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Jun 14, 2012 10:59 AM

Service Charge Question

I recently dined at a upscale restaurant. We were in a private room. The staff was wonderful. The room was beautiful. The food was excellent. The issue came when we got our bill. There was a 20% gratuity on the bill. I asked the manager if the staff gets the whole amount. The manager informed me that the serving staff gets the whole 20%. I did not leave extra. About a week later, a friend told me she stop going to the restaurant because she found out that once she left her private event they changed the 20% gratuity to a service charge and the company takes 4% from the staff. I was lied to. Why would the manager lie to me? Is this legal? I was informed the serving staff kept all of the tip. They did all the work why would the owners take their money and why the deception? Can anyone help?

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  1. Why don't you call up the manager and ask him directly about it. There's no one on this board (or any other internet board) that can really answer your specific questions.

    1. "About a week later, a friend told me she stop going to the restaurant because she found out that once she left her private event they changed the 20% gratuity to a service charge and the company takes 4% from the staff."

      How does your friend know this for sure? Did the manager of the restaurant tell her this? Or did a friend, tell a friend, tell a friend... ? If I were you I would do a little more investigative work to get to the absolute truth before writing off a restaurant you described with the words, "The staff was wonderful. The room was beautiful. The food was excellent." That's a lot to disparage and throw away because of something a friend told you.

      1. In many states, managers are not allowed to take gratuities from staff....Many houses will label the gratuity as a labor charge and guarantee the staff a certain wage for working a shift in what is classified as a catered event.

        As indicated by the others, I would not get too worked up based on something a friend told you. I'm sure if the staff felt like they were mistreated...then there would be an uproar or they would leave.

        1. I did. The manager told me that it is true that they are instructed by the owners to tell the guests that the servers get the whole 20% so they do not feel obligated to give more. But I started digging and I found that they could be a federal violation. If it is can I get the money back for the servers. It just doesn't seem right. I know that no one on this board can not answer my question. But what if you have been lied to about where you money is going? Shouldn't the guest have the right to know how their money is distributed?

          4 Replies
          1. re: dedeburke

            There is a very important distinction that you aren't considering:
            Were you charged a service charge, or was it an automatic gratuity?
            A Gratuity can go to no one except those who perform the steps of service
            A Service Charge is a mandatory charge set in place by contract (which can be as simple as it listed on the menu) Because it is technically not a "tip" anymore, the restaurant is free to distribute it as they see fit, to the kitchen, management, private dining coordinator, etc.

            1. re: plaidbowtie

              The check that I was given and still have says 20% gratuity. When I spoke to the manager about it being divided after I left and it becoming a service charge, he sent me a copy of my check after I left. It was changed to 14% banquet service charge and 6% sales commission. I have two different checks in front of me. I was billed the same. But the 14/6 split was not presented to me. It was changed once I left. I demanded to see the split check. The manager told me it is their policy to tell guest the servers receive the whole 20% so the guests will not feel obligated to give the servers more. I use to be a server. I wanted to make sure the servers were taken care of. I was lied to! Are they in turn stealing from their servers?

              1. re: dedeburke

                How many people were in your party in the private room? If it was above six, then many places charge an automatic gratuity....Whether it was changed to a service charge or not, you may not like a sense, it's just semantics. Based on what you are providing as details, it could be suggested that the servers actually do not receive a cent of the fee.....if so, as I indicated above, the servers work for a guaranteed wage and accept those therms. You can make a big stink out of it if you so choose, but how far are you really willing to go.

                This is common practice in Country Clubs. The servers work for guaranteed wages and do not receive tips......At the clubs I worked, however, the chits always indicated the byline as *service and labor*....The same is also done at the CC I belong to as well.

                1. re: dedeburke

                  I do not believe it is LEGAL to present a bill to a customer, have that paid, then re-write it afterward to change how things are charged. Probable state laws and possible federal ones affect this. If you paid by Credit card, you can dispute the amount until it is settled to your satisfaction.

                  What they have in truth done here, is run a double set of "books" or as it is said "cooked the books"? Why do they care if the servers get extra, no skin off their nose, right? But they are scamming the servers by changing it to a service fee after it has been paid. Are they accounting for the taxes correctly? I mean the business would have additional tax burden for the income the skimmed away from the servers. SO which check do they show the State department of taxation, the gratuity one (servers paid the tax on that income) or the changed one, showing a service charge?
                  They are cheating more than the servers. And running double books.

            2. As the first post responding to the OP, I agree we can only speculate what may or may not have happened.

              As for the question "is this legal" then surely that would depend on where the OP is in the world and what consumer or employment legislation applies. Certainly where I am, a service charge is not necessarily only distributed to the servers but may be distributed to all employees (something that I think is a good thing - we often forget the contribution other employees have made to our meal experience).

              1 Reply
              1. re: Harters

                True, that all staff/hourly employees contribute and many places have a tip out system, where bus boys and kitchen staff are given a percentage by the servers. The issue here is that Managers and owners are not part of that staff. By switching it to "sales commission" that part is removed from what is going toward the employees. In the US, managers and owners are not allowed to "tax" the servers for a part of the tip. As well, it does bring tax issues (as in the business avoiding paying taxes on sales commission by showing it only on the tax records as tips).