Comment: Well, Minimum Wage is crazy, but yes, they can. What should

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Well, Minimum Wage is crazy, but yes, they can. What should

really get everyone's goat is that most restaurants really can't legally do it, but get away with it anyway.

You see, the "tip-credit" is a benefit for small mom and pop restaurants that basically are operating a cash flow sensitive business. At least when it was first passed into law, this was the case. Now with credit cards being ubiquitous, it really isn't needed anymore.

You see, in the law, it specifies that a restaurant paying a CASH wage, can pay $2.13 an hour (originally, this was 50% of min.) and take a credit against the min wage requirement for the rest based on the server's ACTUALLY RECEIVED TIPS.

In no case is it legal for a restaurant to take the full credit (which is now as high as $5.12/hour) if the server didn't actually receive that amount. (based on the company's payroll period)

But there are two big problems here (and a third peripheral one):

#1 - most restaurants now, don't pay CASH wages. They pay by check. Thus there is no real need for the tip-credit provision to ease the burden for cash flow purposes. On top of this, most of the biggest lobbyists for this provision remain the corporate chains, who NEVER pay cash wages. AND they usually BORROW their payroll ANYWAY even if they don't need to, and thus would feel no impact on their cashflow if having to pay full minimum wage.

#2 - Nearly ALL restaurants as a matter of POLICY (if not unwritten, but just as brutally enforced) do not EVER allow a server to "claim" they made less than the tip-credit. Even if they didn't make that amount. Thus, the company never has to make up the difference. And they justify this because they claim ALL tipped employees categorically underreport their tips to avoid taxation. (not that it doesn't happen and is widespread, but that doesn't justify blatant violation of law on the part of the company)

and the #3 - Forced Tip Share

You see, in order to justify paying OTHER employees $2.13/hour, like busboys, hosts (NOT M'aitre 'Ds), Bartenders, and in some cases, even cooks, dishwashers, and yes MANAGERS, some restaurants force, yes FORCE, servers to give a set percentage of their sales (aka - a "tax") as "tip share." This is to be paid even if the server made ZERO in tips all night. Yes, you can go to work, and leave owing money though they will NEVER believe you. They do this because the law "does not prohibit the sharing of tips amongst tipped employees."

The big problem here is that many of these positions are not otherwise "tipped employees." They are only "tipped" by the server through forced tip share. This even when to the Supreme Court. And get this, SCOTUS agreed with the circular logic that because say a cook was given tip-share, that made them a "tipped employee" and thus the law can't touch that arrangement. Mind you, they aren't "sharing" any tips into the pool, only the servers are. But that didn't sway the Justices. The fact that in some isolated cases, a cook COULD receive a direct tip from a patron, means it was somehow legal to FORCE servers to give their tips to cooks. (or other employees)

Now, what happens when tip share reduces claimed tips to less than the tip credit?

The law says the company has to make up the rest. Do they? No. Because they NEVER believe or allow the server to claim less net tips than meet the tip credit.

In some states, tip-share is 2-3%. In others, CA being one example, it is as high as 8%. That is, not of your tips, but of your SALES, and remember, even if you didn't get tipped that much to begin with.

NOW, let's add one more monkey wrench:

MANY Restaurants, especially the corporate chains AND any mom and pop that has been terrorized, has signed an "Agreement" with the IRS thugs, that they will not be further investigated or terrorized (if they sign and enforce the agreement) that either A) all tipped employees will have their tips controlled by the restaurant and be reported 100%, or B) that all tipped employees will report as "income" at MINIMUM 8% of their sales, whether actually earned or not. Failure to sign the agreement "may" result in audits of the business and/or ALL employees. (tipped or not) These are known as "TRACT" agreements. (It's an acronym, I don't recall the parts)

Most restaurants opt for the 8% rule because the other one is too hard to deal with.

So imagine, you work in a L.A. restaurant. You get paid $2.13 an hour. You wait on a table and their bill is $100. They run you like a dog, are rude as hell, and then leave you a cute little note like this pastor bitch above. You have to PAY $8 in "tip share" out of tips you didn't make. (they left you ZILCH on that $100). AND you have to CLAIM to the IRS that $8 as YOUR "INCOME" and pay taxes on it out of your $2.13/hour check !!!!!!!!

I'm honestly amazed, someone's clock hasn't been cleaned over this scam yet.

The only thing keeping the game going is MOST people, or should I say ENOUGH people, tip enough to not only compensate, but most likely provide enough pay after all that crap to still make the job worth it, at least for a few years.

And mind you, if you move up into higher class restaurants, tipping is more universal, though so are the attitudes of entitlement and snobbishness, and of course, you can make a decent living essentially working a part time job. Some good servers make anywhere from $40k-$70k a year or more.