New rules on tipping have servers concerned

Created: 03/21/2014 10:29 PM
By: Ryan Luby, KOB Eyewitness News 4

The IRS just changed a rule about mandatory tips that could save you a few bucks, but leaders in the restaurant industry say it will only hurt the people who depend on tips to pay their bills at home.

We tend to look at new rules in a glass-half-empty, glass-half-full type of way.

Talk to some servers about placing restrictions on tips, they might tell you that's a glass half-broken idea. As servers at Monroe's restaurant work hard to collect the tips they want, they now have a new hurdle to clear.

The IRS says restaurant owners can no longer mandate tips of 17 or 18 percent from customers for groups of six or more unless they treat those tips as service charges.

That means the mandated tips go to the restaurant first, not directly to the server.

Carol White, CEO of the New Mexico Restaurant Association, says servers could lose a big part of their income if cheapskate customers don't pay the customary 15 to 20 percent at a large table.

White says some New Mexico restaurants didn't realize the new rule went into effect on January 1, and she says if they don't implement the changes, by bagging the mandated tips, they could suffer in an audit if they didn't pay their taxes accurately.

At Monroe's, mandated tips are already gone. Servers just hope you pay them appropriately.

Remember, tipped employees rely on their tips. Most do not earn hourly wages of any more than $2.13 per hour.

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