New Law Changes Automatic Gratuities

New Law Changes Automatic Gratuities

Gratuities added to large party checks now considered a service charge
AMARILLO -- Changes to the tax law may change the total cost of your next dinner out.

        The Internal Revenue Service (IRS) has reclassified the so-called automatic gratuity into actual wages.

        Because of this change in law, many restuarants and bars in Amarillo are doing away with the automatic tips they charge for large groups or parties.
        Many of us have been in one of those large groups.  Ten or more of you go out to eat and you're charged an automatic 15% to 18% gratuity on top of your bill.

        The automatic gratuity is used to protect the server who largely relies on tips to make a living.

        At "Hummer's Sports Cafe", they are doing away with that charge, even though it still says on their menu that a 15% gratuity is added to parties of six or more.

        The owner says the tax law change is more of a bookkeeping nightmare than anything.

        Ted sanders says the new law would force them to include the automatic gratuity as part of the wait staff's hourly wages.  "Yeah, and then you're supposed to have the number of hours the party was here. So, if they tip $30 and they were there four hours, that's $7.50/hour.  I don't know, it's more than we can do, it's more than we want to do."  Sanders said.

        Sanders says big chains may continue the process of charging automatic gratuities because they have larger staffs to handle the bookkeeping changes.

        Speaking with the wait staff and customers, they were split on whether it was a good idea.

        The waitresses said they liked the automatic tips for large parties because too many times they'll get stiffed on the tips without it.

        Customers tell us they would rather tip at their own rate and would probably tip more without the automatic charge.

        The new tax law went into effect January 1.

Page: [[$index + 1]]
comments powered by Disqus