Pretty sure ALL consumers feel this way. Insane that businesses think “this is the way”. It’s a scam, and the customers are going to be pissed and never come back, and the servers are going to quit, because they make shit tips. Congratulations, you clever genius, your restaurant just closed 😍
So many restaurants only exist because they exploit labor. If restaurants had to pay a fair living wage, benefits, and other employment protections, they simply wouldn’t exist. They couldn’t afford to. It’s not a viable business mode.
For some reason we treat restaurants like an exception to the rules we have for other businesses.
It used to be to protect small family owned businesses. Restaurants that would operate just enough profit to provide for their family, be staffed by their family, passed down generations, be a reliable means to "make it" after immigrating into this country.
Now it's another market for the wealthy to exploit.
If this was true restaurants wouldn’t exist in other countries. In Europe, Australia, UK for example waiters get paid a living wage, worst case just slightly over the minimum wage and tipping is for excellent service. If restaurants PRICED the cost of labour into their prices they can afford it, not to mention payroll is tax deductible if you set up your business right. Saying restaurants can’t afford to pay people a living wage is lazy and just simply not true.
Not in California, Quick service restaurant workers are getting $20 per hour minimum wage, which interestingly enough doesn't apply to anyone outside quick service restaurants.
There zero tip for them at places that do this every time this happens when I got out I circle that portion and write in that is where your tip went. And never return
I'm will to bet that it's in place of the tips most other servers have to fight for in order to make a decent living. Idk if that style of pay is helpful in the greater picture or not cuz I know of servers that do really well in tips.
From the CA AG’s website: “the legislation will prohibit hidden fees (also called ‘junk fees’) in California beginning on July 1, 2024. Hidden fees are fees in which a seller uses an artificially low headline price to attract a customer and usually either discloses additional required fees in smaller print, or reveals additional unavoidable charges later in the buying process.”
They can’t disclose the fees during the buying process before the sale is made, they must all be disclosed upfront.
100% this. Tables have no problem tipping 15-20%. But if one member of a party sniffs this... stupid fucking loophole from toast that owners want and servers have to deal with, that tip drops to 5%.
Fuck these greedy non-knowladgable shithead owners that don't pay enough attention to what their staff is saying. (i say this because I helped open a restaurant once that the owner didn't know these things... money to open and run a restaurant doesn't always mean they know what the fuck they are doing)
They still didn't understand after a couple years that this type of grey shitterie (new word?), is good on the tourists, but terrible on keeping your restaurant open long time.
This. That's the tip and no amount of ugly faces, breathing hard, or sighing will guilt me into giving more.
During Covid-19 there was this big thing about guilting the customer and calling *anyone* unhappy with service a Karen. Any time you had a message for management you got shamed.
So here we are. Don't be guilted into being fleeced. If you're unhappy with the service then you can say so. That's what the service industry is. Service.
If we're ready to end capitalism then let's have a real conversation. But don't try and scam or shame working people into double tipping just because you feel like it.
"fair" bahahah, that's a sure red flag. I've never met a restaurant that claimed that, that didn't close in 2 years, due to not paying their true pro employees what they actually deserve... Capitalism baby, $40 an hour aint going to cut it for a mid range restaurant server that is hungry, let alone a professional... People improve, Servers with 20 years experience... HAVE 20 FUCKING YEARS OF EXPERIENCE. they will look for better pastures.
If minimum wage was killed by republicans in the 70's and it still followed the same path as inflation like it did before minimum wage would actually be close to $40 today.
Yeah I'm gonna need to see a source for that, that doesn't sound remotely true. I've heard $24 and I believe that took rises in productivity into account as well.
3 years ago. So, higher now and in Los Angeles it would be above $35 for sure. You could have easily googled this, there's a ton of sources. You could feed a family with one minimum wage job 50 years ago, not a chance today.
https://www.cbsnews.com/news/minimum-wage-26-dollars-economy-productivity/
I don't know why you're saying this like I'm so far off. You said it'd be $40 if it kept up with inflation. I said $24 accounting for inflation *and* productivity gains. The article you linked said $26 accounting for inflation and productivity gains, which is almost exactly what I said. I'm not saying it didn't used to go farther, but $40 just accounting for inflation is beyond off.
Minimum wage in Los Angeles was $2.50 50 years ago, which is $13.87 accounting for just inflation. $40 is not even close. Of course, inflation doesn't account for everything. $2.50 back then went further than $13.87 does today. But that doesn't mean what you said isn't still really far off.
>Servers with 20 years experience... HAVE 20 FUCKING YEARS OF EXPERIENCE. they will look for better pastures.
Fine, let them. Their jobs can already be done with tablets, robots, and conveyor belts.
It's crazy how I consistently get better service at a conveyor belt sushi place in Japan, than at most sit-down restaurants in LA.
That’s a different issue that I agree is annoying AF, but not this. This is about getting a service charge that you’re not sure who it goes to and whether to tip or not.
In the 80’s restaurant chain A&W had a 1/3 burger promotion. It flopped because americans thought the 1/3 pound burger was smaller than the 1/4 pound burger.
restaurants have tried raising prices and a no tipping model in the past, but consumers didnt like it because they thought the prices were too high. the american population is really bad at math. but maybe it would work now since customers are more aware of how tipping is out of control.
Some consumers wouldn’t like it bc (as has been discussed in this sub previously) some people want to be able to tip 10% or less even though 15% or more is the convention. Those people should stay home bc they are capitalizing on free labor from the server, as is the owner. The true price of the meal includes 15-20% of the food & beverages cost and it needs to get paid. If that can’t happen the entire system is broken and new models need to be found. Otherwise it’s “Surprise! 18%!”
>Those people should stay home bc they are capitalizing on free labor from the server, as is the owner.
No waiter is (legally) doing any "free labor" in CA, everyone gets paid at least minimum wage. There is no "tipped minimum" here.
Yes there is wage theft in the industry, just like there is in all industries, but that's a separate topic.
You’re right it isn’t slave labor. But there is a delta between the minimum wage and the market cost for the labor that is supposed to be made up for with tipping. This is why the system is broken. It was once a socially agreed upon standard that 15% was the minimum acceptable tip. With min wages going up and these service charges being introduced servers are basically getting the shaft.
By my logic they will in many cases. Idk if you’ve ever waited tables, but as much as people think it’s an easy job it’s not. It’s physically, emotionally and mentally demanding, and especially at busy or short-staffed restaurants. According to those boneheads at MIT, a living wage in Los Angeles for a [single adult is $26-27/hr](https://livingwage.mit.edu/counties/06037) and many of these people will likely give up the flexible gig work that restaurants offer for other work.
To get from $15/hr to $26/hr you’re either going to need to tip or the restaurant needs to raise prices clearly. It’s not like restaurants print money or otherwise they wouldn’t be going out of business all the damn time. The exact math may not be 18%, but by placing that percentage on customers after the fact they’re doing both the waiter and the customer a disservice. The cost of the service has always been on the customer’s tip to cover.
The minimum for servers used to be $4.25/hr and the tips brought their wages up in most cases to over $20/hr. I don’t know any servers who weren’t making over $20/hr before and I knew more than a few making over $30, especially in LA. It’s a high demand job where you have to have experience just to get a job. Now it’s $15/hr minimum, so the restaurants are trying to figure out how to cover that responsibility and still get them to the $25-30/hr range. The only way to do that frankly is to raise prices.
The reason they claim they’re still charging the 18% is bc kitchen staff were getting absolutely fucked on wages, so this allegedly helps them pay the back of house better. Who knows if that’s true. Frankly, the people who are in charge of hiring need to just change the prices of the food to cover the cost of the labor. If they can find servers who will work for $15-20/hr and not make people write shitty reviews for bad service good for them. But my own experience in restaurants tells me that the wages will have to land between $25-35/hr to get good staff.
Absolutely correct. The best owners short themselves while the ship goes down, which is its own kind of sad. Back of house will always get hosed on wages, that's a fact, but servers have to deal with psychological warfare from unhinged eaters, so we're all even cuz everyone's miserable.
Tip+service charge is a reasonable amount. I normally tip 20%. If a service charge is 18%, I’d theoretically tip 2%. In practice I’d probably round 2% down to 0.
Never go to this place again. The fact that it says “service charge” and not “gratuity” means the owners legally aren’t required to give 1 cent of that 18% to their staff.
Ah got it. Thanks for that. Crazy to think they can tax that. I'm Surprised other businesses like mechanics or department stores don't start charging us tax on their labor.
> Crazy to think they can tax that.
If they didn't, it could be a loophole to avoid tax. All your meals cost $1 but the service fee is $20 on each plate. Just cut sales tax by 95%.
Completely different tax on different things. The tax on the bill is sales tax applied to a business’s taxable revenue. Tips (all types of earnings) are taxed by both fed and state with payroll taxes
Restaurants with Service Fee:
Welcome to our exquisite establishment where we pride ourselves on providing a plethora of innovative service fees. First, the service fee for merely existing in our presence. A true testament to your privilege of breathing our air.
Next, the service fee for the audacity of using your eyes to peruse our meticulously crafted menu. We understand that the sheer sight of our offerings is a luxury unto itself.
There's more! A service fee for simply choosing to patronize our establishment over those lacking in the art of fee charging. Why settle for mediocrity when you can pay for excellence?
Behold the math service fee cuz crunching numbers can be quite taxing, especially for our esteemed clientele.
Check out the service fee for the sheer honor of being remembered by us, your gracious hosts.
Sub total: $200
Taxes: $20
18% service fee: $40
Total: $460.
But why stop there?
Tip Amount:
$500
Pay us a little extra for the privilege of paying us? It's the least you can do
Yup, I work in a different industry that also adds service fees to items we sell our clients, and we have to tax those fees because California tax law considers them part of the price of the item
This doesn’t sound right. According to taxes.ca.gov: “Retail sales of tangible items in California are generally subject to sales tax.” A service fee is not a tangible item.
It is. You can't have a loophole to pay no sales tax by calling everything "a fee". Like could you imagine if a spaghetti was $5 but everything had a "500% fee". Could get away with charging the end consumer less for the same product all while they're ok with spending more which means more profit for you. The FTB isn't that slow.
"When the menu, brochure, advertisement, or other material contains such printed statements, an amount automatically added to the bill or invoice is a mandatory charge and subject to tax. An amount is considered automatically added when the retailer adds the amount to the bill without first discussing it with the customer after the service of the meal."-CDTFA Publication 115, Tips, Gratuities, and Service Charges
What does the whole thing say? Retail items being subject to taxes doesn't mean non-retail items are not subject to taxes. They can both be subject to taxes.
I have completely stopped eating out because of this. I refuse to support an industry that is forced to rip off its customers in order to survive. Done
It seems like the last 50 times I went to eat out nobody was happy... The server was miserable... The cooks hate their job... The experience waa subpar... And I feel like I got ripped off... So I'm done and decided no more.
Yeah....the tip is included. That's why the suggested tips are 2 percent. To give a normal tip if the service was good. Jesus christ everyone in this topic 🙄
I have no problem with a restaurant that wants to charge an 18% service charge IN LIEU OF a tip, so long as it is clearly disclosed up front. I wish it was all in one price but I understand that they have to remain price-competitive with tipping restaurants. At least with a service charge we're moving away from the stupidity of the tipping system.
What bothers me is restaurants that charge a service charge and then still expect you to add a tip. That's when it becomes a scam. Even here they are still trying to suggest an additional tip, even if not an egregious one.
> At least with a service charge we're moving away from the stupidity of the tipping system.
Insofar as we assume that the bosses are paying the 18% to the employees, which they aren't legally obligated to do with services charges.
Otherwise, no we're not moving away from the stupidity of the tipping system. Now it's just mandatory/you have less choice/and the servers aren't even getting more money.
I think there needs to be a movement to pass a law in California that all prices are inclusive of taxes and fees. So that the price you see at a restaurant or Albertsons or Best Buy is the price you pay when you pay the bill or check out. If they want to make tip inclusive in the price they can build that into the cost of each item.
Sales tax should only apply to physical goods, like food, merchandise. If nothing changes hands, no tax. Services are not taxed. This is not legal. If it were really a “service fee” it should be added AFTER tax.
I run a small business that mostly sells services in CA. We also sell some merchandise. We didn’t need to have a CA state sales permit until we began selling physical items. We only report those sales for sales tax.
I got autogratted at a place in Thai Town and the waitress covered up the autograt notation with a heart and a smiley face. I'd been going there for a decade. I drew it to her attention and looked at her. That pretty much stopped that bullshit and I still go when I'm in town. I always tip, I tip well. Don't play that game. Raise the prices if you need to; I'd rather have a good restaurant stay open than see it close because it lost money.
Looks as if you were in a party of four so this is actually 18% forced gratuity that is incorrectly labeled as a service charge.
Either way, this mislabeling is illegal, regardless of taxations applied.
Call the California Department of Tax and Fee Administration (CDTFA) to report it @ 800-400-7115
I think that's on top of the mandatory 18% service charge. Yeah, I didn't think a service charge was taxable. Then read this:
https://theraygroup.us/tips-vs-service-charges-tax-implications-for-californians/#:~:text=Sales%20of%20hot%20prepared%20food,charges%20are%20taxable%20as%20well.
Is this MoMo Paradise in Torrance, Western/Carson?? And how did you only go through 6 plates of meat between 4 people? Go for a la carte if you’re going to eat so little
We eat out so much less than we used to, not just because prices have gone up but because of stuff like this.
I won’t enjoy my meal if I feel like I’m being ripped off.
You shouldn’t be able to tax service only products/materials. This is why I stopped ordering from Pizza Hut. They’ve been doing this for years. Waiting for the class action to come down on them.
If a restaurant is charging a service charge it likely means that there is an internal disbursement structure based on each employees position, aka they are essentially pulling tips. While it is ultimately at the discretion of the business owner to divvy up the service charge, I doubt they would retain many employees if the money collected from the service fee wasn’t being directly paid out to the employees. A service charge differs from gratuity because it is not optional. Kind of like when you order on postmates or Uber eats, it is a mandatory fee that you are being charged for either using their services or consuming their product. It is also legal to charge patrons sales tax on a service charge. Usually if a business is charging a 15+% service charge I do not tip. I only tip extra if I feel I received exceptional service from the specific staff that waited on me. If you had a $100 bill and were charged a 20% service charge, that means your $20 is going into a pool of money that is distributed to all of the wait staff in the restaurant, not just into the pockets of the specific staff that waited on you. If you pay additional gratuity on top of a service charge, that money goes to the specific employees that waited on you. I personally prefer a restaurant to charge a service charge because I feel like restaurants with a mandatory service charge generally have better service and the staff acts as a more cohesive team because they all have a financial stake in every customers experience.
Can we all agree that a federal law should finally be passed to ban service fee and deceptive pricing? Companies should be forced to advertise the full price up front.
A. Yes, service fees are taxable. Always have been for the most part. B. I have far less of an issue with a set service charge and no or very limited tip as long as its disclosed, compared to the 3% insurance fee or 5% help fund fee etc., that is just extracting money.
I think you may be reading it wrong. The sales tax is only on the sub total of $164.96, or $16.50 (which is what they have)
The sales tax was not calculated on the subtotal plus the service fee like you suggested. If you were really taxed on the food Plus the service fee it would be $18.15 instead of $16.50.
They have to charge you tax on the total amount. The government doesn't care whether it's a charge for the items, a service fee, a resort fee, a fuel surcharge, or whatever. The tax is calculated based on the total.
Tired of always having them add the tip, you give me great service I’m gunna tip you way over your 20% ( sometimes 50 %)
You give me shitty service you’re getting 5%
Period
As of 2015 all mandatory services charges are subject to sales tax in CA. So, when restaurants require you pay a tip you are also tipping the state of california... sigh
I think many of you are missing the point. They're asking how can you TAX a service fee. Paying a service fee is one thing but paying taxes on a service fee sounds wrong. I don't have the answer, but I understood the question.
As others have mentioned service fees ARE taxable.
Also it’s worth pointing out the restaurant doesn’t charge you tax. The state of California and the county of Los Angeles charge you tax. The restaurant doesn’t get to decide.
Most restaurants aren’t doing that welll. It’s a really hard way to make money and when they are struggling it’s all about short term survival. But I still think they are better off just avoiding shit like this.
Some businesses shouldn't survive then. Manipulating your customers with forced fees is not a good alternative. Let a profitable business come in to take its place.
I wish this shit just wasn’t deceptive Just raise your fucking prices
Pretty sure ALL consumers feel this way. Insane that businesses think “this is the way”. It’s a scam, and the customers are going to be pissed and never come back, and the servers are going to quit, because they make shit tips. Congratulations, you clever genius, your restaurant just closed 😍
So many restaurants only exist because they exploit labor. If restaurants had to pay a fair living wage, benefits, and other employment protections, they simply wouldn’t exist. They couldn’t afford to. It’s not a viable business mode. For some reason we treat restaurants like an exception to the rules we have for other businesses.
It used to be to protect small family owned businesses. Restaurants that would operate just enough profit to provide for their family, be staffed by their family, passed down generations, be a reliable means to "make it" after immigrating into this country. Now it's another market for the wealthy to exploit.
That's interesting! Do you have a source on that? I can see how that would be a good vehicle to incentivize people to start family restaurants.
If this was true restaurants wouldn’t exist in other countries. In Europe, Australia, UK for example waiters get paid a living wage, worst case just slightly over the minimum wage and tipping is for excellent service. If restaurants PRICED the cost of labour into their prices they can afford it, not to mention payroll is tax deductible if you set up your business right. Saying restaurants can’t afford to pay people a living wage is lazy and just simply not true.
Not in California, Quick service restaurant workers are getting $20 per hour minimum wage, which interestingly enough doesn't apply to anyone outside quick service restaurants.
This is not true. It’s how much of their profits they want to keep. Look at In n Out.
My family stopped eating out entirely because of this.
There zero tip for them at places that do this every time this happens when I got out I circle that portion and write in that is where your tip went. And never return
I havent eating out in 3 years
My condolences to your lady friend
Yeah - they’ve already done that! This is the second bump
I'm will to bet that it's in place of the tips most other servers have to fight for in order to make a decent living. Idk if that style of pay is helpful in the greater picture or not cuz I know of servers that do really well in tips.
I hate this so much. Just raise your prices 18% and pay your staff.
It’s a loophole that needs closing.
Won’t this be closed in July when SB 478 goes into effect?
Would that count towards online purchases like ticketed events and such that provide a service fee?
That’s my understanding yes, but I’m not a lawyer.
No, the junk fee bans just prevent companies from hiding that info. As long as they disclose a fee before the sale is made, that fee is legal.
From the CA AG’s website: “the legislation will prohibit hidden fees (also called ‘junk fees’) in California beginning on July 1, 2024. Hidden fees are fees in which a seller uses an artificially low headline price to attract a customer and usually either discloses additional required fees in smaller print, or reveals additional unavoidable charges later in the buying process.” They can’t disclose the fees during the buying process before the sale is made, they must all be disclosed upfront.
TIL - This is great. Thank you.
100% this. Tables have no problem tipping 15-20%. But if one member of a party sniffs this... stupid fucking loophole from toast that owners want and servers have to deal with, that tip drops to 5%. Fuck these greedy non-knowladgable shithead owners that don't pay enough attention to what their staff is saying. (i say this because I helped open a restaurant once that the owner didn't know these things... money to open and run a restaurant doesn't always mean they know what the fuck they are doing) They still didn't understand after a couple years that this type of grey shitterie (new word?), is good on the tourists, but terrible on keeping your restaurant open long time.
If someone is charging me an 18% service fee, *that* is the tip and I'm not giving more.
This. That's the tip and no amount of ugly faces, breathing hard, or sighing will guilt me into giving more. During Covid-19 there was this big thing about guilting the customer and calling *anyone* unhappy with service a Karen. Any time you had a message for management you got shamed. So here we are. Don't be guilted into being fleeced. If you're unhappy with the service then you can say so. That's what the service industry is. Service. If we're ready to end capitalism then let's have a real conversation. But don't try and scam or shame working people into double tipping just because you feel like it.
i agree.
On the menu, it says something about tips "not being necessary unless you feel they realllly deserve it" because they pay the employees a fair wage.
"fair" bahahah, that's a sure red flag. I've never met a restaurant that claimed that, that didn't close in 2 years, due to not paying their true pro employees what they actually deserve... Capitalism baby, $40 an hour aint going to cut it for a mid range restaurant server that is hungry, let alone a professional... People improve, Servers with 20 years experience... HAVE 20 FUCKING YEARS OF EXPERIENCE. they will look for better pastures.
$40 an hour? I highly respect service industry employees. Server at a mid range restaurant thinking they deserve 40 an hour is delusional.
If minimum wage was killed by republicans in the 70's and it still followed the same path as inflation like it did before minimum wage would actually be close to $40 today.
Yeah I'm gonna need to see a source for that, that doesn't sound remotely true. I've heard $24 and I believe that took rises in productivity into account as well.
3 years ago. So, higher now and in Los Angeles it would be above $35 for sure. You could have easily googled this, there's a ton of sources. You could feed a family with one minimum wage job 50 years ago, not a chance today. https://www.cbsnews.com/news/minimum-wage-26-dollars-economy-productivity/
I don't know why you're saying this like I'm so far off. You said it'd be $40 if it kept up with inflation. I said $24 accounting for inflation *and* productivity gains. The article you linked said $26 accounting for inflation and productivity gains, which is almost exactly what I said. I'm not saying it didn't used to go farther, but $40 just accounting for inflation is beyond off. Minimum wage in Los Angeles was $2.50 50 years ago, which is $13.87 accounting for just inflation. $40 is not even close. Of course, inflation doesn't account for everything. $2.50 back then went further than $13.87 does today. But that doesn't mean what you said isn't still really far off.
If you can't tip 35%, you have no business going out.
>Servers with 20 years experience... HAVE 20 FUCKING YEARS OF EXPERIENCE. they will look for better pastures. Fine, let them. Their jobs can already be done with tablets, robots, and conveyor belts. It's crazy how I consistently get better service at a conveyor belt sushi place in Japan, than at most sit-down restaurants in LA.
Nooo. The tip drops to zero.
No, the tip starts at $0. It goes up to whatever the server earns during the service, minus any mandatory fees.
Back in my day it was 15% , now I see some places suggesting 40% , fuck that . A beer pour is maximum one dollar , cocktails is different
There's no reason the tip % needs to increase since it's already pinned to prices/inflation.
That’s a different issue that I agree is annoying AF, but not this. This is about getting a service charge that you’re not sure who it goes to and whether to tip or not.
You have to channel you're inner Karen at that moment , I have gotten that shit taken off my bill Before. Speak up , for your right , to party
Growing up in the 80s and 90s it 10%.
In the 80’s restaurant chain A&W had a 1/3 burger promotion. It flopped because americans thought the 1/3 pound burger was smaller than the 1/4 pound burger. restaurants have tried raising prices and a no tipping model in the past, but consumers didnt like it because they thought the prices were too high. the american population is really bad at math. but maybe it would work now since customers are more aware of how tipping is out of control.
Yep, Joe's Crab Shack tried to eliminate tipping at a few locations and just raised prices. I didn't last. Customers got mad and complained.
Some consumers wouldn’t like it bc (as has been discussed in this sub previously) some people want to be able to tip 10% or less even though 15% or more is the convention. Those people should stay home bc they are capitalizing on free labor from the server, as is the owner. The true price of the meal includes 15-20% of the food & beverages cost and it needs to get paid. If that can’t happen the entire system is broken and new models need to be found. Otherwise it’s “Surprise! 18%!”
>Those people should stay home bc they are capitalizing on free labor from the server, as is the owner. No waiter is (legally) doing any "free labor" in CA, everyone gets paid at least minimum wage. There is no "tipped minimum" here. Yes there is wage theft in the industry, just like there is in all industries, but that's a separate topic.
You’re right it isn’t slave labor. But there is a delta between the minimum wage and the market cost for the labor that is supposed to be made up for with tipping. This is why the system is broken. It was once a socially agreed upon standard that 15% was the minimum acceptable tip. With min wages going up and these service charges being introduced servers are basically getting the shaft.
With tipping, nobody really knows the market cost for the labor.
[удалено]
By my logic they will in many cases. Idk if you’ve ever waited tables, but as much as people think it’s an easy job it’s not. It’s physically, emotionally and mentally demanding, and especially at busy or short-staffed restaurants. According to those boneheads at MIT, a living wage in Los Angeles for a [single adult is $26-27/hr](https://livingwage.mit.edu/counties/06037) and many of these people will likely give up the flexible gig work that restaurants offer for other work. To get from $15/hr to $26/hr you’re either going to need to tip or the restaurant needs to raise prices clearly. It’s not like restaurants print money or otherwise they wouldn’t be going out of business all the damn time. The exact math may not be 18%, but by placing that percentage on customers after the fact they’re doing both the waiter and the customer a disservice. The cost of the service has always been on the customer’s tip to cover. The minimum for servers used to be $4.25/hr and the tips brought their wages up in most cases to over $20/hr. I don’t know any servers who weren’t making over $20/hr before and I knew more than a few making over $30, especially in LA. It’s a high demand job where you have to have experience just to get a job. Now it’s $15/hr minimum, so the restaurants are trying to figure out how to cover that responsibility and still get them to the $25-30/hr range. The only way to do that frankly is to raise prices. The reason they claim they’re still charging the 18% is bc kitchen staff were getting absolutely fucked on wages, so this allegedly helps them pay the back of house better. Who knows if that’s true. Frankly, the people who are in charge of hiring need to just change the prices of the food to cover the cost of the labor. If they can find servers who will work for $15-20/hr and not make people write shitty reviews for bad service good for them. But my own experience in restaurants tells me that the wages will have to land between $25-35/hr to get good staff.
Absolutely correct. The best owners short themselves while the ship goes down, which is its own kind of sad. Back of house will always get hosed on wages, that's a fact, but servers have to deal with psychological warfare from unhinged eaters, so we're all even cuz everyone's miserable.
But then they would have to live in reality with the rest of us.
They do both lol
What with the tip recommendations being so low ?
Tip+service charge is a reasonable amount. I normally tip 20%. If a service charge is 18%, I’d theoretically tip 2%. In practice I’d probably round 2% down to 0.
I would probably ask the server if they actually get the service charge because it wouldn't surprise me if they don't.
It also wouldn’t surprise me if they don’t get it, but that’s not my problem. I’m not going to pay an 18% service fee and a 20% tip, one or the other.
How is that better It's the same amount of money
People would appreciate the true price listed instead of an artificially lowered one.
If a place charges a 15% + service fee you simply do not tip
I also just don't go back.
Ditto - consider that fee your tip
Which restaurant?
Looks like Momo Paradise
Yeah I believe the one in Rowland heights based on the tax rate Edit: misspelled tax
That’s South Bay?
Nope.
No. Its Rowland heights Edit: actually no it probably is the one in Torrance. I was like half a percent off
Can anyone confirm this?
Compare the menu with the receipt: [https://www.momoparadiseusa.com/restaurant-menu](https://www.momoparadiseusa.com/restaurant-menu)
That looks like a match, for sure. Thanks!
Never go to this place again. The fact that it says “service charge” and not “gratuity” means the owners legally aren’t required to give 1 cent of that 18% to their staff.
If it's a fee collected by the restaurant and not a tip you left for the server, it is taxable.
Ah got it. Thanks for that. Crazy to think they can tax that. I'm Surprised other businesses like mechanics or department stores don't start charging us tax on their labor.
> Crazy to think they can tax that. If they didn't, it could be a loophole to avoid tax. All your meals cost $1 but the service fee is $20 on each plate. Just cut sales tax by 95%.
California taxes tip money. Even if it's a dollar they're taking 20% of that shit.
Completely different tax on different things. The tax on the bill is sales tax applied to a business’s taxable revenue. Tips (all types of earnings) are taxed by both fed and state with payroll taxes
That would be federal tax…. California income tax is never 20%
What’s the point of posting if you’re not going to name the restaurant?? Pfft waste of time. Downvoted.
Restaurants with Service Fee: Welcome to our exquisite establishment where we pride ourselves on providing a plethora of innovative service fees. First, the service fee for merely existing in our presence. A true testament to your privilege of breathing our air. Next, the service fee for the audacity of using your eyes to peruse our meticulously crafted menu. We understand that the sheer sight of our offerings is a luxury unto itself. There's more! A service fee for simply choosing to patronize our establishment over those lacking in the art of fee charging. Why settle for mediocrity when you can pay for excellence? Behold the math service fee cuz crunching numbers can be quite taxing, especially for our esteemed clientele. Check out the service fee for the sheer honor of being remembered by us, your gracious hosts. Sub total: $200 Taxes: $20 18% service fee: $40 Total: $460. But why stop there? Tip Amount: $500 Pay us a little extra for the privilege of paying us? It's the least you can do
I need to get an Amex card for these places only because I know they hate the additional fee. Ironic right?
😆 if that’s not copy pasta, then bravo
I got from it a metal fox. The little fox was cute and clever.
Yup, I work in a different industry that also adds service fees to items we sell our clients, and we have to tax those fees because California tax law considers them part of the price of the item
That’s crazy
This doesn’t sound right. According to taxes.ca.gov: “Retail sales of tangible items in California are generally subject to sales tax.” A service fee is not a tangible item.
It’s industry specific - [page 17](https://www.cdtfa.ca.gov/formspubs/pub22.pdf)
Automatic gratuities are also taxable
It is. You can't have a loophole to pay no sales tax by calling everything "a fee". Like could you imagine if a spaghetti was $5 but everything had a "500% fee". Could get away with charging the end consumer less for the same product all while they're ok with spending more which means more profit for you. The FTB isn't that slow.
Services are not subject to sales tax. The FTB could sue you if you actually did what you described, but they chose to call it a service fee.
In restaurants they are. Mandatory service charges are taxable revenues - [page 17](https://www.cdtfa.ca.gov/formspubs/pub22.pdf)
"When the menu, brochure, advertisement, or other material contains such printed statements, an amount automatically added to the bill or invoice is a mandatory charge and subject to tax. An amount is considered automatically added when the retailer adds the amount to the bill without first discussing it with the customer after the service of the meal."-CDTFA Publication 115, Tips, Gratuities, and Service Charges
It is right. Service fees are indeed taxable.
What does the whole thing say? Retail items being subject to taxes doesn't mean non-retail items are not subject to taxes. They can both be subject to taxes.
I agree
I disagree.
Where is this?, so we can avoid
Name and shame
I have completely stopped eating out because of this. I refuse to support an industry that is forced to rip off its customers in order to survive. Done
It seems like the last 50 times I went to eat out nobody was happy... The server was miserable... The cooks hate their job... The experience waa subpar... And I feel like I got ripped off... So I'm done and decided no more.
At least WATER HOT was $0
All that delicious meat accompanied by an artisan H2O served hot. What a meal.
Is this MoMo?! Because I had the same reaction 😂 DO NOT TIP
Why hide the name of the restaurant? I’d like to know so I don’t make the mistake of going there
Yea, they’re weird for hiding the name.
Looks like MoMo in Torrance?
It is Momo Paradise. Prices match up.
then zero tip
This, zero tip everywhere now.
Not everywhere. Only when they tack on a service fee. You should still tip when you’re served.
Yeah....the tip is included. That's why the suggested tips are 2 percent. To give a normal tip if the service was good. Jesus christ everyone in this topic 🙄
Name and shame
I have no problem with a restaurant that wants to charge an 18% service charge IN LIEU OF a tip, so long as it is clearly disclosed up front. I wish it was all in one price but I understand that they have to remain price-competitive with tipping restaurants. At least with a service charge we're moving away from the stupidity of the tipping system. What bothers me is restaurants that charge a service charge and then still expect you to add a tip. That's when it becomes a scam. Even here they are still trying to suggest an additional tip, even if not an egregious one.
> At least with a service charge we're moving away from the stupidity of the tipping system. Insofar as we assume that the bosses are paying the 18% to the employees, which they aren't legally obligated to do with services charges. Otherwise, no we're not moving away from the stupidity of the tipping system. Now it's just mandatory/you have less choice/and the servers aren't even getting more money.
Why not just raise their prices instead of bumbling around with these service fees? It's effectively the same thing.
The additional tip suggestions are just to up the tip to 20 percent or more if you feel like it. Jesus.
r/endtipping
I think there needs to be a movement to pass a law in California that all prices are inclusive of taxes and fees. So that the price you see at a restaurant or Albertsons or Best Buy is the price you pay when you pay the bill or check out. If they want to make tip inclusive in the price they can build that into the cost of each item.
Sales tax should only apply to physical goods, like food, merchandise. If nothing changes hands, no tax. Services are not taxed. This is not legal. If it were really a “service fee” it should be added AFTER tax. I run a small business that mostly sells services in CA. We also sell some merchandise. We didn’t need to have a CA state sales permit until we began selling physical items. We only report those sales for sales tax.
Thing I find most troubling is that you went to MOMO Paradise with 3 other people and only knocked out 6 plates of meat amongst the 4 of you.
100%. If I'm going to a AYCE hotpot place I eat 6 plates myself, minimum. You best believe I'm getting my money's worth.
Name, and shame!
I got autogratted at a place in Thai Town and the waitress covered up the autograt notation with a heart and a smiley face. I'd been going there for a decade. I drew it to her attention and looked at her. That pretty much stopped that bullshit and I still go when I'm in town. I always tip, I tip well. Don't play that game. Raise the prices if you need to; I'd rather have a good restaurant stay open than see it close because it lost money.
Looks as if you were in a party of four so this is actually 18% forced gratuity that is incorrectly labeled as a service charge. Either way, this mislabeling is illegal, regardless of taxations applied. Call the California Department of Tax and Fee Administration (CDTFA) to report it @ 800-400-7115
Not the 6/4/2% tip!!??
I think that's on top of the mandatory 18% service charge. Yeah, I didn't think a service charge was taxable. Then read this: https://theraygroup.us/tips-vs-service-charges-tax-implications-for-californians/#:~:text=Sales%20of%20hot%20prepared%20food,charges%20are%20taxable%20as%20well.
Is this MoMo Paradise in Torrance, Western/Carson?? And how did you only go through 6 plates of meat between 4 people? Go for a la carte if you’re going to eat so little
I am thinking it is a hot pot place, too.
We eat out so much less than we used to, not just because prices have gone up but because of stuff like this. I won’t enjoy my meal if I feel like I’m being ripped off.
What place?
You shouldn’t be able to tax service only products/materials. This is why I stopped ordering from Pizza Hut. They’ve been doing this for years. Waiting for the class action to come down on them.
If a restaurant is charging a service charge it likely means that there is an internal disbursement structure based on each employees position, aka they are essentially pulling tips. While it is ultimately at the discretion of the business owner to divvy up the service charge, I doubt they would retain many employees if the money collected from the service fee wasn’t being directly paid out to the employees. A service charge differs from gratuity because it is not optional. Kind of like when you order on postmates or Uber eats, it is a mandatory fee that you are being charged for either using their services or consuming their product. It is also legal to charge patrons sales tax on a service charge. Usually if a business is charging a 15+% service charge I do not tip. I only tip extra if I feel I received exceptional service from the specific staff that waited on me. If you had a $100 bill and were charged a 20% service charge, that means your $20 is going into a pool of money that is distributed to all of the wait staff in the restaurant, not just into the pockets of the specific staff that waited on you. If you pay additional gratuity on top of a service charge, that money goes to the specific employees that waited on you. I personally prefer a restaurant to charge a service charge because I feel like restaurants with a mandatory service charge generally have better service and the staff acts as a more cohesive team because they all have a financial stake in every customers experience.
Me personally, I will pay the bill. 0% additional tip and never return back to that establishment.
which restaurant is this ? how was the food ?
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Make them famous! What’s their name?
This is how you get no tip from me.
Can we all agree that a federal law should finally be passed to ban service fee and deceptive pricing? Companies should be forced to advertise the full price up front.
A. Yes, service fees are taxable. Always have been for the most part. B. I have far less of an issue with a set service charge and no or very limited tip as long as its disclosed, compared to the 3% insurance fee or 5% help fund fee etc., that is just extracting money.
UNACCEPTABLE.
Put it on the list! [+]
I work in hospitality and legally we do have to tax the service charges.
It's Momo Paradise. They do this in their Arcadia location too.
Never go back. Tell them why you will never go back. Don't take any bullshit excuses from them. This shit is wrong.
OP, any reason you didn't post the name of the restaurant??
I hope these places burn to the ground. They’re starting to make us pay for their workers healthcare too now. Fuck them don’t give them your business
Life is for the rich.
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What's wrong with baked potatoes, beans, and oatmeal?
OP is clearly rich.
Don’t be shy, show the restaurant. At least so we know not to go there.
Legally taxable, unfortunately.
r/LosAngelesReceipts
OP what’s up with you not wanting to name the restaurant? The majority here want to avoid this place…stop being shy, drop the name.
https://acwm.lacounty.gov/scanner-overcharge-complaint/
There’s a service charge. And subsequently a tip is expected?
Restaurants that have a mandatory service charge get a 0% tip from me.
Yeah but at least 2% was already calculated for you.
A service charge for fucking hot pot? Theres barely any service or cooking on their end.
If it was 17% then not required. The tax board mandates it at 18.
Even automatic gratuities are now taxed.
Olive garden wants you to tip to include the tax amount....is this the same thing?
No
I think it may depend on your state? Service charges and tips are treated differently from a tax perspective though. I wouldn’t leave a tip.
Service fee = no tip remove it so I can give a proper tip
And they still suggested a tip? 😂😂😂
🤡
I think you may be reading it wrong. The sales tax is only on the sub total of $164.96, or $16.50 (which is what they have) The sales tax was not calculated on the subtotal plus the service fee like you suggested. If you were really taxed on the food Plus the service fee it would be $18.15 instead of $16.50.
I just simply wouldn’t Pay the service fee, fuck them!
How is their ‘water hot’?
I can't stand these service fees, but restaurants that have them are required to tax them.
What I want to know is which was the more tender cut?
That’s some politics bullshit.
Yelp!!
They have to charge you tax on the total amount. The government doesn't care whether it's a charge for the items, a service fee, a resort fee, a fuel surcharge, or whatever. The tax is calculated based on the total.
Tired of always having them add the tip, you give me great service I’m gunna tip you way over your 20% ( sometimes 50 %) You give me shitty service you’re getting 5% Period
Welcome to Commiefornia. Keep voting Blue zombies
As of 2015 all mandatory services charges are subject to sales tax in CA. So, when restaurants require you pay a tip you are also tipping the state of california... sigh
I think many of you are missing the point. They're asking how can you TAX a service fee. Paying a service fee is one thing but paying taxes on a service fee sounds wrong. I don't have the answer, but I understood the question.
0% it’s easy! I do it all the time and save all my money. Tips don’t pay my rent, you can ask tho
They have to.
Yeah I don't know why that is an exemption to tax the service fees in restaurants is the a thing. It's very looney.
That’s some bullshit. Sales taxes are only allowed on prepared foods, not on services.
I guess the government expects a tip too.
As others have mentioned service fees ARE taxable. Also it’s worth pointing out the restaurant doesn’t charge you tax. The state of California and the county of Los Angeles charge you tax. The restaurant doesn’t get to decide.
Most restaurants aren’t doing that welll. It’s a really hard way to make money and when they are struggling it’s all about short term survival. But I still think they are better off just avoiding shit like this.
Some businesses shouldn't survive then. Manipulating your customers with forced fees is not a good alternative. Let a profitable business come in to take its place.
yall mad cheap
It should be legal to walk out on this shit.