Wednesday, September 25, 2013 • page 15
New IRS regulations take a bite out of server wages
lan Luther
Columnist
In the vast and complex network that is
the United States tax system, where should we
focus our scmtiny? Who should we make sure
is paying their fair share?
Many might say “big
banks,” or “enormous
international conglomer
ates.” But according to
the Internal Revenue
Service, it’s your friendly
local Waffle House
waitress, and every other
ser\rer across the country.
Starting in January,
automatic gratuities
on large parties will be
taxed as a wage, not
a tip. While this seems like a meaningless
distinction, it means huge changes for servers
across the country, and for the restaurants that
employ them.
As a waiter at your favorite soup-salad-and-
breadsticks dispensary, Olive Garden, this law
hits home harder for me than it does for most.
But for the majority who’ve never had the mis
fortune of seeing a party of 14 bad-tempered
customers determined to take “Never-Ending
Pasta Bowl” literally, allow me to explain the
concern.
Let’s start at the beginning, with the
minimum wage for tipped employees: $2.13
an hour. Some states go as high as about $5
an hour, but North Carolina has been kind
enough to keep it at the lowest federally
guaranteed amount. After taxes, this function
ally comes out to zero dollars an hour, give or
take a couple cents either way (yes, you can lose
money).
So then it comes down to your tips. But
tips aren’t a sure thing, either, when you have
to count on the, often non-existent generosity
of your customers. But no matter how good or
how bad a night you have, the way to get paid
is about as simple as it gets: the cash you walk
with at the end of the night is what you made
during that shift.
Until this new law passes, that is. With this
change in classification, the automatic 18 per
cent on large parties suddenly becomes a wage,
not a tip. Servers get their tips the very same
night they work, but wages become a biweekly
check, with taxes already taken out of them.
National chain restaurants like Applebee’s,
Chili’s and Olive Garden (cough cough) are al
ready considering ending automatic gratuities,
simply because the new regulations will be too
big a hassle. This means servers, in the one area
they could guarantee a reasonable return for
their work, won’t even get that.
Now, I want to clarify one thing. For the
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PHOTO COURTESY OF MOT CAMPUS
New regulations by the IRS mean big changes for how servers get paid on large tables, if they do at all.
most part, serving is a great gig. It pays well
(usually), and it’s not terribly unpleasant
(sometimes) and for a part-time job in college,
it’s better than most.
But working behind the scenes, you interact
with a very different world than Elon’s warm,
insulated, money-injected atmosphere. The
average ChUi’s waitress is there to provide for
her family, not for another round of drinks next
weekend. And for people whose families and
livelihoods depend on what’s left on the table
after you leave, changes in how they get paid
can have a huge impact.
Odds are the generous folks at the IRS
aren’t going to change their minds, and serv
ers all over the country will probably end up
taking one more hit to their wallets. So the
responsibility falls on you, the Bloomin’-On-
ion-ordering,endless-breadstick-consuming
customer. Tip us what you should, and we’U
make it worth your while. In fact, there just
might be an extra breadstick in it for you.
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