Restaurant detains group of diners for failing to pay mandatory tip

[Crazedclerkthe2nd]

http://consumerist.com/2012/05/diner...-gratuity.html

The restaurant says they are in the right because the diners refused to pay the full amount of their bill.

The diners say they are in the right because they paid for food, drinks and taxes, just not the mandatory tip (which they did not want to due to poor service).

[Andara Bledin]

This one's tricky.

Honestly, I'm on the side of the diners, since they made a point of paying for the goods provided, even though not all of it was actually delivered.

This is, at best, a contract dispute, and thus a civil, not criminal matter.

If I knew those people, I'd have them file a police complaint for unlawful detainment, which the police can back up with their own records, since they were actually present.

^-.-^

[Greenday]

I don't think restaurants should be allowed to require mandatory tips like that. Tips are performance based. Terrible performance, terrible tip. Good performance, good tip.

I have a couple issues with this story. Usually, when a place charges mandatory tips, it's stated in the menu. So it's their fault they didn't notice this and make a decision based on it. But holding people hostage over it? That doesn't fly with me either.

[Andara Bledin]

Except that legally, it doesn't matter whether it's stated or not. A gratuity is, by pretty much every definition, optional. Making a statement that your optional payment is now mandatory doesn't hold water. If they want it mandatory, then it has to be a service charge. (note: a person who managed hotels/restaurants/bars chimed in with this very comment on the article)

And even if it were a mandatory part of the contract, it is contingent upon receiving at least adequate service. Considering that they didn't even get all of the food that they ordered, the contract was broken by the restaurant, thus invalidating any claim they would have to force the customers to fulfill their side.

^-.-^

[crashhelmet]

Except that legally, it doesn't matter whether it's stated or not. A gratuity is, by pretty much every definition, optional. Making a statement that your optional payment is now mandatory doesn't hold water. If they want it mandatory, then it has to be a service charge. (note: a person who managed hotels/restaurants/bars chimed in with this very comment on the article)

And even if it were a mandatory part of the contract, it is contingent upon receiving at least adequate service. Considering that they didn't even get all of the food that they ordered, the contract was broken by the restaurant, thus invalidating any claim they would have to force the customers to fulfill their side.

^-.-^

That's why some restaurants call it a "Service Charge for parties of 6 or more." At that point, it's no longer a gratuity but a part of the cost of dining there.

Restaurants can detain you for failing to pay your bill. However, in this case, the legal technicality is going to come down to whether or not it's classified as a "Gratuity" or "Service Charge"

[bara]

And thus a serious issue with the 'gratuity' system.

In every job in the US that i am aware of that people receive tips, they get a lower hourly rate. Almost always less than minimum wage.
And some people will not tip under any circumstances no matter how good the service is. So if you work in a tip based industry and get a nasty string of people not tipping then you dont pay your bills.

Im split on this. Both sides have valid complaints. My first thought upon reading this 'if you didnt get your whole order, why didnt you speak up before the bill?"

That kinda makes me think the customers might have just been trying to get out of paying. Cause if I order cheese cake and dont get my cheese cake then I am going to be unhappy. Nothing is stated they tried to get out of paying for the food they never got.

[Andara Bledin]

It's pretty much a given that the tip system really needs to go.

It's great for some of those in the industry (particularly those who have no qualms about outright lying about what they get), and sucks for the majority.

As for whether they spoke up or not, that's not reported in the article. Without further detail, there's not much point in speculating.

My speculation, however, might be that they didn't want to further sour what was an otherwise enjoyable event. I've been in that position, and if the item was small enough, I'd have blown it off, left a crappy tip, and just moved on, which may be what these people were trying to do.

^-.-^

[Rapscallion]

It's pretty much a given that the tip system really needs to go.

The US style I would wholeheartedly agree with. From what I understand, the lower minimum wage came from an acknowledgement that a tipping culture existed to add reward to an enjoyable dining experience.

It's fair enough for the government to say that the people earning more should pay their fair share in taxes. There's little less anxious than a politician who thinks the government isn't taxing something that they could grab. However, when they mandated that tips were to be reported and taxed, they made no provision for the fact that not everyone receives the same income from them, and that servers were to be taxed on tips they potentially hadn't received. It also made no provision for customers to actually pay tips.

The tipping situation in the US is a legal grey area that nobody in government seems willing to resolve. I cannot blame the cops in the story who had no answer as to the legality of the statement on the menu.

Holding them captive is one of those things you do not do. However, we only have the side of the diners on this, and it's not unknown for otherwise reasonable people to turn into arseholes in larger groups. They claim the service was substandard, but were the customers? Not enough information, methinks.

Rapscallion

[Andara Bledin]

Actually, from what I understand, legally, if a server does not make at least minimum wage with both wage and tips combined, then the employer is required to make up the shortfall. In practice, I sincerely doubt this happens much, if at all.

It's like self-reporting taxable purchases made from other states: the only people who do it are generally businesses, who can be audited on that stuff. I don't know anyone who pays it except for the place I work.

^-.-^

[Rapscallion]

Fair enough - sort of culturally challenged, thanks for the info.

Rapscallion

[HYHYBT]

If you see that they add on a percentage to large groups, by placing an order you are agreeing to those terms. The menu does not guarantee the service will be good; it does not guarantee you will get refills as quickly as you would like, etc. It does guarantee you will be charged X amount. You knew that going in, and have no grounds to whine about it afterwards.

Doing otherwise just encourages those too cheap to pay (i.e., most groups that size or else they wouldn't have to have such a policy in the first place) to make up excuses.

Having said that, if they had such complaints (and especially if they made them known in a polite and timely manner) then it would make sense for the restaurant to voluntarily remove the charge. But it's their call to make, and you don't get to go "but I paid the bill!" when you only paid part of it any more than you can send a partial payment on any bill, mark it "paid in full," and expect them to accept that. You can dispute items on the bill, but it's not paid until it really is ALL paid or else the items in dispute have been removed.

[Nekojin]

I'm personally against the idea of allowing a business to pay less than Minimum Wage if the employees get tips. The tips should be over and above minimum wage, and the business should be as uninvolved in that as possible. Las Vegas casinos generally function that way.

I'm sympathetic to both sides when it comes to large parties, though. A large party is more work for the server, with a high likelihood of less tip, than the same number of people split up over a larger number of tables. So it already sucks for the server to be handling a large table if you don't enforce some sort of "service fee" that goes to the server. But at the same time, if the service truly does suck, a large party shouldn't be shafted just because they came as one group.

Edit to add: I also think that tips shouldn't be taxed, under the Gift principle - in US tax law, any person can give another person up to $13,000 per year as gifts over the course of the year, and that money isn't taxable. Tips pretty much are gifts. If there were fewer people trying to cut into the tipped worker's wages (the government, the employer), perhaps they'd be more likely to view the tip as a gift, and not an essential, EXPECTED part of their wages.

[crashhelmet]

I'm personally against the idea of allowing a business to pay less than Minimum Wage if the employees get tips. The tips should be over and above minimum wage, and the business should be as uninvolved in that as possible. Las Vegas casinos generally function that way.

I'm sympathetic to both sides when it comes to large parties, though. A large party is more work for the server, with a high likelihood of less tip, than the same number of people split up over a larger number of tables. So it already sucks for the server to be handling a large table if you don't enforce some sort of "service fee" that goes to the server. But at the same time, if the service truly does suck, a large party shouldn't be shafted just because they came as one group.

The casinos here in Vegas function that way because of unions. Union wages for a bartender are like $15.88 an hour right now, apprentices make around $13 and bar backs make about $11. i don't know what the servers union pays out. The non-union houses pay comparable wages to try and keep the union out. The smaller neighborhood bars typically pay the State/Federal minimum wage and yo make the rest up in tips.

After that, there are 3 ways tips can be reported for taxes.

1) Report what you make every day
2) 8% of total sales and comps
3) Flat rate per shift.

I've worked in all three types. The first is typically the most honest. Although I've known people report more or less than they made to make it look consistent. Fluctuations seem to raise questions from management and sometimes the IRS.

The second is the easiest to manage, and often times the amount reported is less than what's earned.

The last hurts people that work slow shifts. I was taxed for $90 a shift, regardless if the night was dead and I only made $30.

[Nekojin]

The casinos here in Vegas function that way because of unions. Union wages for a bartender are like $15.88 an hour right now, apprentices make around $13 and bar backs make about $11. i don't know what the servers union pays out. The non-union houses pay comparable wages to try and keep the union out. The smaller neighborhood bars typically pay the State/Federal minimum wage and yo make the rest up in tips.

I was speaking from the positions I've worked in Nevada - Busboy, change maker, and blackjack dealer. All of which make minimum wage + tips. It's also my understanding that waiters and waitresses at all but the ritziest of restaurants make min.wage + tips.

[bainsidhe]

Actually, from what I understand, legally, if a server does not make at least minimum wage with both wage and tips combined, then the employer is required to make up the shortfall. In practice, I sincerely doubt this happens much, if at all.

Technically yes, but it's often averaged per pay period. So if you have one shift where you make a pittance, it's balanced out by the other shifts where you performed better. Which I don't really agree with. It should go day by day.