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- BUSINESS, Page 54Leaving TipsHere comes the service charge
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- If customers walk out of Del Frisco's Steak House in New
- Orleans without leaving a tip, none of the waiters even raise an
- eyebrow. Nor do they at Cafe Provencal in Evanston, Ill., or
- Michael's in Santa Monica, Calif. Tipping is no longer expected at
- these establishments, but that does not mean the service is free.
- They are among a small but growing number of U.S. restaurants that
- are replacing the tipping system with a service charge, typically
- 15% to 18%.
-
- The mandatory charge, which is widely used in Europe, is
- appealing to American restaurateurs, partly because it simplifies
- their bookkeeping for income tax purposes. Yet some customers have
- turned up their noses at the idea. "The quarrel I have with fixed
- charges is that when you go to a restaurant where the service is
- bad, you don't have a choice," said Los Angeles lawyer Maynard
- Davis, who frequently conducts business at restaurants.
-
- In a survey conducted for TIME last week by Yankelovich Clancy
- Shulman, 77% of those polled said they oppose a mandatory service
- charge. One reason may be that the typical service charge is larger
- than the tip that most customers generally leave. When diners were
- asked how much they usually tip, the average came to 14%. Even so,
- some customers welcome the change. Says Michael Fawcett, manager
- of the Rattlesnake Club in Denver: "People really like it, because
- they don't have to figure out the check anymore."
-
- The nascent service-charge movement began with Congress, which
- started in 1982 to clamp down on one of the country's biggest tax
- dodges: the failure to report billions of dollars in tips. Laws
- now require restaurateurs to monitor waiters' tips for the Internal
- Revenue Service, as well as pay federal unemployment and Social
- Security taxes on such income. "It's a lot of extra work. We have
- to spend time keeping records because the Government doesn't want
- to," said Don O'Neill, the owner of the Spring House restaurant in
- Pittsford, N.Y.
-
- Under a tipping system, waiters receive a minimum of $2.01 an
- hour plus their individual gratuities. A service charge, by
- contrast, is collected as part of restaurant revenue and is then
- paid out to waiters on an hourly basis or under an incentive plan
- based on how much food they sell. At Del Frisco's in New Orleans,
- waiters receive $8 an hour or 10% of weekly total sales, whichever
- is greater.
-
- While many waiters complain that the service charge robs them
- of the performance-based pay they deserve, supporters of the policy
- feel that a salary elevates servers to a more professional status.
- "Our waiters have higher self-esteem, since they are no longer
- dependent on handouts from persons to whom they must be
- obsequious," says Barry Wine, owner of Manhattan's ultrapricey
- Quilted Giraffe, where there is a service charge. But in the
- competitive restaurant business, few owners are likely to pick up
- a hot potato like the service charge until they are sure their
- rivals are going to go along.