7 ms·

There is a lot of talk about how people who get tips generally get a very low wage to start and if they don't get good tips they make a lot less. The federal m

There is a lot of talk about how people who get tips generally get a very low wage to start and if they don't get good tips they make a lot less. The federal minimum wage is $7.25 per hour (effective July 24, 2009).[1] Furthermore, the federal government requires a wage of at least $2.13 per hour be paid to employees that receive at least $30 per month in tips. If wages and tips do not equal the federal minimum wage of $7.25 per hour during any pay period, the employer is required to increase cash wages to compensate.[2] So while it may be true that servers might get a base pay of something stupid like $2.13, they are guaranteed that they will make at least the federal minimum wage (which still sucks but that is a different topic). And... many states go above and beyond what the federal government requires[3]. I'm getting a little tired of the whole "but they live off tips" rhetoric. Tip what you want and don't let society pressure you into tipping more than you desire. For me, since sales tax is hovering in the 9% level where I am, I usually just double that and adjust accordingly (based on service quality, etc). That also makes it easy to not tip based on the bill+tax amount that they give you on the "sub total" line. [1] http://www.dol.gov/whd/minimumwage.htm http://www.dol.gov/whd/minimumwage.htm [2] http://www.dol.gov/elaws/faq/esa/flsa/002.htm http://www.dol.gov/elaws/faq/esa/flsa/002.htm [3] http://www.dol.gov/whd/state/tipped.htm http://www.dol.gov/whd/state/tipped.htm

madeofpalk 12y ago
> guaranteed that they will make at least the federal minimum wage Guaranteed legally, and guaranteed in reality are two different things. If I pay someone to drive me somewhere, it's legally guaranteed that they're licensed driver by the government by the appropriate regulator. But in reality, UberX. I would like to know how often employee's end up following this up with their employer, and how often the employer makes up their wage.
- parennoob 12y ago
  This. I come from a culture where tipping implies "reward for good service". But in the US, I always feel that if I tip less than the expected 20%, practically I may be cutting into someone's wages. If they demand the difference, they may end up getting fired by their boss. Does anyone know if these workers are that helpless in practice? Or can they make a single call and get the restaurant owner in trouble if he/she doesn't make up their wages to the minimum? (As an H1B employee, I know well that the theoretical extent of what you can do and the practical extent are sometimes far apart.) Interestingly, I've seen that this perceived "power/responsibility to ruin someone's job" makes it so that as an outsider, I tip more than the average. I've seen American friends tip 10% when I was tipping 20% for 'average, not great' service.
  - johngalt 12y ago
    They have to report their tips for tax purposes. If the reported wages don't add up to minimum, then the restaurant can get in trouble from a whole host of government agencies. Even if the employee does nothing, the IRS will come calling assuming that tips are being under-reported.
  - pmoriarty 12y ago
    It's even worse in Europe, where a "mandatory tip" is already included in your bill by the time you get it. The service in Europe tends to be of a much lower quality than in the US as well. In general, the US is a consumer paradise compared to Europe. In the US, it's better to be a consumer than an employee. In Europe it's the opposite.
    - ma2rten 12y ago
      It's even worse in Europe, where a "mandatory tip" is already included in your bill by the time you get it. There is no "mandatory tip" in Europe. It's actually very simple: you pay for a service, the business pays it's employees. How much the employees get payed is not your concern as a customer. You can tip if you received excellent service, but that is totally optional as it should be. In general, the US is a consumer paradise compared to Europe. That is not true. US is business friendly. Europe is consumer and employee friendly. Just some examples: VAT is included in the price, all electronics include 2 year warranty, if you pay CRV you can return the bottle at the shop, shops must except returns, ...
      - dantheman 12y ago
        Europe is not consumer friendly at all. Service is terrible, many places only accept cash, more accept debit cards, most don't accept credit cards. Store hours are terrible.
        elbear 12y ago
        Where in Europe have you been? The diversity between countries is big and even in the same country you encounter differences.
DanBC 12y ago
Is minimum wage a living wage? $7.25 * 44 hours per week * 51 weeks per year is still only 15,950 US$ That's gross, not net. I'm not convinced that people would pay extra even if they didn't have to tip to a company that paid a living wage but charged more.
- comrh 12y ago
  > I'm not convinced that people would pay extra even if they didn't have to tip to a company that paid a living wage but charged more. Probably could be a really interesting research topic but Uber comes to mind as part of the reason I loved it at the beginning was the lack of tipping.
- sukilot 12y ago
  It's not about the living wage, it's about the audacity of paying a bit too much to be chauffeured around the city.
megablast 12y ago
The problem is that it creates a system that is easy to abuse, by the employer.
- prawn 12y ago
  And in a small business (restaurants and other service providers), that will happen either intentionally or through time pressure, inexperience, etc. I tend not to like systems that rely on something like this in theory rather than operate from a stronger structure.
lifeformed 12y ago
They do "live off tips" though. They take the job with the expectation of making more than minimum wage.
acjohnson55 12y ago
I'm all for changing the absurd system where tipping is practically required for one where a reasonable wage is paid and pre-factored into the cost of the service. But if we all just stopped tipping suddenly, it's the most vulnerable people who bear the brunt until the system adjusts. I think that's pretty morally suspect.
- themartorana 12y ago
  Many changes that end up being pretty good hurt the most vulnerable in the short term. The biggest example of this is the Industrial Revolution. It's tough to say whether you apply moral leanings towards no disruption at all vs. "in the long term" benefits to everyone, including the most vulnerable among us. I'm not going to offer an answer, because I'm not sure I have one. I don't want anyone to suffer, but I want everyone to be better off in the end. Cabbies seem like they're in the heart of every controversy these days - from medallions losing huge amounts of value to wage/tip adjustments. In the end, do we all benefit?
- mc32 12y ago
  A small sprinkle of restaurants[1] have begun trying an alternative where tips are disallowed but include some type of additional charge on your bill and in return the staff get paid a higher wage. According to another article this has resulted in better service from the staff --and that would seem to be opposite of what you might get from continental servers (who customarily don't get tips), so it bears watching. [1]http://www.cbsnews.com/news/more-restaurants-adopting-no-tipping-policy/ http://www.cbsnews.com/news/more-restaurants-adopting-no-tip... PS. The strata of restaurant trying this approach might skew results, so, not sure what results one might get in a broad spectrum of restaurants.
  - pmoriarty 12y ago
    You don't have to wait for the results to come in. Just go to Europe, where this has been standard practice for decades if not longer. For what it's worth, in my own personal experience and that of others I've talked with, the service in Europe is markedly worse than what you usually get in the US. But anecdotes like mine are too little to go on. I'd be interested to hear if there's been any cross-cultural research on the subject.
mikeash 12y ago
The fact that servers are guaranteed minimum wage does not change "they live off tips" one bit. $7.25 isn't enough to reasonably live on. Like it or not, you're paying their rent with your tips. That doesn't mean you're obligated, but it does mean you have a strong influence over their financial well-being, even with minimum wage guarantees.
- jack-r-abbit 12y ago
  I did acknowledge that the minimum wage sucks. But it sucks the same for all minimum wage jobs... the ones that don't even have the chance at getting tips. How much it costs to live is a much broader topic than this and should include all jobs that get low wages. I think tips fall into the same rough category as bonuses and commissions. People who get bonuses have to accept that they are not guaranteed. If you take a job expecting a bonus and you don't get it then you expected too much. You still get your guaranteed salary. Same with commission jobs. They usually have a base salary and then commissions are paid on top of that based on sales or what ever the metric is for that job. But if you don't perform very well one month and commissions are down... well... better luck next month. Bottom line, don't go in expecting the highest possible outcome. Expect the lowest. If you can't live off that then you take a risk taking the job. If you do end up higher than lowest possible outcome then your risk paid off.
  - mikeash 12y ago
    Bonuses and commissions can be really different. Sometimes they're just supplemental. Sometimes they're the real pay, and the salary is just a nominal token effort. For many jobs, expecting the lowest isn't realistic. You wouldn't take that job if you expected the lowest, because the lowest is unacceptably low and almost never actually happens. Waiters get tipped. That's the expectation and the reality. Anyone who takes a waiter job not expecting to be tipped is deluded (assuming they don't work for one of the few places that ban it).
ori_b 12y ago
> There is a lot of talk about how people who get tips generally get a very low wage to start and if they don't get good tips they make a lot less. Minimum wage is a very low wage to start. I don't know any taxi drivers, but most waiters I know expect significantly more than minimum wage.
mrgriscom 12y ago
The problem is that taxi drivers don't really get paid wages at all. Most of them are "independent contractors" that rent the taxi/medallion from someone for the duration of their shift. If they don't make enough to cover that cost, they lose money. To me that is the most messed up part of this entire system -- that the wealth created by the enforced scarcity of taxi medallions accrues to a small owning class that shoulders none of the risk.

madeofpalk 12y ago

> guaranteed that they will make at least the federal minimum wage Guaranteed legally, and guaranteed in reality are two different things. If I pay someone to drive me somewhere, it's legally guaranteed that they're licensed driver by the government by the appropriate regulator. But in reality, UberX. I would like to know how often employee's end up following this up with their employer, and how often the employer makes up their wage.

parennoob 12y ago
This. I come from a culture where tipping implies "reward for good service". But in the US, I always feel that if I tip less than the expected 20%, practically I may be cutting into someone's wages. If they demand the difference, they may end up getting fired by their boss. Does anyone know if these workers are that helpless in practice? Or can they make a single call and get the restaurant owner in trouble if he/she doesn't make up their wages to the minimum? (As an H1B employee, I know well that the theoretical extent of what you can do and the practical extent are sometimes far apart.) Interestingly, I've seen that this perceived "power/responsibility to ruin someone's job" makes it so that as an outsider, I tip more than the average. I've seen American friends tip 10% when I was tipping 20% for 'average, not great' service.
- johngalt 12y ago
  They have to report their tips for tax purposes. If the reported wages don't add up to minimum, then the restaurant can get in trouble from a whole host of government agencies. Even if the employee does nothing, the IRS will come calling assuming that tips are being under-reported.
- pmoriarty 12y ago
  It's even worse in Europe, where a "mandatory tip" is already included in your bill by the time you get it. The service in Europe tends to be of a much lower quality than in the US as well. In general, the US is a consumer paradise compared to Europe. In the US, it's better to be a consumer than an employee. In Europe it's the opposite.
  - ma2rten 12y ago
    It's even worse in Europe, where a "mandatory tip" is already included in your bill by the time you get it. There is no "mandatory tip" in Europe. It's actually very simple: you pay for a service, the business pays it's employees. How much the employees get payed is not your concern as a customer. You can tip if you received excellent service, but that is totally optional as it should be. In general, the US is a consumer paradise compared to Europe. That is not true. US is business friendly. Europe is consumer and employee friendly. Just some examples: VAT is included in the price, all electronics include 2 year warranty, if you pay CRV you can return the bottle at the shop, shops must except returns, ...
    - dantheman 12y ago
      Europe is not consumer friendly at all. Service is terrible, many places only accept cash, more accept debit cards, most don't accept credit cards. Store hours are terrible.
      - elbear 12y ago
        Where in Europe have you been? The diversity between countries is big and even in the same country you encounter differences.

DanBC 12y ago

Is minimum wage a living wage? $7.25 * 44 hours per week * 51 weeks per year is still only 15,950 US$ That's gross, not net. I'm not convinced that people would pay extra even if they didn't have to tip to a company that paid a living wage but charged more.

comrh 12y ago
> I'm not convinced that people would pay extra even if they didn't have to tip to a company that paid a living wage but charged more. Probably could be a really interesting research topic but Uber comes to mind as part of the reason I loved it at the beginning was the lack of tipping.
sukilot 12y ago
It's not about the living wage, it's about the audacity of paying a bit too much to be chauffeured around the city.

megablast 12y ago

The problem is that it creates a system that is easy to abuse, by the employer.

prawn 12y ago
And in a small business (restaurants and other service providers), that will happen either intentionally or through time pressure, inexperience, etc. I tend not to like systems that rely on something like this in theory rather than operate from a stronger structure.

lifeformed 12y ago

They do "live off tips" though. They take the job with the expectation of making more than minimum wage.

acjohnson55 12y ago

I'm all for changing the absurd system where tipping is practically required for one where a reasonable wage is paid and pre-factored into the cost of the service. But if we all just stopped tipping suddenly, it's the most vulnerable people who bear the brunt until the system adjusts. I think that's pretty morally suspect.

themartorana 12y ago
Many changes that end up being pretty good hurt the most vulnerable in the short term. The biggest example of this is the Industrial Revolution. It's tough to say whether you apply moral leanings towards no disruption at all vs. "in the long term" benefits to everyone, including the most vulnerable among us. I'm not going to offer an answer, because I'm not sure I have one. I don't want anyone to suffer, but I want everyone to be better off in the end. Cabbies seem like they're in the heart of every controversy these days - from medallions losing huge amounts of value to wage/tip adjustments. In the end, do we all benefit?
mc32 12y ago
A small sprinkle of restaurants[1] have begun trying an alternative where tips are disallowed but include some type of additional charge on your bill and in return the staff get paid a higher wage. According to another article this has resulted in better service from the staff --and that would seem to be opposite of what you might get from continental servers (who customarily don't get tips), so it bears watching. [1]http://www.cbsnews.com/news/more-restaurants-adopting-no-tipping-policy/ http://www.cbsnews.com/news/more-restaurants-adopting-no-tip... PS. The strata of restaurant trying this approach might skew results, so, not sure what results one might get in a broad spectrum of restaurants.
- pmoriarty 12y ago
  You don't have to wait for the results to come in. Just go to Europe, where this has been standard practice for decades if not longer. For what it's worth, in my own personal experience and that of others I've talked with, the service in Europe is markedly worse than what you usually get in the US. But anecdotes like mine are too little to go on. I'd be interested to hear if there's been any cross-cultural research on the subject.

mikeash 12y ago

The fact that servers are guaranteed minimum wage does not change "they live off tips" one bit. $7.25 isn't enough to reasonably live on. Like it or not, you're paying their rent with your tips. That doesn't mean you're obligated, but it does mean you have a strong influence over their financial well-being, even with minimum wage guarantees.

jack-r-abbit 12y ago
I did acknowledge that the minimum wage sucks. But it sucks the same for all minimum wage jobs... the ones that don't even have the chance at getting tips. How much it costs to live is a much broader topic than this and should include all jobs that get low wages. I think tips fall into the same rough category as bonuses and commissions. People who get bonuses have to accept that they are not guaranteed. If you take a job expecting a bonus and you don't get it then you expected too much. You still get your guaranteed salary. Same with commission jobs. They usually have a base salary and then commissions are paid on top of that based on sales or what ever the metric is for that job. But if you don't perform very well one month and commissions are down... well... better luck next month. Bottom line, don't go in expecting the highest possible outcome. Expect the lowest. If you can't live off that then you take a risk taking the job. If you do end up higher than lowest possible outcome then your risk paid off.
- mikeash 12y ago
  Bonuses and commissions can be really different. Sometimes they're just supplemental. Sometimes they're the real pay, and the salary is just a nominal token effort. For many jobs, expecting the lowest isn't realistic. You wouldn't take that job if you expected the lowest, because the lowest is unacceptably low and almost never actually happens. Waiters get tipped. That's the expectation and the reality. Anyone who takes a waiter job not expecting to be tipped is deluded (assuming they don't work for one of the few places that ban it).

ori_b 12y ago

> There is a lot of talk about how people who get tips generally get a very low wage to start and if they don't get good tips they make a lot less. Minimum wage is a very low wage to start. I don't know any taxi drivers, but most waiters I know expect significantly more than minimum wage.

mrgriscom 12y ago

The problem is that taxi drivers don't really get paid wages at all. Most of them are "independent contractors" that rent the taxi/medallion from someone for the duration of their shift. If they don't make enough to cover that cost, they lose money. To me that is the most messed up part of this entire system -- that the wealth created by the enforced scarcity of taxi medallions accrues to a small owning class that shoulders none of the risk.