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

[sun]

Originally Posted by 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

Just one point of data, but my wife never made $500 a night working at this location. Maybe once? Servers don't make as much as people think and their best night suddenly becomes the average night in all their anecdotes.

Tips even out to around 16% anyways and this way it's guaranteed. I don't think they'll have a problem staffing the place.

[Locke]

Originally Posted by sun

Just one point of data, but my wife never made $500 a night working at this location. Maybe once? Servers don't make as much as people think and their best night suddenly becomes the average night in all their anecdotes.

Tips even out to around 16% anyways and this way it's guaranteed. I don't think they'll have a problem staffing the place.

This.

Honestly, if a server tells you they make $200 a night, even taking that at face value, I guarantee you they maybe make that 1-2 days a week if they're lucky. There will be other nights where they make a tiny fraction of that.

[FireGilbert]

Nothing wrong with a mandatory tip like they have in most of Europe. Just as long as it is clearly advertised and shown on the bill so you don't end up tipping twice.

[Mr.Coffee]

Originally Posted by 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.

This is the part that bugs me. For people saying servers don't make as much as they say they do, well, they also don't properly pay taxes, so, yeah they kind of do.

I think the CRA needs to crack down on servers in a big way, because it's complete BS that because you're a server you can avoid taxes you owe.

[Locke]

Originally Posted by Mr.Coffee

This is the part that bugs me. For people saying servers don't make as much as they say they do, well, they also don't properly pay taxes, so, yeah they kind of do.

I think the CRA needs to crack down on servers in a big way, because it's complete BS that because you're a server you can avoid taxes you owe.

They've tried, and they have amazing powers when it comes to servers, but when your whole political platform revolves around 'helping the little guy' its not cool to crack down on servers.

[GGG]

Originally Posted by 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.

Getting tipped out by the kitchen and getting a reasonable share of tips are to different things. Tip out to the kitchen gives the kitchen a couple bucks an hour vs the $20 plus an hour the server is making.

Average tip at Restaurants (Not pubs and Lounges) is about 16-18% of pre tax total. I would agree that as you move into Pub Lounge, Bar waitresses tips increase significantly.

I disagree with the assertion that better servers will leave to make more money. Since service has little correlation with tipping it likely is unchanged. Average tips between servers do not significantly differ on average. So if Earls has looked at the data and 16% is what the average was on all bills then waitresses wouldn't see a change. Although the tax implications is what kills you but in Restaurants a good portion of sale and tip is electronic and traceable anyways.

The big benefit is that you don't get the table stiffing you. The amount of bitterness at tables who stiff you is far greater than the feeling of getting a great tip to. And you can tell from the moment they come in if they are going to springs1 you. Not having to worry about at least making tip out from crap tables is a huge quality of life improvement for a job. So for me even a small loss in income would be worth the reduced stress of that environment.

The solution to the tax problem though is for the CRA to crack down on it.

That said you are probably right that it not the best strategy for a restaurant to take but I applaud them for trying to break a horrible system.

[Bean]

Originally Posted by Locke

They've tried, and they have amazing powers when it comes to servers,

I'm curious about this, can you elaborate please?

[cSpooge]

Originally Posted by Bean

I'm curious about this, can you elaborate please?

The audit restaurants and casinos all the time and just hammer the employees who don't report their tips. A buddy of mine was working at the elbow river casino when they got audited and the CRA added 10-12K of income to all the dealers to cover tips.

[mrkajz44]

I haven't dabbled in personal tax in a few years, so I may be a bit off base. My recollection is the process looks like this:

1) CRA comes in to audit business
2) CRA learns about how business works, including compensation for employees
3) CRA checks employees tax returns and notices you didn't report any tip income
4) CRA estimates the amount you should have reported based on their knowledge of the business from the audit and re-assesses the employee
5) Onus is now on taxpayer to object to the re-assessment if they think it is wrong. Many don't because they don't have any records of their tips, and if they do they could be in even bigger trouble because they were tracking the amount and still didn't report it as income

Put me in the camp that I feel no sympathy for those that get hammered with a re-assessment. They know exactly what they are doing by skipping out on tax for income they earned.

[#-3]

Originally Posted by Hockey Fan #751

I agree, at that level Canadian beef wins. But in Canada there's really no point in going for a really high-end steak because of the consistency. In the U.S. it's a lot more worth it to go to a high-end steakhouse because you're guaranteed it will be of outstanding quality.

In Canada, I've never found any sort of difference between mid-level and high-end steak to the point where I've stopped going out for steak in Canada. It's just not worth it.

I'll agree generally don't go out for Steak. It just bothers be buying a $45 slab of lightly seasoned meat cooked on a flat top, when I could have prepared something so much better on my BBQ for $20. When I go out I'll order something I wouldn't normally make or with ingredients I wouldn't normally have in the house.

But, after being raised on Alberta beef, I really couldn't say a good thing about USDA steak. I've possibly had it 2 -3 times in the states, and twice at Ruth Chris' in Calgary. It's hard to describe what is wrong with it. I'll agree mushy is probably a good word, but is tastes funny. I don't think it is as sweet.

[Locke]

Originally Posted by Bean

I'm curious about this, can you elaborate please?

Originally Posted by mrkajz44

I haven't dabbled in personal tax in a few years, so I may be a bit off base. My recollection is the process looks like this:

1) CRA comes in to audit business
2) CRA learns about how business works, including compensation for employees
3) CRA checks employees tax returns and notices you didn't report any tip income
4) CRA estimates the amount you should have reported based on their knowledge of the business from the audit and re-assesses the employee
5) Onus is now on taxpayer to object to the re-assessment if they think it is wrong. Many don't because they don't have any records of their tips, and if they do they could be in even bigger trouble because they were tracking the amount and still didn't report it as income

Put me in the camp that I feel no sympathy for those that get hammered with a re-assessment. They know exactly what they are doing by skipping out on tax for income they earned.

Basically this, the CRA will look at the traceable tips (Credit/Debit transactions) and then can estimate what they feel is reasonable for cash tips to come to a total.

When I say 'what they feel is reasonable' I'm using the term 'reasonable' fairly loosely, CRA can hammer additional non-tracked tips up to 400% of what they can track. And thats not including penalties or interest.

I once met a Bartender from Cowboys years ago who came to see me after he was re-assessed. Suffice it to say he owed a ton.

[harmony]

**** earl's.

whole tipping culture is a farce.

[Dan02]

Originally Posted by harmony

**** earl's.

whole tipping culture is a farce.

So shouldn't you be cheering on earls as they are attempting to get rid of tipping? Your post confuses me.

[harmony]

Originally Posted by Dan02

So shouldn't you be cheering on earls as they are attempting to get rid of tipping? Your post confuses me.

They're not getting rid of tipping. They're making it mandatory.

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[Dan02]

Originally Posted by harmony

They're not getting rid of tipping. They're making it mandatory.

Sigh, I'll be honest my brain doesn't comprehend people like you who see it like this.

Earls increases their prices 16%, $20 steak is now $23.2

Horray for the end of tipping!

Earls added 16% service charge, $20 steak is now $23.2

Booo I hate mandatory tipping!

Why does Earls do it this way? because people are idiots, the morons will look at their menu and see a $23.2 steak and say to their friends wow Earls is expensive, this same steak is only $20 at cactus club across the street, let's go there. Then they promptly add their tip and pay the exact same $23.2 if not more at cactus club and think nothing of it except wow is earls expensive.

By adding 16% Earls is trying to get rid of this tipping culture you claim to hate yet you rip on them for this mandatory tip. Your thought process just mades no sense to me.

[harmony]

Originally Posted by Dan02

Sigh, I'll be honest my brain doesn't comprehend people like you who see it like this.

Earls increases their prices 16%, $20 steak is now $23.2

Horray for the end of tipping!

Earls added 16% service charge, $20 steak is now $23.2

Booo I hate mandatory tipping!

Why does Earls do it this way? because people are idiots, the morons will look at their menu and see a $23.2 steak and say to their friends wow Earls is expensive, this same steak is only $20 at cactus club across the street, let's go there. Then they promptly add their tip and pay the exact same $23.2 if not more at cactus club and think nothing of it except wow is earls expensive.

By adding 16% Earls is trying to get rid of this tipping culture you claim to hate yet you rip on them for this mandatory tip. Your thought process just mades no sense to me.

Then they can raise the ####ing price and pay their employees accordingly.

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[burnin_vernon]

I'll contribute anecdotally to a few recent subtopics here. I quit serving 10 years ago and while most/all restuarants at the time had identical numbers, things may have changed since. I worked in a place about as popular as Earls (except non-franchise) in a smaller town where there wasn't as much of an upper class as a bigger city.

-I averaged $3000 per month (pre tax, tips + wage) working full time. On weekend nights, I took home about $150 and $200 would not be out of the question. On the low end, I would average maybe $40 on the opening shift/lunch.

-We tipped out 4% of all sales. If we made 20% tips, we went home with 16%. If we made 4% tips (almost impossible, but has happened to someone getting cut early) we took home 0.

-I did the job for 6 years and knew lots of people from different bars and restaurants, including my brother, who has been a bartender for over 20 years. Between us we have heard of exactly one person ever being audited at tax time. Only one person had ever told me they declared their tips, but it wasn't talked about much.

[GGG]

Originally Posted by harmony

Then they can raise the ####ing price and pay their employees accordingly.

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That's what a mandatory fee is doing. They raised their prices by 16%.

[btimbit]

Originally Posted by harmony

Then they can raise the ####ing price and pay their employees accordingly.

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Barring a major culture change, it doesn't work and anyone that's tried has failed. Been touched on plenty of times in this thread already

[Bean]

Originally Posted by Locke

Basically this, the CRA will look at the traceable tips (Credit/Debit transactions) and then can estimate what they feel is reasonable for cash tips to come to a total.

It is this mechanism that I just don't agree with. The restaurant only needs to report tips from mandatory service charges for their workers. At any place with more than 6 in their party, they'd record and have to report on behalf of the server. It is the majority of tables with fewer than 6 patrons where the server can pocket the money which gets me.

Cash tips aside, I find it frustrating that not all tips that run through the credit/debit machine aren't captured by the employer and reported on behalf of the server. (again with the 'controlled' and 'direct' nomenclature) Just take the grey area away where service industry workers can choose to report earnings.