Answer Man

Answer Man: Is it legal for restaurants to include mandatory tip?

Q. Eight of us recently went to celebrate at a local restaurant. When the waitress gave us our check, it included a mandatory 18 percent tip. I thought such charges were ruled illegal last year — in other words, all tips now must be at the discretion of the customer.

— S.D., of Freeburg

A. Perhaps some servers might wish they were illegal, but, no, restaurants are still free to add a mandatory fee if they wish. The only thing that changed on Jan. 1, 2014, was how the Internal Revenue Service classified the charge and how restaurants handle their bookkeeping.

The change actually came in June 2012, when the IRS issued Revenue Ruling 2012-18, which said that the mandatory extra fee restaurants often add to large parties is not a “tip” at all. A tip, it ruled, must be voluntary in every sense of the word. Customers must feel free to leave any amount they choose — or nothing at all. Instead, such mandatory add-ons are a “service charge,” a fee that must be paid if a customer wants to leave the restaurant without handcuffs.

This is much more than just simple semantics. You see, if an employee relies on tips for part of his or her income, an employer only has to pay a minimum wage of $2.13, according to the Department of Labor. Only if the employee doesn’t make enough in tips to meet the prevailing minimum wage (now $7.25 at the federal level) does the employer have to make up the difference.

But the IRS knows this has led to lots of number-fudging. For example, all employees who make more than $20 in tips must report them to the employer each month so that taxes can be withheld. But if the employee is less than honest and the employer looks the other way or under reports tip income, both parties can come out ahead while the federal government is left holding the bag.

By all accounts, that’s why the IRS issued its 2012 ruling. By classifying mandatory “tips” as a service charge, it is now the employer’s duty to monitor and record them. Similarly, it is the employer’s obligation to make all withholding and send it to the IRS. As a result, it is now the employer who will feel the heat if the IRS suspects that he or she is being less than honest with reporting those service charges.

The end result, the IRS hopes, is less cheating and more taxes for the federal coffers. But, as Heather Long wrote in a 2013 issue of The Guardian, it’s being done on the backs of waiters and waitresses.

“The reason servers in the U.S. love tips is because they know at the end of each day how much they got,” Long wrote in an article entitled “One More Reason It’s Crap to be a Waiter in America.” “They get to take that money home that night. Yes, they will have to report it and pay some tax on it later on, but they get that cash in hand right away.

“If restaurants have to start treating automatic gratuities as wages, then the waiter doesn’t get that money that same night. It would come as part of a formal paycheck — often handed out every two weeks — and taxes would already be taken out. To put it another way: It would take longer to get the money, and it would be less up front. That’s not good for a college student or parent trying to earn extra for day-to-day life.”

No wonder, as Long reported, one-time Applebee’s waitress Chelsea Welch was so incensed in 2013 when a woman in a large group left no tip along with a snarky note that read, “I give God 10 percent. Why do you get 18?” (Welch posted the note on line anonymously but was fired when she was identified.)

“Tips are not optional,” Welch said later. “They are how waiters get paid in America. Restaurant workers, at the end of the day they want out. They hope for a job where they’re going to be respected, paid a predictable wage, where they can count on it.”

Seems to me there has to be a more rational way to compensate such essential workers.

Today’s trivia

For what is Meriwether Lewis Clark Jr. — grandson of the famous 19th-century explorer — best remembered?

Answer to Wednesday’s trivia: When “Star Trek” creator Gene Roddenberry was looking to equip Dr. Leonard “Bones” McCoy’s sick bay on the starship Enterprise, he eventually decided to spice things up a little.

In “The Man Trap” — the first episode ever aired — an alien shapeshifter sees Yeoman Janice Rand carrying a tray of food to a crew member. Because the alien is obsessed with salt, Roddenberry asked prop director Irving Feinberg to find a futuristic salt shaker that the yeoman would place on the tray.

“Feinberg went out and bought a selection of very exotic-looking salt shakers,” Roddenberry recalled later in “The Making of Star Trek.” “It was not until after he brought them in and showed them to me that I realized they were so beautifully shaped and futuristic that the audience would never recognize them as salt shakers. I would have had to have a character say, ‘See, this is a salt shaker.’”

What happened next was literally an out-of-this-world advance in medical treatment.

“So I told Irving to go down to the studio commissary and bring me several of their salt shakers,” Roddenberry wrote in 1970. “But as he turned to go, I said, ‘However, those eight devices you have there will become Dr. McCoy’s operating instruments.’ For two years now, the majority of McCoy’s instruments in Sick Bay have been a selection of exotic salt shakers, and we know they work, because we’ve seen them work. Not only has he saved many a life with them but it’s helped keep our prop budget costs low.”

Completely logical, as Mr. Spock would have said.

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