Confirming Whether 18% Service Charge = Tip (Miami, Miami Beach: sales, 2014, condo)

[elchevere]

I have always been told the 18% service charge at Miami/MB restaurants was a tip, though I usually add a few more bucks since I typically tip at 20%--as long as the service does not suck.

Within the past 2 weeks, when I asked, I was told by 2 separate servers at different restaurants that the 18% does not go to them....were they trying to scam me or is there any merit to their claims?...I was always under the impression that waiters/waitresses gave a portion of their tips to the busboys, etc. anyways so this sounds like a scam to me and waiters/waitresses won't be getting a dime more than 18% at these particular establishments in the future, if true...yes/no?

[MyITGuy]

Taken from Tip versus service charge | Insights

Beginning January 1, 2014, the IRS is requiring employers to classify automatic gratuities as service charges.

and

If the automatic gratuity is considered to be a service charge rather than a tip, under federal law, service charges belong to the restaurant and become a part of the restaurant’s gross receipts and may be retained or distributed as management sees fit.

If this is the case (servers are not seeing the money) then I would likely not be returning to these establishments.

[ruski]

LOL, greedy restaurants

What is the price of the food they serve? Isn't that already a "service charge" (minus the cost of ingredients)?

[elchevere]

It has been around for awhile.....trying to determine if I stiffed people in past or if waiters now claiming they don't see any of the money is a scam for a bigger tip.

[cfbs2691]

Originally Posted by elchevere

It has been around for awhile.....trying to determine if I stiffed people in past or if waiters now claiming they don't see any of the money is a scam for a bigger tip.

Even if it's a party smaller than 8 people they charge that?
Have you asked a manager where the 18% goes?

[elchevere]

yes...even 1 person....a number of restaurants (not all) in Miami Beach and Miami have been doing this for years--and I was told it was because people from some countries or continents do not tip at all....so I am trying to determine if there has been a change in policy or if the wait staff is getting greedy.

Originally Posted by cfbs2691

Even if it's a party smaller than 8 people they charge that?
Have you asked a manager where the 18% goes?

[cfbs2691]

Originally Posted by elchevere

yes...even 1 person....a number of restaurants (not all) in Miami Beach and Miami have been doing this for years--and I was told it was because people from some countries or continents do not tip at all....so I am trying to determine if there has been a change in policy or if the wait staff is getting greedy.

interesting.. keep us posted?

[MyITGuy]

Originally Posted by elchevere

yes...even 1 person....a number of restaurants (not all) in Miami Beach and Miami have been doing this for years--and I was told it was because people from some countries or continents do not tip at all....so I am trying to determine if there has been a change in policy or if the wait staff is getting greedy.

You can always ask management.

Personally - I rarely see service charges appear on my checks, unless I go out with a large party where its usually a standard practice. If I do see this charge outside of this circumstance, then I would assume its given to the service staff, but then would take note to avoid this establishment in the future as I don't appreciate the practice (Additionally IMO it generally leads to substandard service since theres no motivation to do above/beyond)

[MyITGuy]

This was one of those subjects that caught my interest, so did a bit of poking around...

Something to look for next time your out - Does the menu (or other means) inform you that there is a service charge, and who it goes to (Before you get the bill)? If not then the service charge is not enforceable.

https://www.flsenate.gov/Laws/Statutes/2016/509.214

Every public food service establishment which includes an automatic gratuity or service charge in the price of the meal shall include on the food menu and on the face of the bill provided to the customer notice that an automatic gratuity is included.

and Miami-Dade County ordinance:

Sec. 8A-110.1. - Tipping policies.
(1)
Definitions.
(a)
Business shall mean any food service establishment in which tipping ordinarily occurs or which has a tipping policy.
(b)
Permit shall mean to allow, permit, accept, request or require.
(c)
Status shall mean the race, color, religion, ancestry, national origin, age, sex, sexual orientation, pregnancy, disability, marital status or familial status of an individual or any person associated with that individual.
(d)
Tip shall mean any gratuity or service charge associated with a business's provision of any goods or services.
(e)
Tipping shall mean the custom, policy or practice of permitting tips.
(2)
Nondiscrimination in Tipping. No business shall permit any tip based upon an individual's status.
(3)
Posting of Tipping Policies. Each business shall provide notice of (A) whether the business includes an automatic tip in its bill, and if so, the amount or method of calculation of the automatic tip; and (B) the following language: "IT IS ILLEGAL IN MIAMI-DADE COUNTY FOR ANY BUSINESS TO CONDONE IN ANY MANNER TIPPING BASED ON THE RACE, COLOR, RELIGION, ANCESTRY, NATIONAL ORIGIN, AGE, SEX, SEXUAL ORIENTATION, PREGNANCY, DISABILITY, MARITAL STATUS OR FAMILIAL STATUS OF THE PERSON OR PERSONS GIVING OR RECEIVING THE TIP. If you have a complaint, you may call the Miami-Dade County Consumer Services Department Hotline at (305) 375-3677." This notice shall be posted conspicuously, either on a sign or in a statement on the business's menu or price listing in the same form and manner as the other items on the menu or price listing, and written in a legible manner in English, Spanish and Creole.
(4)
Provisions Cumulative. The provisions of this section shall be cumulative and in addition to and not in derogation of any and all other provisions or laws prohibiting discrimination or regarding notification of tipping polices.
(5)
Applicability. The provisions of this section shall apply throughout the incorporated and unincorporated area of Miami-Dade County, Florida.
(Ord. No. 99-163, § 1, 12-7-99)

Additionally - If the establishment is charging a service charge, not distributing these funds to employees and is not charging sales tax on this amount then they would likely be in violation of statute 212
https://www.flsenate.gov/Laws/Statutes/2016?chapter=212 which is clarified by Florida Administrative Code 12A-1.0115 https://www.flrules.org/gateway/rule...?id=12A-1.0115

(7) Gratuities.
(a) Any charge made by a dealer to a customer for gratuities, tips, or similar charges [b]is a part of the taxable sales price of the food or drinks except when[b]:
1. The charge is separately stated as a gratuity, tip, or other charge on the customer’s receipt or other tangible evidence of sale; and,
2. The dealer receives no monetary benefit from the gratuity. Money withheld by the dealer for purposes of payment of the employee’s share of social security or federal income tax or any fee imposed by a credit card company on the amount of the gratuity, or money withheld pursuant to judicial or administrative orders, is not a monetary benefit for purposes of this rule.

[WisdomJ]

Originally Posted by elchevere

yes...even 1 person....a number of restaurants (not all) in Miami Beach and Miami have been doing this for years--and I was told it was because people from some countries or continents do not tip at all....so I am trying to determine if there has been a change in policy or if the wait staff is getting greedy.

This is what I was always told. Every place I have been to in Miami and Miami Beach has the service charge. I assumed it was an automatic tip and I would just sign and go. In the end, it was a savings for me since I typically tip 20% or more. But if this doesn't go to the servers at all, that could be a problem. I would hate to have them remove it at every resto just so I can ensure the tip will go where it needs to!