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>That sounds like a really good change! Tipping is such an archaic mess. The elephant in the room is that the reason we still have tipping for servers in resta

>That sounds like a really good change! Tipping is such an archaic mess. The elephant in the room is that the reason we still have tipping for servers in restaurants and bar staff is that it's actually overwhelmingly their preference. There's a lot of complaining about bad pay and the tipped-wage discount on the minimum wage etc. but not actually a lot of support for doing away with tipping. Part of that is the opportunities that tips give for tax evasion. The IRS reckons that something like 10% of all individual income tax underreporting is due to incorrect reporting of tips: employees are supposed to tell their employers how much they got tipped, and there's really no effective enforcement.

seanmcdirmid 3y ago
Tipping via apps is almost impossible to not report to the IRS. Also any tipping via credit cards.
- NovemberWhiskey 3y ago
  Do you know this from actual personal experience, or just because it seems obvious that the data is there and that it would be trivial to automate? The employer doesn't really have any incentive, as it's the employee's responsibility to report their tips. There are lots of places that will tip out servers in cash for card receipts and rely on reporting - of course, yes, the servers have to report it but all the incentives to do the right thing are missing on both sides.
  - seanmcdirmid 3y ago
    My sister worked as a waitress. Credit card tips were delivered to her on her paycheck minus credit card processing fees. I've never heard of a restaurant that would tip out cash for credit card transactions the same day. Now if they did do that, they might have to report those tips that it cashes out on the worker’s W2 along with the employees reported tips I think it is even more obvious for gig workers whose income are reported via 1099s and their tips are collected by a third party. I'm pretty sure Uber must report tips as general income. Now, it is possible for the rider to give a tip to their Uber driver directly as cash, and that wouldn't be necessarily reported (or to tip their delivery person directly rather than via app).

seanmcdirmid 3y ago

Tipping via apps is almost impossible to not report to the IRS. Also any tipping via credit cards.

NovemberWhiskey 3y ago
Do you know this from actual personal experience, or just because it seems obvious that the data is there and that it would be trivial to automate? The employer doesn't really have any incentive, as it's the employee's responsibility to report their tips. There are lots of places that will tip out servers in cash for card receipts and rely on reporting - of course, yes, the servers have to report it but all the incentives to do the right thing are missing on both sides.
- seanmcdirmid 3y ago
  My sister worked as a waitress. Credit card tips were delivered to her on her paycheck minus credit card processing fees. I've never heard of a restaurant that would tip out cash for credit card transactions the same day. Now if they did do that, they might have to report those tips that it cashes out on the worker’s W2 along with the employees reported tips I think it is even more obvious for gig workers whose income are reported via 1099s and their tips are collected by a third party. I'm pretty sure Uber must report tips as general income. Now, it is possible for the rider to give a tip to their Uber driver directly as cash, and that wouldn't be necessarily reported (or to tip their delivery person directly rather than via app).