Minimum Wage Fee

[lvstephanie]

I don't know how resturants pay their waitresses, but in our state they don't even make min. they make about 2.50 more or less an hour. they have to depend on the tips. Plus a few years ago the government  added another tax on them. they have to pay  the government 8% of what ever the tab is. So if they are only tip 10% of the tab, they don't make any money. I know because I had a part-time job working as a waitress. Also work as a part-time employee at a large retail until I went into management and had to drop the waitressing. Now some of the large places pay a lot better, but they then take the tips and put them in a jar so everyone gets piece of the pie.

The federal minimum wage for people that are tipped starts at $2.13/hr. as long as the person's tips added to their wage meets the minimum wage for non-tipped workers; however, if a person does not get that much in tips, their employer is supposed to increase their hourly wage accordingly. It is just assumed that they will be tipped, so the government includes the tip along with their hourly wage as the server's total income. Note that that is only the federal minimum wage, although different states have different minimum wages which may be more than the federal limit. For example, I believe that CA doesn't have a separate minimum wage for tipped-workers meaning they'll be paid the same minimum wage as non-tipped workers. Also more and more, restaurants are getting away from tipping in general, paying all of their workers at the same level of employment the same wage. This actually helps increase employee morale as servers won't complain that they were given fewer tables as someone else (and thus made less in tips), and the employees wages will be much more stable instead of being based on the whim of the customer.

Also you were slightly incorrect in saying that the government taxes 8% of the total tab... The government assumes the server will receive (on average) at least 8% of the tab in tips, so 8% of the tab is added to the taxable income of the server; however the taxable income reported is different than the amount taxed since different tax brackets will assess a different percentage of the taxable income as the tax that must be paid. For example, if a person gets $100 in tips and they are in the 15% tax bracket, then they'll only have to pay $15 in taxes. Additionally, since the government will only hold the server responsible for 8% of the tab as what they earn as tips, if the server gets tipped 10%, then the difference (eg 2% of the bill) doesn't have to be reported, so the server gets to keep that money tax free (technically, the server is supposed to report all of their tips as a part of their taxable income, but because the government will only investigate further if the tips reported as income fall below 8%, a server could just report only 8% and be fairly safe from not being audited). Thus in your example when you say that if they get 10%, they don't make any money is completely false; they get their minimum wage plus tips (only some of which are taxed at their appropriate tax bracket). I do know that some restaurants will also withhold a certain percentage of the tab and report those withholdings on the server's W2 at the end of the year so that the server doesn't have to keep track of the tip-income for themselves. Although doing that means that the server will be out that money in the short-term, after completing their taxes, the server should get most of that withholding back (except for what is actually needed to pay their income tax). Finally, the taxable tip-income is only on the amount of the tips that that particular server actually keeps. Thus if the server also gives some of their tips to the busboys, maitre d', etc. they should subtract that amount from the tips that get reported to the IRS.

[melissaotto1982]

I think that that is just a poor way to handle it.

[Tresbn00]

I think that minimum wage is in place for positions/jobs that don't need the skills developed through specialized training and further education.  They meet the needs of an economy. I think that it is only natural that we will see a rise in costs, for everything, when we raise the minimum wage. Some people have invested hundreds of thousands of dollars, sacrificed four years of their lives, and worked really hard so that they could get a higher paying job. Raising the minimum wage, exorbitantly, threatens to undo all the basic precepts people have about higher education.  Why should we go to school when we can make a decent wage washing dishes. If there isn't a big gap for all of the extra hard work...why go to school? I think restaurants are crazy for charging more to cover minimum wage with a silly little extra charge at the bottom. They should just raise their product prices and I would not go to a restaurant like that.

[natashaspy]

while personally I understand the reasoning, I believe populations in general don't argue as much about a small increase in prices as they do about a blatant add-on to their bill.  its an out of sight out of mind thing I think

[patapon555]

It's really expected and nobody should be surprised about it.

[holmesch22]

wow that is a shame that ain't no money

[ladavia89]

I'd rather go to a restaurant that adds a simple $0.35 to the bill than one that automatically adds gratuity to your bill.

[mrisha]

I saw that same story.  They went about it the wrong way because no one likes to be told they have to pay extra to supplement the employees paycheck.  As usual, they should have just increased the prices on meals as they usually do.  No fuss.

[countrygirl12]

I think that minimum wage is in place for positions/jobs that don't need the skills developed through specialized training and further education.  They meet the needs of an economy. I think that it is only natural that we will see a rise in costs, for everything, when we raise the minimum wage. Some people have invested hundreds of thousands of dollars, sacrificed four years of their lives, and worked really hard so that they could get a higher paying job. Raising the minimum wage, exorbitantly, threatens to undo all the basic precepts people have about higher education.  Why should we go to school when we can make a decent wage washing dishes. If there isn't a big gap for all of the extra hard work...why go to school? I think restaurants are crazy for charging more to cover minimum wage with a silly little extra charge at the bottom. They should just raise their product prices and I would not go to a restaurant like that.

I agree with you on min wage does not need to be increased. Esp not to $15 an hour.  But it irritates me when people insult people who did not go to college.  Or when people insult adults who are working at a job like McDonald's.  There are people who are doing the best they can.  Not everyone could afford to go to college.  Not everyone could get $100,000 plus in loans to go to school.  Seems to me the person working for min wage and no debt is in better shape than the person who went to college and has over $100,000 in school loans.