You might want to read it again
Service Charges: A compulsory charge for service, for example, 15 percent of the bill, is not considered a tip under the FLSA. Sums distributed to employees from service charges are not tips, but may be used to satisfy the employer’s minimum wage and overtime pay obligations under the FLSA.
A place implementing a service charge cannot classify it as a tip, even if it’s 100% passed onto the employee… a mandatory charge is not a tip, even if the restaurant encourages you to treat it that way. Certain states and jurisdictions tax tips differently than regular wages, and service charges are wages, not tips.
Rivalarrival@lemmy.today 10 months ago
A tip is money paid directly to the worker providing the service. The restaurant can’t keep any part of it. They are not taxed on it, either as sales tax or income tax. That money is only counted as income to the worker.
This service fee was subject to sales tax. It will also be subject to income tax by the restaurant. The restaurant gets to keep as much of it as they want.
“Mandatory gratuities” are tips that the restaurant obligates the customer pay to the waitstaff. Where these are charged, you are not allowed to stiff the waitstaff. The restaurant cannot keep any part of that gratuity.
Tips/gratuities and service fees are not the same thing at all.
fishos@lemmy.world 10 months ago
I’m not talking the law, I’m talking what the tip actually is in practice. It’s the service charge. You’re paying for the server to serve you. The tip isn’t for the food. It for the server serving. Just because you’ve been conned and guilted into accepting this as normal doesn’t make it right.
Rivalarrival@lemmy.today 10 months ago
A “tip” is for the server serving.
A “mandatory gratuity” is for the server serving.
A “service fee” is for the restaurant existing. Service fees do not go directly to the staff. The restaurant keeps most of that service fee.
I mentioned taxes not to suggest that the practice is legitimate, but to demonstrate that the money is income to the restaurant. Tips are not income to the restaurant. Tips are income only to the staff.
I acknowledge that there is no significant distinction to the customer between a tip and a service fee, but there is a highly relevant distinction between the two for the restaurant and the server. The service fee this restaurant is charging is money stolen from its staff.
This restaurant could support its workers by adding a mandatory gratuity to the bill, in which case I would agree that no tips should be paid. But a service charge is not a tip. A service charge is not a gratuity. A service charge is not paid to the servers. A service charge is kept by the restaurant.