Thursday, August 03, 2006

Hot Tip

In what now seems to be the increasingly unlikely event that the Estate Tax Gutting and Minimum Wage Undermine Act of 2006 passes, there is a great way to attempt to assure that service personnel actually benefit from any tip that you might want to bestow for quality service.

The bill would reduce the minimum wage for any person who receives tips in an amount equal to the tips received. How much does an employer know the amount of the tip?

One way is to count the tips, if a tip jar is used, or tally them, if tips are paid via credit card. If, however, the service provider receives the tip directly in cash, the employer basically relies on self-reporting.

While my suggested solution relies on some self-interested dishonesty on the part of the employee and it's not a good thing to encourage dishonesty, I somehow think it's justified here.

If there's a tip jar, hand the tip directly to the server. If you use a credit card, put down a 10% tip on the card. Then give the employee another 10% in cash. (Why not give the entire tip in cash? The employer will always assume that some tip was given and will likely assume at least a 10% tip, if not more.)

The boss will think you're a schnorrer, but the server will think you're a hero.

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