Community Chat

[Teddie]

Giving cash to the server is a nice idea—but the downside is that you may not have enough or the right amount of cash. I wonder how that is handled. 

[gertrudecloset]

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@CoffeeNut wrote:

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@Love my grandkids wrote:

Both my late DH and I and later our son and his wife have a policy of giving a tip in cash directly to the server. 

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That's what I do too.  If you put the tip on the credit card then those wages are added to their paychecks and taxes are taken out.   With cash it's immediate income and rarely taxes are taken out because they don't report it. 

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I don't think of any of what you said is true in every instance.  There's a lot to learn about tipping and how the various states follow the laws set by the U.S. Department of Labor  

Credit Card Processing Fees

Q. Tips belong to the employee, but can employers ever make any deductions from an employee's tips? This issue commonly comes up with credit card processing fees. When a customer leaves a tip for an employee on a credit card, can the employer deduct the credit card processing fee from the tips?

A. Federal courts and the Department of Labor have generally held that employers may subtract a proportionate amount of the processing fee from an employee's tips, as long as the employee still receives minimum wage. For example, if the customer pays by credit card and the processing fee is 3%, the employer may pay the employee 97% of the tip left by the customer and keep 3%. However, some states have more restrictive laws. In California, for instance, employers may not deduct any portion of the credit card processing fee from the employee's tips.

[gertrudecloset]

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@Teddie wrote:

Giving cash to the server is a nice idea—but the downside is that you may not have enough or the right amount of cash. I wonder how that is handled. 

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You should anticipate that when you know you're doing something that will require a tip.  If you don't pre plan an event where you'd need to tip, then keep that in mind during your activities.  If that's ordering a meal, take into consideration the cost of your meal plus the gratuity which is easily 15% of your bill.

[patbz]

We almost always pay restaurant bills via credit card but I always tip in cash.  If I don't have correct amount, I go up to cashier and ask her to break my bill into desired denominations.  We tip generously but servers don't usually make a great wage and cash tips help, especially since IRS assumes they are getting around 10%, so an 18-25% tip really helps the server.  For the IRS reason, even for bad service I still leave 10% ( sometimes circumstances are outside a server's control.  When I was in college I was a waitress one Summer; the curse of that is that I am physically unable not to tip!

[gertrudecloset]

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@patbz wrote:

We almost always pay restaurant bills via credit card but I always tip in cash.  If I don't have correct amount, I go up to cashier and ask her to break my bill into desired denominations.  We tip generously but servers don't usually make a great wage and cash tips help, especially since IRS assumes they are getting around 10%, so an 18-25% tip really helps the server.  For the IRS reason, even for bad service I still leave 10% ( sometimes circumstances are outside a server's control.  When I was in college I was a waitress one Summer; the curse of that is that I am physically unable not to tip!

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@patbzNot only that, but in some instances waiters share their tips in a pool with other service employees that might not otherwise receive a tip.  Like the guy who brings the water to the table (busboy) and set you up for your meal.  That's called tip pooling.  It's legal and it depends on where.

I think I will be asking from now on if my waitress/waiter has to pool his/her tip.

[gertrudecloset]

Tip Pooling

Under federal law, employers can require employees to participate in a tip pool or otherwise share their tips with other employees. In a tip pool, employees have to chip in a portion of their tips, which are then divided among a group of employees. However, federal law prohibits employers from keeping any portion of the tips or from including supervisors or managers in the tip pool. This is true regardless of whether the employer takes a tip credit or pays employees the full minimum wage.

For a long time, there was a debate about whether employees could be required to share their tips with employees who did not regularly receive tips. For example, some employers include all employees in a tip pool, which allows "back-of-house" staff—such as cooks or dishwashers—to receive a portion of the tips left for servers, bartenders, and other employees who interface with customers.

In March of 2018, the Fair Labor Standards Act was amended to clarify this issue. Employers that do not take a tip credit and pay employees the full minimum wage may establish a tip pool that includes back-of-house employees. However, employers that do take a tip credit must limit the tip pool to employees who customarily and regularly receive tips.

[Teddie]

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@gertrudecloset wrote:

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@Teddie wrote:

Giving cash to the server is a nice idea—but the downside is that you may not have enough or the right amount of cash. I wonder how that is handled. 

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You should anticipate that when you know you're doing something that will require a tip.  If you don't pre plan an event where you'd need to tip, then keep that in mind during your activities.  If that's ordering a meal, take into consideration the cost of your meal plus the gratuity which is easily 15% of your bill.

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We don’t preplan because we pay with cc and we tip more than 15%. We also usually pay for everyone around the table and it amounts to a substantial tip, which makes cash not always practical. 

[gertrudecloset]

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@Teddie wrote:

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@gertrudecloset wrote:

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@Teddie wrote:

Giving cash to the server is a nice idea—but the downside is that you may not have enough or the right amount of cash. I wonder how that is handled. 

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You should anticipate that when you know you're doing something that will require a tip.  If you don't pre plan an event where you'd need to tip, then keep that in mind during your activities.  If that's ordering a meal, take into consideration the cost of your meal plus the gratuity which is easily 15% of your bill.

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We don’t preplan because we pay with cc and we tip more than 15%. We also usually pay for everyone around the table and it amounts to a substantial tip, which makes cash not always practical. 

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Well that makes sense! YOU never have to worry about having your 15% +.  However, since you posed the question for cash payers; my answer is applicable as a solution for those who don't handle these matters like you do. 

[Drythe]

@patbz 

I waited tables weekend nights at a restaurant frequented by alumni on game weekends all through undergraduate and graduate school.  No easy job.  I tip cash into the servers hand with a thank you attached.  Too much goes on behind the scenes for me to do otherwise.  

Cash works for me.

[Tinkrbl44]

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@Love my grandkids wrote:

Both my late DH and I and later our son and his wife have a policy of giving a tip in cash directly to the server. 

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@Love my grandkids 

I've always done that, too, but didn't have the right denominations for a tip.  (Maybe that's why I've never seen this before.)