Hey Bartender

I'VE BEEN AVOIDING answering certain questions since the inception of Hey Bartender, but in light of recent events, I thought I'd venture out toward razors edge this week.

Why do servers and bartenders complain when they don't receive a 20% gratuity?

In recent weeks, a fierce and heated discussion has raged among servers and bartenders about gratuities. In part, this discussion was prompted by a statement that was supposedly made by a television host on their soon-to-be-famous talk show. I have yet to find any evidence that this person actually made this statement. The best that I could do was find a post on the Snopes website that claims that the statement was never made. For the Snopes impaired, this website is dedicated to the debunking of hoaxes and urban legends. So, for the purposes of this post, we'll go with just the facts. The only fact that I have is that there is a rumor that a television personality said that just because we are in a recession doesn't mean that you shouldn't go out to eat....just tip less when you do. Again, this is just a rumor, but for those of us in the restaurant industry, the implications of such a statement are almost immeasurable.

Here's why. In most countries, a gratuity or tip, as it is sometimes called, is a voluntary extra payment given to someone for service above the price of that particular service. It's considered a social custom and the size of the gratuity varies among cultures. In fact, in some countries, it's an insult to offer a gratuity.

In the United States, a gratuity is more than a social custom, it is how servers and bartenders earn a living. This is how it works. Some time in the recent past, the federal government figured out that people in the service industry, especially servers and bartenders, were making lots of money that wasn't necessarily being reported, so they devised a set of laws to help them get their share. Among them is something called a legal wage reduction. That's why, although minimum wage has gone up significantly over that last few years, servers and bartenders do not reap that benefit. In fact, in Virginia the minimum wage for a server is $2.13/hour, and because of the legal wage reduction, it could actually be $0.00. Seriously, no hourly wage. In addition, it is assumed that servers and bartenders make at least 20% gratuity 100% of the time. This assumption is reflected in the way servers and bartenders are taxed. They pay taxes on the assumed 20% whether it is received or not. And since restaurants report everything to the IRS, they have the ability to calculate what they think each server or bartender earns each shift.

What does this mean? It means that every time that a server or bartender doesn't receive 20%, they've, in essence, paid taxes on money that was not received. It doesn't seem like a big deal until you look at it another way. Imagine if your employer could randomly pay you less than your normal wage. You'd find this to be completely unfair and would not appreciate it one bit. The good news for you is that there are laws in place to protect your rights as an employee. For those in the service industry, there are no laws to protect them against those who do not tip 20%. This is compounded by the fact that once state taxes, federal taxes, F.I.C.A. and other deductions are taken from a server or bartender's paycheck, there is, quite literally, nothing left. You may notice that you've never heard a server talk about pay day. Most couldn't even tell you what the designated pay day is at their place of employment. The reason is because their paychecks are usually void. So, tipping 20% is very important.

Now, suppose your employer decides to give you a bonus. You are excited and have no complaints. You probably believe that you deserved it and you may even be correct in your assessment. Tipping more than 20% is the way that you could reward a server or bartender for exemplary service. It's not against the rules and it is much appreciated.

Armed with this knowledge, it should be obvious why people in the service industry would complain about not getting at least 20%. You can also see why they would be offended if a famous person went on the national airwaves and said that it was okay to tip less because we're in a recession. The IRS is well aware of how the economy fluctuates from moment to moment, but they do not offer relief when times are bad. They assume that no matter what the economic trend may be, we're still receiving the standard gratuity.

Don't take this the wrong way. We do understand that things are tight. We are all struggling. Instead of going out and spending what you normally spend on a meal, spend less. That way you can still take care of the server or bartender who took care of you. We all work hard and we all want everyone to have a great time, but we also want to be able to earn a living -- just like everyone else.

When did 20% become the standard minimum gratuity?

Although the date is hard to pin down, it is thought that some time during the mid to late 1980's the minimum gratuity was elevated from 15% to 20%.

So, there you have it -- tips ungratuitized. I can't overemphasize how intense the discussions concerning this rumored statement were. I also can't tell you how passionate people in the service industry are about their jobs. We all love what we do and we all love being able to make your dining and drinking experiences memorable. I hope that this post helps explain why you may have heard some grumbling from a table full of service employees hanging out after a long day at work. I've been there myself. I'm usually fine after a Guinness Stout and a few moments of reflection. Like everyone else, we all need to vent. The discussions will probably continue for weeks to come. I like it. Comments are always welcome. Next week, we here at Hey Bartender will get back to what we do best. Until next time...prosit!!!