Mandatory 16% tip at new Earls 67 locations (Stephen Ave)

[gasman]

Originally Posted by Simanium

Because if Earls increases wages that means that Earls has to pay an increased amount for matching CPP and EI contributions. This adds up to a lot for an entire restaurant. Earls doesn't have to contribute to payroll deductions for tips. Also, my understanding is that since it is a Service Charge, the 16% tip will not go into the revenue of the business and accordingly not taxed to the corporation, whereas an increase in menu prices would increase general revenue and would be taxed. Menu prices would have to increase by a percentage a fair bit more than 16%, to account for taxes and payroll deductions, to still have the same net effect for the employees.

The 16% service charge would certainly hit the restaurant books. Controlled tips form part of the employee's total remuneration and are subject to CPP contributions and EI premiums being deducted at source, provided that this person is employed in pensionable and/or insurable employment.

This should result in a net no impact to income tax burden, provided Earls pays out the entire 16% as wages, as both the payroll and deductions are tax deductable to the corporation.

They add the service charge because as a previous poster mentioned $17 looks better on a menu than $19.72, and you are more likely to not do the math in your head.


http://www.cra-arc.gc.ca/tx/hm/xplnd/tps-eng.html

*edit - Bean and I have similar google-fu apparently.

[bc-chris]

going out with another couple later this week and i know they like to go to earls. i mentioned this new policy to my buddy (not sure if it's being implemented in kelowna) and his response was that he (like me) has no issue with tipping and would even likely tip more, but the fact that they are imposing a set amount rubbed him the wrong way. we're now going to a pub for dinner and then we'll head down to prospera place where we'll be taking in the billy idol concert! should be a fun evening!!

[CorsiHockeyLeague]

Originally Posted by Regorium

I think a huge concern is that no good waitress will want to work there, which leads to poor service, and people blaming the lack of tipping for this. A waitress at this type of establishment (basically a model) will make WAY more money at a traditional place like Earls, Cactus or Shark Club - places where 25-30% tips with loads of alcohol are the norm. You're left with the ones a tier below, meaning you're gonna get lower quality service.

I strongly doubt that there is any bar or similar establishment in the city of the sort you've described where the average tip is much higher than 16%. Almost no one tips 25-30%, and the people who do are easily offset by those who don't tip or tip 10%.

Anyway I was at Earls 67 yesterday. Had a bunch of drinks, some appys, a salad. It was fine. The salad was tiny. Seems to be more about the share plates. Didn't think the value was particularly great. As for the service, it was friendly and generally good, though drinks were slow and there was one minor error with an appetizer that they went over and above to fix (I was fine with it). Standard sort of stumbling out of the gate for a place the first week after opening, nothing to dissuade you from going there.

Also, I think of all the similar venues around there (and there are a bunch) it might have the nicest atmosphere. Very bright, open.

[nfotiu]

Originally Posted by CorsiHockeyLeague

I strongly doubt that there is any bar or similar establishment in the city of the sort you've described where the average tip is much higher than 16%. Almost no one tips 25-30%, and the people who do are easily offset by those who don't tip or tip 10%.

Anyway I was at Earls 67 yesterday. Had a bunch of drinks, some appys, a salad. It was fine. The salad was tiny. Seems to be more about the share plates. Didn't think the value was particularly great. As for the service, it was friendly and generally good, though drinks were slow and there was one minor error with an appetizer that they went over and above to fix (I was fine with it). Standard sort of stumbling out of the gate for a place the first week after opening, nothing to dissuade you from going there.

Also, I think of all the similar venues around there (and there are a bunch) it might have the nicest atmosphere. Very bright, open.

From the wording of the article, it sounds like the service charge will go to general revenue and the servers will just get a fixed wage that I assume would be higher than other restaurants.

This seems like a way to get around the minimum wage laws that are increasing and removing the lower minimum wage for liquor servers. Servers getting $15/hour in wages plus probably $10-$30/hour or more in not really taxable tips seems a little out of whack, and this seems like a decent enough system to deal with it and I would guess it becomes very common.

[Resolute 14]

Originally Posted by Lubicon

Quite correct, it was not misleading at all. There was absolutely no question to how much the airline was charging you for the flight. There was also no question as to how much the additional charges and taxes were and to whom they were being paid.

Umm. Literally every airline I have flown on gives you that detailed breakdown during the purchase process. There is no question now as to what those taxes and fees are.

But when I am searching flights or comparing, I want the total cost. Not the pretend cost before taxes and fees.

[Lubicon]

Originally Posted by ken0042

Every business has multiple expenses to be able run. However you don't go into Canadian Tire and see a hammer priced at $5, and then have it with several line items such as delivery, stocking, building maintenance, etc bringing the final price to $20. You just see the hammer priced at $20.

Same as the airlines. Yes, they need to pay the airport a fee to land. They need to buy fuel for the plane to function. All I want to know is how much it will cost the airline to get me from point A to B.

Actually you see the hammer priced at $20 and then the checkout price of $21 at the till which includes a line item showing both the price of the hammer and the tax as well , $20 and $1 respectively. Which is the way it should be.

[ken0042]

Right- one standardized sales tax across all industries. And that tax is always the same percentage.

Also, the sales tax is going to the government. It isn't a cost of providing the gods or service like an airport fee, fuel surcharge, etc.

If in the past plane tickets only had the price plus GST, nobody would be bringing it up.

[Hockey Fan #751]

Originally Posted by bc-chris

going out with another couple later this week and i know they like to go to earls. i mentioned this new policy to my buddy (not sure if it's being implemented in kelowna) and his response was that he (like me) has no issue with tipping and would even likely tip more, but the fact that they are imposing a set amount rubbed him the wrong way. we're now going to a pub for dinner and then we'll head down to prospera place where we'll be taking in the billy idol concert! should be a fun evening!!

It's only being implemented at the one Earls 67 restaurant in Calgary and that is all.

Besides that, if you're spending a dinner night out in Kelowna you should go to RauDZ! That place is awesome.

[NomNomNom]

Not sure if this has been mentioned, but good luck holding onto good lounge girls who will soon realize how much money can be made through tips. Girls can leave a friday/saturday shift with $500 in their pockets; which is something that won't happen at E.67

[PepsiFree]

Originally Posted by Lubicon

Actually you see the hammer priced at $20 and then the checkout price of $21 at the till which includes a line item showing both the price of the hammer and the tax as well , $20 and $1 respectively. Which is the way it should be.

Which is exactly how it is now when you purchase a flight...

[btimbit]

Originally Posted by nfotiu

From the wording of the article, it sounds like the service charge will go to general revenue and the servers will just get a fixed wage that I assume would be higher than other restaurants.

I think it'll still work out to about the same as other restaurants. What they get in tips will still be based on the amount of sales generated by that specific servers customers (- what gets split up between non-servers) So more tables and customers will still = more money. So it's just like it was before, it'll just be easier to calculate. I'm sure some thought went into creating that 16% number too, wouldn't be surprised if it's still close to what they were getting before

[Lubicon]

Originally Posted by PepsiFree

Which is exactly how it is now when you purchase a flight...

No it's not. You price a flight now and it's all in pricing. That is what I do not like. You buy a hammer and the price on the shelf is what the store charges. Taxes etc. show up later at check out.

[PepsiFree]

Originally Posted by Lubicon

No it's not. You price a flight now and it's all in pricing. That is what I do not like. You buy a hammer and the price on the shelf is what the store charges. Taxes etc. show up later at check out.

You're splitting hairs, it's irrelevant. When you checkout while buying a flight, it tells you exact what the airline is charging along with all the taxes and fees, separated by line.

What don't you like about it? That you have some idea of what a flight is going to cost you before you get to the checkout? Heavens, no.

EDIT: Plus, on most sites you can click a button and see the breakdown before you get to the checkout. So yes, the same thing. You just have to click a button.

[Kjesse]

Originally Posted by Regorium

I think a huge concern is that no good waitress will want to work there, which leads to poor service, and people blaming the lack of tipping for this. A waitress at this type of establishment (basically a model) will make WAY more money at a traditional place like Earls, Cactus or Shark Club - places where 25-30% tips with loads of alcohol are the norm. You're left with the ones a tier below, meaning you're gonna get lower quality service.

This is a fascinating post. It equates attractiveness with quality of service.

[Regorium]

Originally Posted by Delgar

This is a fascinating post. It equates attractiveness with quality of service.

Attractiveness has a higher correlation with tips than quality of service that's for sure. However, that's really not what I meant, even though I guess it may read that way.

I'm saying that at these places, every server is attractive. The best ones in actual quality of service will go to the places where you can earn the most. You're left with the attractive, but less experienced or lower quality of service servers that work at E67. This leads to people mis-attributing the "attractive bimbo awful server" stereotype to the fact that it's because there's no tipping, and not to the fact that the quality of the server is just lower because they are compensated far less than other places.

This entire thread is an exercise in seeing the power of human psychology. Bc-chris' friends tipped far more than 16%, and my bet is that they rarely exercised their option to not tip. Yet they still couldn't get over their psychological block at being "forced" to pay for things.

[temple5]

I actually dont mind this. I now know not to visit that location.

Thank you,

[verda13]

Originally Posted by CorsiHockeyLeague

Anyway I was at Earls 67 yesterday...

I am curious, was there a tip option prompt on the machine? (assuming you paid with credit/debit) Also, were you informed about the new auto 16% tip?

I would assume a lot of people wouldn't know about the auto gratuity and tip additionally.

[burnin_vernon]

If the wait staff simply sees an across the board pay increase, an interesting dynamic would be the handling of man-hours. All the restaurants I was involved with would cut staff ASAP every day. Sometimes the decision would burn them when an unexpected rush came in later, resulting in poor service. I would think they would be cutting even more now, which also wouldn't be attractive to good servers.

[IgiTang]

Reading through this thread, it doesn't appear many of you have actually worked in the hospitality industry before.

For clarity, 90% of kitchens get tipped out by wait staff.

Servers, after all is said and done, only walk with about 60% of their tips. If their a team player and tipout honestly.

Servers, the good ones anyway. The servers you love and don't keep you wondering if something is coming but also don't hover, usually make a hell of a lot more than %16.

These servers are usually depending on tips more than their wage. Taxes and not paying them on unclaimed tips is a huge part of the appeal to serving.

Take that all away, your service is going down exponentially. And as a consumer, you also suffer.

There's a reason this model doesn't exist in franchise restaurants. Low end or (I don't want to say high end when referring to Earl's..)

Mandatory tips are usually at truly high end places and the reason for that is ALL staff making very very good wages.

This is a really stupid way to launch a restaurant re-opening.

[Dan02]

Originally Posted by verda13

I am curious, was there a tip option prompt on the machine? (assuming you paid with credit/debit) Also, were you informed about the new auto 16% tip?

yes they informed us when we sat down that there was no tipping and 16% was added.

There was no prompt for a tip on the credit/debit machine.

However, if you're a little drunk like me and paying cash they don't exactly stop you when you see the bill and automatically in your head add the tip then leave cash. Thinking back on it I think it was probably a 45% tip i left. whoops.