That's Un-American

Apple pie, baseball, hotdogs, the previous are many times appended to the phrase “That’s American as...” Here’s a story I find un-American.

A young individual close to me, is employed in a table waiting capacity at Olga’s Kitchen. Yesterday evening, this individual returned from picking up their paycheck, and I overheard, and commented, on the following, and I am paraphrasing.

Olga’s employee:  “Well, I picked up my check.  I earned eighty-eight bucks, but my check is only for fourteen dollars and some change”

Me:  “What?  How come?”

Olga’s employee:  “Because I have to claim tips.”

Me:  “Well, claim less tips.  The government has no clue as to how much you make in tips, unless you tell them.”

Olga’s employee:  “I can’t.”

Me:  “What do you mean you can’t claim less tips?”

Olga’s employee:  “We have to claim at least fifteen percent of our sales for the night in tips or the company disciplines us.”

Me:  “Come on, that can’t be true.”

Olga’s employee:  Seriously, if we claim less than fifteen percent of sales as tips, the manager posts our names and we can also be removed from the work rotation.”

Me:  “That just isn’t right”

Think about the above conversation, people, and what that means.  Think about what it means when a business is part of the IRS’s enforcement arm.  I’ll never eat at an Olga’s again, they’re un-American.

Posted by on 07/28 at 02:23 AM

  1. In 2002, the Supreme Court held that the IRS could “estimate” tips paid to restaurant employees, rather than relying on actual receipts. This is probably what led to the restaurant’s policy described in your post.

    Posted by Skip Oliva  on  07/28  at  06:00 AM

  2. Thanks for the info, Skip.  It still galls me that an employer is strong arming their employees regarding tips received.

    Posted by  on  07/28  at  07:12 AM

  3. Hi John,
    As the owner of a restaurant, I know what this is all about and will try to shed some light. My servers have this same dilemma but have no complaints. When “payday” comes at my place, the only people that get $ on their checks are the cooks and bussers. The servers get 0’s. My servers also claim 15% of gross sales as tips earned. Fortunately, our tip average is over 18% so they are actually claiming less than they receive. The unfortunate thing is when a server receives less than 15% or the average tips for the evening are 15% or less. The other thing servers have to deal with is an hourly wage less than minimum because they are tipped employees. If you add up my top servers hourly wages and tips reported, he averages about $15.00 an hour. In contrast, as an owner, my salary and my hours average about $6.00 an hour. I think the key for “your server” is to gain experience and move up to higher end establishments that have a high tip average.

    Posted by  on  07/28  at  11:26 AM

  4. Thanks for the advice, Tom.

    Posted by  on  07/28  at  11:51 AM

  5. One more thing to remember John, for every dollar an employee pays toward taxes, the employer pays two, per employee. Employers would love for employees to pay less tax.

    Posted by  on  07/28  at  12:40 PM

  6. John, if much less than 15% gets reported then the least that’s going to happen is that the IRS is going to crawl all the way up their ass. They have little choice if they want to operate the business. Blame the government, not the business.

    Posted by John T. Kennedy  on  08/02  at  08:18 AM

  7. A few weeks ago I asked a guy I know who waits at a place I’m often in drinking beers and ... but that’s another story.

    Anyway he said that if you pay via credit card, the tip (if there is one) is recorded.  If not, then the tip is automatically estimated to be 13%.  Dunno why, but that’s what he said.

    The clear lesson here is: tip on a credit card only if you really want to stiff your waiter/ress. 

    If you are a good libertarian, try to carry cash and tip using it.  You don’t have to pay the main amount in cash - use credit for that, no problem.  But as long as the tip is above 13% (or 15% or whatever), if you tip in cash then you are encouraging tax evasion.

    Posted by Leonard  on  08/13  at  01:01 PM

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