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Definitely Doug 10/18/19
Posted: 12/06/2019

Sustainable Innovation
 
Sustainability can yield multiple benefits to hotels. Saving energy and water yields direct cost savings. Revenue can be generated by guests who prefer to deal with businesses that minimize their environmental impact. And many would argue that conserving scarce resources is simply the right thing to do.

Definitely Doug 12/6/19
Posted: 12/06/2019

Meetings Innovation
 
The sale and delivery of groups and meetings is perhaps the most significant and under-automated functions for many hotels. Even though groups often account for 30% to 60% of revenue, most group bookings are still handled manually for most if not all of steps, as they move from a meeting planner’s research to a confirmed booking.

The biggest enemy to any system is complexity. In a system of inputs and outputs, such as an enterprise system, more complexity means more parts are used in interaction with inputs to create the outputs. Every part that must be built and maintained costs time and money

Tracking the evolution of key performance indicators (KPIs) over time allows hoteliers to identify meaningful trends, create forecasts and budgets and assess the results of different strategies. To perform this kind of analysis, data has to be recorded within consistent time intervals and in chronological order. This is known as a time series.

Definitely Doug 11/15/19
Posted: 11/15/2019

Every time I turn around these days, I see a new vendor or product promising something called a complete Guest Experience Management, Guest Journey Management, or Guest Engagement (or some variation on those words). This week I looked at some of the emerging products claiming to be in this space, both to try to better understand it, and to see what promising ideas it may hold.



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Automatic Tipping Faces Uncertain Future

10/31/2013
by John Riccione

Large parties might no longer be subject to required tipping

 Tipping is a practice that varies from culture to culture. In many countries, tipping isn’t expected and in some cases, it is not even allowed. However, in America, servers and bartenders rely on tips for their economic survival. And, Americans are quite generous when it comes to their tipping practices. According to recent statistics released in The Wall Street Journal, the average American tips around 19.1% when dining out, a number that has increased steadily over the years.

While generosity with the wait staff seems to be expected and commonplace, many restaurants still adhere to an automatic tipping policy for large parties. For example, national chains like Olive Garden and Red Lobster add an 18% gratuity to the bill for parties of 8 or more. It’s a practice that is meant to help protect the server and ensure that they receive adequate compensation for all of their hard work. If a server spends half of her shift tending to a large party that ultimately ends up stiffing up on the check, it could mean that he or she might not earn enough that day to pay for his or her cost of living.

However, the practice of automatic tipping might soon be on the way out. Recently, the Internal Revenue Service (IRS) announced that it would no longer consider automatic tips as a gratuity. Instead, the IRS will now view automatic tipping as a service charge, which means that this amount will now be subject to payroll tax withholding.

Generally, servers are in charge of reporting their own tips. The amount of their tips is then added to their base wage in order to ensure that servers are making at least minimum wage per each shift. However, now when it comes to automatic tipping, the amount will be withheld until payday as part of their general pay. Not only will this mean increased costs and paperwork for restaurant owners, but it will also mean that servers will have to wait until payday before they are able to get their tips from large tables. Most servers rely on these big-ticket tips in order to help them pay their bills, and waiting a few weeks to receive their pay can be a hardship that many servers would rather not endure. That’s why many servers are upfront about their displeasure with the IRS mandate, and it is part of the reason why so many restaurants are now considering ditching their automatic tipping mandate.

Alternatively, even if restaurants do not abolish automatic tipping, servers will be unable to receive their tips for large parties until they receive their paycheck each month.  Yet most servers prefer to go home with their tips in their pocket, as this allows them to budget and to be on top of how much they earn and how much they can afford.

 It’s just another cost that many restaurants cannot afford, especially since many establishments are now scrambling to get health insurance for their employees who work 30 hours a week or more. All restaurants who employ 50 or more people must now provide health insurance to their staff, although the Obama Administration recently gave employers until 2015 before they will start facing fines for failing to do so.

As with the Affordable Care Act, many people are now balking at the IRS’s new decree on automatic tipping. It’s another example of how the least wealthy in our country become those who pay the highest price for the country’s floundering economy and lack of stability. Servers are already overworked, and with this new mandate, many restaurants will likely now get rid of automatic tipping altogether. This means that servers will be at risk of being underpaid while serving large tables, a reality which could prove to greatly decrease their take-home pay at the end of each shift.

Now, with automatic tipping under fire, it seems that servers will be the one who ultimately pay the price for the IRS’s surprising decision. Let’s hope that Americans continue to be as generous with their tips as they have been in the past, especially when it comes to large parties. 

 

 

About The Author
John Riccione

Aronberg Goldgehn


About Aronberg Goldgehn Davis & Garmisa
Founded in Chicago in 1892, Aronberg Goldgehn Davis & Garmisa is one of the oldest law firms in the city. The mid-size firm provides legal representation to businesses, families and individuals in nearly every major area of practice, including but not limited to Appellate Litigation, Health Care, Labor & Employment, Construction Law, and Divorce & Family Law. Aronberg Goldgehn Davis & Garmisa embraces an “everybody’s different” philosophy, meaning that their attorneys take the time to get to know their clients personally, tailoring service to the specific needs of each individual case. Aronberg Goldgehn Davis & Garmisa is located at 330 N. Wabash Ave, Suite 1700, Chicago, IL 60611. Visit them online at http://www.agdglaw.com or call (312) 828-9600 for more information.

 
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