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A great deal has been written over the years about the viability of moving a hotel’s property-management system (PMS) to the cloud to take advantage of the latest technologies, but hoteliers need to realize that it’s not the only viable option. All platforms have advantages, including self-hosted, private cloud and on-premise solutions that leverage the latest mobile, contact free and web-based technologies. Independent operators can still enhance the digital guest experience, support personalized and mobile check-in, deploy contact free technologies, and secure hotel/guest data even if their PMS does not reside in the cloud. It should not be a question of “Cloud or On Premise?” but rather “Does the PMS solve your business objectives in both technology and service?”

Much has been written in the mainstream hospitality press about the challenges COVID-19 has presented to the industry. Hotels are in more pain than at any time in our memories. Because of the extensive media coverage, I won’t dwell on this topic further in what is primarily a technology column. But it’s the background for this week’s column, and so merits acknowledgement.

Are You All In?
Posted: 07/27/2020

Imagine everyone in your organization engaged, aligned, and performing to their potential. Imagine everyone playing “All In.”

Great organizations have synergy. Their culture allows them to play to a rhythm at a different tempo than the average organization. How do you get that at your organization?

Many front-line hospitality workers rely on tips for a significant part of their paychecks. If not for tips, many hotel associates who serve as waitstaff, bartenders, housekeepers, bell staff, concierges and pool attendants would soon be looking for other jobs. This is a regional issue: in most of Asia and Europe, staff get higher base pay, and tips are either not expected at all, or are truly discretionary. But in the U.S., Canada, Britain and other countries, tips are an important reality, and one that’s not likely to change anytime soon.

As somebody who’s helped to grow a company from 13 people to nearly a thousand, I know very well the excitement that comes with having a mindset focused entirely on growth. Every newly acquired customer, every new office and every milestone means the gap between you and your nearest competitor is that much bigger and that much harder to overtake.



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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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