first several years, my guess at least 10%.

Considering the overall failure rate of restaurants, 10% seems low. Of course they pass some of the cost along to the customer, that's okay as long as everyone is playing by the same rules.

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10 minutes ago, Whats Up Doc said:

No all states. And only if the restaurants actually do it.  There are many cases where restaurants are stealing the tips of servers.  Some have been successfully sued, others are probably continuing to get away with it.  So who is ensuring they're making up the difference to guarantee minimum wage?

Bottom line though is why is there a tier below minimum wage?  It's the jumbo shrimp of oxymorons.

The employee. Same with commissioned salespeople, who also are often paid a base below minimum wage and sometimes paid zero base. They all know when they get their check that their paycheck was under minimum wage and they let the employer know....trust me. And most employers use a payroll service or payroll software that has those sort of checks/audits in place that won't allow a payroll to be transmitted or run if there is a check with a gross below minimum wage for the hours worked. 

Only Alabama, Louisiana, Mississippi, South Carolina, and Tennessee have no state laws regarding minimum wage adjustment for tipped employees. The fact that a tier exists that is below minimum wage strictly academic.

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34 minutes ago, Whats Up Doc said:

 There are many cases where restaurants are stealing the tips of servers.  Some have been successfully sued, others are probably continuing to get away with it. 

The pizza delivery business figured out how to do this legally years ago.  They add a 'delivery fee' to the transaction.  Many assume that fee goes to the driver as some sort of compensation for delivering the pizza (it doesn't or only a small portion does).

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15 minutes ago, renoskier said:

So you post a study paid for by the industry.

Tell me, what percentage of restaurants in the "less than minimum wage" states close. Considering the overall failure rate of restaurants, especially in the first several years, my guess at least 10%.

Considering the overall failure rate of restaurants, 10% seems low. Of course they pass some of the cost along to the customer, that's okay as long as everyone is playing by the same rules.

The study was done by Bloomberg Intelligence, which is the financial analysis side of the Bloomberg media company and was reported by Restaurant Business Magazine (my link), among other places. I don't have the detailed breakdown and don't have time to do a deep dive, but I have had several clients in the restaurant business and I can tell you for a fact that, before COVID, a $15/hour minimum wage was one of the biggest concerns for continuing operations....and that goes for all small businesses, not just restaurants. 

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3 minutes ago, OrediggerPoke said:

The pizza delivery business figured out how to do this legally years ago.  They add a 'delivery fee' to the transaction.  Many assume that fee goes to the driver as some sort of compensation for delivering the pizza (it doesn't or only a small portion does).

The delivery fee pays the salaries, taxes, mileage reimbursement (or cost to buy and maintain and the fuel for the vehicle if the delivery person doesn't use his/her car) of the delivery person. I have a feeling that you've never looked a financial statement for a restaurant or a pizza joint.  

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So, how do restaurants operate in countries where tipping isn’t customary? Also, why haven’t restaurants ceased existing in states where there isn’t a carve-out for restaurants to have lower minimum wages?  

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17 minutes ago, OrediggerPoke said:

Many assume that fee goes to the driver as some sort of compensation for delivering the pizza (it doesn't or only a small portion does).

Proving that people are stupid, since the big pizza chains go out of their way to point out that 'Hey - that delivery fee aint a tip'.

In the beginning the Universe was created.
This has made a lot of people very angry and been widely regarded as a bad move.

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All restaurants should be like free and shit. And their employees should be making six figures. Just get all the rich people and greedy corporations to pay for it. 

bsu_retro_bsu_logo_helmet.b_1.jpg

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17 minutes ago, Slapdad said:

The delivery fee pays the salaries, taxes, mileage reimbursement (or cost to buy and maintain and the fuel for the vehicle if the delivery person doesn't use his/her car) of the delivery person. I have a feeling that you've never looked a financial statement for a restaurant or a pizza joint.  

Except I just told you (in this very thread) that I have quite a bit of past pizza delivery experience and am pretty good friends with the long time general manager of a Dominos location. I just told you that that store currently pays between 30 cents and 35 cents a mile for the driver to use their own vehicle. I can tell you that the average delivery is about 2.8 miles round-trip when considering that most drivers will take an average of 1.8 deliveries with them each time they leave the store. Do you still have this feeling? 

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13 minutes ago, RSF said:

Proving that people are stupid, since the big pizza chains go out of their way to point out that 'Hey - that delivery fee aint a tip'.

I agree. Few people actually read to the extent that they should. The pizza chains now include that 'disclaimer' because there was a past class action lawsuit claiming that a pizza chain was acting deceptively through its delivery fees to collect revenues that weren't intended for it.

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10 minutes ago, SalinasSpartan said:

So, how do restaurants operate in countries where tipping isn’t customary? Also, why haven’t restaurants ceased existing in states where there isn’t a carve-out for restaurants to have lower minimum wages?  

In countries where tipping isn't customary, food servers are paid more. Of course, that also means that there is almost no incentive for them to go over and above. Personally, I'd rather have the ability to hustle and shine with customer service for the opportunity to make more. According to the link in my earlier post, a food server in France makes roughly $10/hour (median pay) while the median pay in the U.S. is over $14/hour. 

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20 minutes ago, BSUTOP25 said:

All restaurants should be like free and shit. And their employees should be making six figures. Just get all the rich people and greedy corporations to pay for it. 

I'd just prefer to pay for the server's wages as part of the bill like every other damn business, tipping is exhausting

11 minutes ago, Slapdad said:

In countries where tipping isn't customary, food servers are paid more. Of course, that also means that there is almost no incentive for them to go over and above.

So do you think that only people who are tipped go above and beyond? Should your boss cut your wage to 2.15/hour and inform clients that they should tip you so that you have an incentive to go above and beyond?

 

Remember that every argument you have with someone on MWCboard is actually the continuation of a different argument they had with someone else also on MWCboard. 

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9 minutes ago, Slapdad said:

In countries where tipping isn't customary, food servers are paid more. Of course, that also means that there is almost no incentive for them to go over and above. Personally, I'd rather have the ability to hustle and shine with customer service for the opportunity to make more. According to the link in my earlier post, a food server in France makes roughly $10/hour (median pay) while the median pay in the U.S. is over $14/hour. 

Ah, I’d rather just pay the servers more, we can just agree to disagree there. My second question was why haven’t states that do not have carve-outs for tipped employees seen their restaurants vanish? I have only lived in two states as an adult (California and Nevada), and neither have minimum wage exceptions for tipped employees; but there are restaurants in both states, I promise. So why do restaurants in other states need the ability to pay below the state mandated minimum wage? 

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6 minutes ago, OrediggerPoke said:

Except I just told you (in this very thread) that I have quite a bit of past pizza delivery experience and am pretty good friends with the long time general manager of a Dominos location. I just told you that that store currently pays between 30 cents and 35 cents a mile for the driver to use their own vehicle. I can tell you that the average delivery is about 2.8 miles round-trip when considering that most drivers will take an average of 1.8 deliveries with them each time they leave the store. Do you still have this feeling? 

Yes, I still have that feeling. Being a pizza delivery guy doesn't mean that you've read a financial statement for a pizza place or, in the event that you have, that you've understood what you were looking at. Most general managers of pizza places have little to no knowledge of what to look at and most of the time, they just look at day's sales. Not all, but most. 

Also, most pizza places are going to pay the IRS mileage rate, which is $0.56/mile in 2021. 

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7 minutes ago, SalinasSpartan said:

Ah, I’d rather just pay the servers more, we can just agree to disagree there. My second question was why haven’t states that do not have carve-outs for tipped employees seen their restaurants vanish? I have only lived in two states as an adult (California and Nevada), and neither have minimum wage exceptions for tipped employees; but there are restaurants in both states, I promise. So why do restaurants in other states need the ability to pay below the state mandated minimum wage? 

Have you ever worked for tips or on commission? I did when I was in college and I would take that all day long over being paid a higher hourly wage. In my years of commission and working as a server, there was only one week when I had to get a minimum wage adjustment. By "paying the servers more" the end result in most cases is that they would make less than they do on tips. I haven't kept up on Nevada law, so I'm not aware if they have a carve out for tipped employees, but they used to....that's where I worked on commission and for tips while in college. It may have changed since then. 

 

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