Restaurants will no longer be able to charge service fees and will instead have to fold the charges into its menu prices. Starting July 1, restaurants in California will no longer be able to add service charges or other surcharges to your check.
I applaud this … let them raise their menu prices if they must.
I wonder if this new law will also prevent them from charging 18% extra for parties of 6 or more?
i do too. but restaurant owners hate it. it’s hard to break through the psychological barriers of consumers regarding menu prices. not to mention mathematical incompetence.
…and if anyone even slightly doubts the mathematical incompetence of the general public, they should just read this: https://awrestaurants.com/blog/aw-third-pound-burger-fractions
i wasn’t aware of that case study. truly chilling.
I know. I’ve tried ordering 2/3 lb. of meat at a deli counter, and watched the guy’s head explode when I placed the order. Interestingly though, they seem to understand an order for .66 lb. However, if I say .7 lb, they’re lost again, which indicates that they don’t understand decimals at all, just the numbers on the scale. But back to fractions, I think they’ve memorized that 1/2 lb = .50 (±), 1/4 lb = .25 (±), and that may be the extent of their knowledge in that arena. Or maybe it’s written on a chart for them to refer to.
This reminds me of one our employees who, while standing in front of a mirror trying to freshen up before her shift, tried to fix her hair by swiping at (wait for it!) … the mirror.
1/3 vs 1/4? Well obviously 3 is smaller than 4! 
There’s a scene in S1 of The Wire where a teenager is checking a little kid’s math homework. The little kid has messed up, but doesn’t understand why. The teen takes the question and replaces the items with dime bags – little kid answers perfectly. When asked how he could answer that but not the original, little kid says something about only one resulting a beat down if he gets it wrong.
I don’t think this is true globally
But also, regarding the deli counter is there some reason to order 2/3 of a number that is not cleanly divisible by 3?
Would you be open to separate tip lines for food and service?
There may be bad actors, but I believe most service charges are meant to benefit the non-tipped back of house.
I would! My favorite sushi place has a BOH Tip Jar and a FOH Tip Jar when you place an online order. I truly appreciate that.
back to the fee ban. here’s a good example of a business that eliminated all fees and tips about a month ago. i was curious about the prices they landed on. from the chron:
"Backhaus in San Mateo and Burlingame got rid of gratuities last month and raised prices by an average of just under 11% to cover the cost of higher wages and benefits for employees. An entry-level employee now starts at $23.50 an hour, compared to California’s $16-per-hour minimum wage. The bakery offers complete health insurance coverage for all full-time staff, in addition to previous benefits that aren’t standard in the food industry such as paid parental leave and a 401(k). "
current prices (sample)
Baguette $7
Croissant $5.5
Breakfast sandwich $15.5
Salmon plate $23
French toast $14.5
i always try to seek out places that have eliminated tipping. they need our support.
I can’t speak to how it is globally – just that we boomers learned both decimals and fractions in school. That seems to be no longer the case.
As for ordering 2/3 /lb, that just happens to be the right amount of lunch meat for me (for two or three sandwiches). I can see how that fractional quantity might be taxing to the modern young brain, given current educational standards. This is why I now request .66/lb, which can usually be understood by whoever is behind the scale.
I have only the experience of my daughter’s employer, so maybe their practice is not widespread and/or may not be legal (?) everywhere, but the boss/owner tallies the tips each night then divides them among all staff (except herself) as cash down to the penny the next day.
Any cash tips left on table are supposed to be delivered for central accounting. To my daughter’s knowledge, no one breaks this rule. At least, she’s never seen a busser pocket cash and it’s a fireable offense. She had the scheme described to her in detail during her “interview” and you either agree, or let your feet do the walking.
Tips are reported to ADP as income already paid and show up on the biweekly paystub and annual W2.
Pooling tips and distributing to non-service employees in restaurants is illegal in Massachusetts.
“(c) No employer or person shall cause, require or permit any wait staff employee, service employee, or service bartender to participate in a tip pool through which such employee remits any wage, tip or service charge, or any portion thereof, for distribution to any person who is not a wait staff employee, service employee, or service bartender.”
https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter149/Section152A
Interesting, thanks. I can see tip pooling being a problem if the restaurant has the type of wage base where waitstaff are paid below minimum wage and expected to make it up (to at least minimum wage) in tips. Because non-waitstaff must always be paid at least minimum wage. So it’d be a huge fairness issue.
Federally it appears (FLSA comment) it is not a problem so long as everyone is already paid at least minimum wage.
I guess this is one of those situations where individual states are permitted to make rules more stringent than the feds.
In my daughter’s case it wouldn’t matter much anyway since you’re not going to hire anyone for less than about $18/hr around here.
ETA - just looked it up and here it says what the FSLA says - if everyone gets at least minwage, the employer can pool.
@CCE in what state does your daughter live? AFAIK, here in Washington you can’t force tipped employees to share with non-tipped.
The more you raise prices to pay the non-tipped staff a living wage, the more the tipped staff make because people tip on % of check. Service charges can help even this out.
Agreed that different state policies, different costs of living, and varying tiers of dining just add to the confusion.
Seattle’s minimum wage is $20/hr, or $17.25 if the employer pays $2.72/hr towards medical benefits or if the employee makes at least that much per hour in tips, which would be incredibly meager tips for a sit-down nice restaurant. I’ve heard that after tipping out the bussers/runners & bartender, a server hopes to retains approx 10% of their sales in tips.
I got out of restaurants per se 10 years ago so don’t know what kitchen wages are currently; back then I was making around $40k as a salaried pastry chef - current minimum wage! 
I feel like with inflation that should be at least $60k today but I don’t know, and that’s still way below median for this area. At that last job, FOH voluntarily agreed to give 1 or 2% to the kitchen, it was only $100 or $150 a month for each of us, but it went a long way to foster good will between front & back of house.
Here as I mentioned above, the prevailing bottom wage is about $18/hr. Our state (I’m in the Southeastern US) just follows the federal minwage ($7.25), but that’s meaningless because the market sets the wage around $16-$18/hr for relatively unskilled labor (local McD’s is $18 starting, phone reception about $16 (I see listings this low, but doubt they’re filled, if McD is advertising $18), whatever, etc.).
With the pooled tips she makes around $28 an hour, on a base of about $21. That’s jumped about $5/hr in the last 18 months or so. She works as a baker in an Italian restaurant/bakery and started as a high school student.
The job listing just asked for “experienced home bakers” so she applied, they asked her how she would make a cake from scratch and apparently liked her answer (she’s been making cakes since she was a little girl), so she’s been working there during school breaks for about 5 years.
P.S. A quick google suggests you’re wrong, and that employers in WA State can pool tips as long as everyone is being paid minwage and are notified in advance. Note that I did not look up actual WA statutes, but NOLO (what I linked to) is usually fairly accurate.
I’ve been retired for quite a while but am still amazed at how salary numbers are (a) increasing but (b) still failing to keep up with inflationary costs. My two oldest daughters are both engineers and their starting salaries were kind of mind-shocking to me, but neither will be able to afford a house anytime soon. That includes the oldest, who’s married to another engineer, and their salaries combined still put them outside of that magic 33% debt/income ratio to buy a house here. (2nd edit - to buy a house they’re interested in here)
I read that as tipped employees can pool their tips to divide amongst other tipped employees but the pool doesn’t include non-tipped employees.
“Under federal law, if the employer claims a tip credit, then only employees who regularly receive tips can be part of the tip pool. Employees can’t be required to share their tips with employees who don’t usually receive their own tips, like dishwashers or cooks, unless the employer doesn’t claim a tip credit and pays the employee the minimum wage directly. And tips from a tip pool can’t go to the employer, managers, or supervisors.” (emphasis mine)
So that’s where service charges come in - since it’s not a tip, the restaurant can give some of it to non-tipped employees.
There are still many states where you can pay servers $2-3 an hour and expect them to live off tips. https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
It’s a mess!
Could be you’re right about that. I’m certainly not certain based on the NOLO summary and didn’t look up the actual WA statute. But the fed law is pretty clear - as long as the employer is not claiming the credit the pool can include everyone (tipped employees or not).
Legally, yes, due to the FLSA minimum an employer could pay less than the fed minwage (as long as tips received did actually cause the employee to make that minwage).
But practically speaking?
I wonder where it happens that a restaurant employer offers $3/hr and gets any applicants?
(Edit - maybe high-end restaurants where a cover for a couple of diners might be a hundred, 2 hundred? I could see that - the paid wage would be pretty much immaterial if I’m turning a few tables an hour and being tipped $20-$40 a table.)
Why wouldn’t an employer use the tip credit if they can? Anyway, it looks like California doesn’t have it and it’s $16 across the board.
Idk. A lot of people love tipping, it feels good to be generous but it’s problematic in other ways. CA restaurant owners are just trying to stay afloat, attract and retain talent while still competing for market share. I went out in SF last month, the restaurant had two 5% fees … there must be reasons for doing that vs raising prices, maybe they’re not taxed on fees like they are on sales? Optics?
I don’t miss the restaurant industry. 
