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October 21, 2011 / 74

When Does A Waiter Become the Customer’s Employee?

So I’m standing at my kitchen counter this morning buttering my toast – and for some reason I started to think about the State of California and the expressed desire from a few waiters and waitresses for a MANDATORY 25% tip.

Being a former tax professional, it popped into my head that if the law REQUIRES the customer to pay the wait staff for services rendered, then such a law would change the relationship between the customer and the wait staff.

At present the wait staff is employed by the restaurant, and is PAID by the restaurant. If a customer wishes to reward the wait staff for services rendered, they can. But if the wait staff is surly, (as so many of them are these days), or if the service is terrible – the customer only receiving – say – half of what they ordered, the customer has the option of NOT giving the wait staff a “tip” – tips being defined as a voluntary payment to reward the server for competent/good service. (TIP = “To Insure Promptness”) ie there is no fixed legal relationship between the wait staff and the customer.

BUT – if a payment from the customer in a certain amount is REQUIRED by law – then the basic relationship between the server and the customer is changed from a voluntary association, to an employer-employee relationship since the wait staff would then be working directly FOR the customer! If the customer is now required by law to pay the server for the service, regardless of the quality of said service, then a “tip” is no longer a tip – it becomes wages!

So if I walk into a restaurant and look at the menu – and it says there is a MANDATORY tip of a certain percentage, required by law, then I will henceforth demand that the waiter/waitress who is serving/being employed by me fill out a State and Federal W-4 form, and an Immigration form I-9, complete with the legally required provision of proper ID – as REQUIRED BY LAW.

As long as the services are provided by the establishment as part of the facility’s business then the servers are the employees of the business. But as soon as the customer is required to pay the employee for service, that employee becomes the customer’s employee.

The alternative to this of course is for the restaurant to start paying the servers a decent living wage and not force them to rely on tips for their livelihood. Or go to self-service. Anyone up for a buffet?

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One Comment

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  1. Cyndi Wiley / Oct 22 2011 15:15

    Another alternative is for servers to earn their tips rather than demand them. My opinion regarding tips is that if you provide excellent service to the client, then typically the client will want to compensate you for your hard work. My husband and I have always tipped our wait staff well for good service. The complaints are probably coming from the staff who do not provide good service therefore they often do not receive very good tips.

    I would avoid places that forced a 25% tip. To me a tip is voluntary. If I’m forced to leave that much of a tip regardless of the type of service I get, then IMO,it takes away from part of my dining experience.

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