A question from a curious UKer

[Sue's Mum]

I was reading a thread in the DVC section about tipping and wages. I started wondering what is the point is in having a "minimum wage" if employers are not paying that "minimum wage". I am sure there is a perfectly logical explanation somewhere!

As far as I am aware, UK employers have to pay their employees the minimum wage.

 

[clarabelle]

All non-tipping positions have to be paid the minimum wage. So if you were being hired in retail or daycare -something like that you would have to get the minimum wage.
As far as I know the only jobs that can get away with paying less are waiting tables. There is an assumption on the part of the government that people will be making tips.

 

[mjkacmom]

Yes, in most states, servers get far less than minimum wage, and are taxed on the expectation that they received at least a 10% tip on each bill (I could be wrong about the amount). There is a minimum wage for servers, depending upon state - can be as little as $2.13 an hour.

 

[sdarwkcabemanmy]

You also get less than min. wage if you're on commission. When DH and I were dating, I worked in the shoe dept. of a major retail dept. store chain and made about $2.50/hr plus whatever commissions I got (which was based on the brand as well as the type. Certain shoes got a higher commission than others).

 

[Sue's Mum]

Thanks to everyone for taking the time to answer my question.

 

[dejr_8]

Yes, in most states, servers get far less than minimum wage, and are taxed on the expectation that they received at least a 10% tip on each bill (I could be wrong about the amount). There is a minimum wage for servers, depending upon state - can be as little as $2.13 an hour.

This is a very important point. When you don't tip, the waiter/waitress actually loses money on your meal.

For example: On a $100 bill, the government "assumes" that you received a tip of $8 (I always thought the % was 8% not 10%) and makes you pay taxes on that amount. So even if you don't get a tip, you are left paying the taxes on the $8 that you never earned.

Note, however that you are supposed to report ALL of your tip income even that which exceeds 8%.

 

[Uuaww]

This is a very important point. When you don't tip, the waiter/waitress actually loses money on your meal.

For example: On a $100 bill, the government "assumes" that you received a tip of $8 (I always thought the % was 8% not 10%) and makes you pay taxes on that amount. So even if you don't get a tip, you are left paying the taxes on the $8 that you never earned.

Note, however that you are supposed to report ALL of your tip income even that which exceeds 8%.

Yeah... supposed to, but don't haha.

 

[ConcKahuna]

Tipped positions that may not recive minimum wage:

Servers
Valet
Bell services
hairdressers
cab driver/chauffeur
Food delivery person (like the pizza guy/gal)

 

[Luv'sTink]

OR in some states EVERYONE is paid at least minimum wage, (as all states should require) and still want a 15-20% tip.

 

[lisadr]

Here's how it works:

It is assumed that in certain jobs you will be tipped and that tip plus you hourly wage, which differs in states (In NY it's $4.60 hour, will bring you up to the federal minimum wage ($7.25 I believe).

If at the end of your work week your claimed tips (which equals your cash, charge and added gratuities (15-20%) does not add up to the federal min. wage the employer must pay you more to bring you up to the federal min. wage.

I could get into good and the bad of being a tipped employee, but I won't I always did how everyone else was doing-by that I mean when the economy is good I did well-and now that people are hurting I am feeling it. People are spending less, tipping less and just not going out to eat at all .

Basically it's a gamble, but it affords me flexible works hours which is what I need from an essentially part time job.

P.S. When I was in England, Ireland, and Germany I always tipped (being a bartender.server I can't not do it) and got mixed reviews. In Ireland and England I was loved by the bartenders and yelled at by the regulars for "spoiling them" -lol. It was just good natured ribbing, but in Germany I apparently insulted a waited for leaving him a tip-although I don't understand the cultural meaning behind it?? But I had a rough 3 months in Germany altogether-lol.

 

[Mr. & Mrs. Smith]

As far as I am aware, UK employers have to pay their employees the minimum wage.

This is how it works in Canada. It doesn't matter if you are in a tipped position or not, you have to be paid by your employer at least minimum wage. Minimum wage varies from province/territory to province/territory. Where we live, it's $7.75/hr, the lowest in the country. It goes up as high as $10.00/hr. So, if you make tips, that's just a bonus. However, you are in a different category come income tax time.

 

[Violet Crayon]

This reminds me of a kid I met at work the other day.
I was standing in the river holding my camera and this boy around 7yrs old floats by on a noodle.

boy: (with British accent) hi miss!
me: hello!
boy:do you like your job?
me:yeah, it's a lot of fun.
boy:how much are you paid?
me:I can't really talk about that, but it is more than minimum wage.
boy:that's good. did you know a waitress only makes two or three dollars an hour here?
me: they do, but they get tips to make up for it.
boy:wellll, where I am from everyone gets minimum wage.
me: that's a good plan.
boy:yeah, well, it was nice to meet you!

and he floats off.

I wonder who he had been talking or listening to, ha.

 

[Chicago526]

I worked at Rainforest Cafe after highschool, back when it was new and there were only two in existance. We're talking 3-4 hour waits for a table on weekends. I was a hostess so I wasn't tipped, I made $6 an hour, which was more than minimum wage at the time ($5 something an hour I think). But wait staff made about half minimum wage and got the rest in tips. Those waiters made big $$$$, I didn't feel sorry for them one bit. They worked their butts off but made good money doing it.

It sounds bad that a person makes less than minimum, but if they are good at what they do and work at a busy place, they can make FAR more than they would in a hourly position.

 

[Michelle67]

In Washington all employees must make at least minimum wage (which, I believe, is the highest in the country) regardless of whether they receive tips. The only exception is "casual labor" such as babysitters, neighborhood boys that mow the lawn, etc.

 

[Mr. & Mrs. Smith]

It sounds bad that a person makes less than minimum, but if they are good at what they do and work at a busy place, they can make FAR more than they would in a hourly position.

But if they were paid minimum wage and worked hard, they could make even more money. I, personally, have a problem paying people less than minimum wage. That means that the employees aren't really being paid by their employers. Instead they are relying on me to pay them their wages. Then I get into the situation where I feel terribly guilty if I don't tip substantially in the US, no matter what kind of service I get. It would just be nice if everyone could be guarenteed a certain income.

 

[Kath2003]

But if they were paid minimum wage and worked hard, they could make even more money. I, personally, have a problem paying people less than minimum wage. That means that the employees aren't really being paid by their employers. Instead they are relying on me to pay them their wages. Then I get into the situation where I feel terribly guilty if I don't tip substantially in the US, no matter what kind of service I get. It would just be nice if everyone could be guarenteed a certain income.

True but equally in the UK I do have a problem with tipping. Why should a waitress be given tips but a shop assistant not? Why should a waiter be given tips but a cleaner not? They are all 'unskilled' jobs in that they do not usually require a specific level of education; they are all paid the minimum wage ($10/hour here), so why should the person who brings me my food deserve more money than the shop assistant that lets me try on the shoes?

 

[Mr. & Mrs. Smith]

True but equally in the UK I do have a problem with tipping. Why should a waitress be given tips but a shop assistant not? Why should a waiter be given tips but a cleaner not? They are all 'unskilled' jobs in that they do not usually require a specific level of education; they are all paid the minimum wage ($10/hour here), so why should the person who brings me my food deserve more money than the shop assistant that lets me try on the shoes?

I'm not sure how it works in the UK but in Canada, a worker in a tipped position is in a different tax bracket. So, he/she is getting taxed for those tips. And usually there is nothing to stop someone so inclined to tip a cleaner or shop assistant. So I say if you think they deserve tips, tip away.

 

[Claire L]

There was a recent article in the news here that the Hard Rock Cafe in London did not pay the minimum wage as they said the tips would add up to the minimum wage, but now the servers have won and they get minimum wage plus tips, so are getting at least £5.73 ($8.36 at current exchange rate) an hour. I must say they probably need it living in London.

Claire

 

[Chicago526]

But if they were paid minimum wage and worked hard, they could make even more money. I, personally, have a problem paying people less than minimum wage. That means that the employees aren't really being paid by their employers. Instead they are relying on me to pay them their wages. Then I get into the situation where I feel terribly guilty if I don't tip substantially in the US, no matter what kind of service I get. It would just be nice if everyone could be guarenteed a certain income.

I guess you could look at it that way, but anyone going in to a tipped position knows (or should know) that's how it works, and if they don't feel comfortable with that, they can always look for a different type of job. The waiters I knew didn't really pay much mind to their paychecks, they counted solely on their tips to pay the bills, their paycheck was usually considered fun money, or put it in savings for a rainey day, or for a bad week when they didn't get much in tips (it happens even to good waiters). To me,that's the rough part of being on tips or commision, you're never quite sure what your take home pay is going to be month to month.

Don't worry too much about under tipping. As long as you tip at least 12% for average service, you're doing fine. And if you get bad service, don't be affraid to cut that. The tip IS supposed to be for good service and if the waiter isn't doing their job, they don't deserve it, minimum wage or no.

 

[Kath2003]

I'm not sure how it works in the UK but in Canada, a worker in a tipped position is in a different tax bracket. So, he/she is getting taxed for those tips. And usually there is nothing to stop someone so inclined to tip a cleaner or shop assistant. So I say if you think they deserve tips, tip away.

We don't have that system here; everyone works for the same minimum wage and pays the same amount of tax. I have never met a shop assistant that was allowed to take tips and having worked as a receptionist, cleaner, office monkey and shop assistant for minimum wage, I would have been fired in any of those positions had I accepted tips from customers.