Someone sent me this the other day. They want to propose legislation next year in SD to end ‘involuntary’ tip-outs to support staff. Many people don’t realize that servers only get paid $2.13 an hour in SD, they depend on their tips. Many restaurants require (especially national franchises) that the servers tip out support staff (so the restaurants can avoid paying them). It can be upwards of 20% of your tips. When I worked full-time as a server a couple of years ago I figured I tipped out (my tips) about $4,500 a year. This is money I earned. The fact of it is, when you tell customers about it, it infuriates them that not only that we are paid a low wage, but we have to give our tips away. Support the movement END tip share in SD!

If a bill comes forward next year in Pierre, I plan to testify.

11 Thoughts on “Stop the Server Tip-Out in SD!

  1. Alright I’ll bite. Explain how support staff get paid? I assumed I was paying the barback or plate pickup person when I tipped.

    Personally I think the entire tip process is outdated. Pay your staff a decent wage and price it in the product. I pay decent tips, I think. 15% usually but some say thats now not enough. And with the attitude of our new young adults, I would hate to have to depend on tips to make a living.

  2. rufusx on April 5, 2014 at 7:41 pm said:

    First – be sure to vote the SD minimum wage hike into place. That will boost server “base” pay to $4.25. Then we can work on the tip-pay out portion in next year’s legislature.

  3. rufusx on April 5, 2014 at 7:43 pm said:

    Should have said – also be sure to elect Dem. state legislators – THEN we can……

  4. OldSlewFoot on April 6, 2014 at 10:13 am said:

    Friend said her friend’s daughter always wanted to work at the Milkyway as a summer job. Got her wish. Got paid that $2.13/hr. I guess they have a tip jar out by the window. Who tips at one of those places? Now I will when I go there.

  5. Dan Daily on April 6, 2014 at 10:55 am said:

    Every job should be minimum wage. The $2.13 cop out shouldn’t exist. It’s actually a hindrance in that it makes you an employee when you could be an Independent contractor. As a contractor, you have write offs (mileage to work, uniform, office supplies, 20% of rent or mortgage, etc.). Your better off declining the $2.13 so you can live well but look poor. A payout to support staff would be a deductable business expense. Your $4,500 is minus from the top of your income and you’d save at least $1,000 paid out for taxes. If you’re not an employee, it’s up to you to report tips. They can’t be traced if you’re a contractor and not a server. Therefore, zero. You’d have to have other income because you can’t deduct from zero so let’s write each other checks from our LLC’s. You have 3 years at no taxes owed until the IRS says you must show profit. However, get an assumed name or another LLC and start the process all over again.

    It’s complex but not complicated. Fundamentally, it’s Huether financial reporting.

  6. PrairieLady on April 6, 2014 at 12:08 pm said:

    In the early 80’s I supported myself as a bartender for a number of years. My pay was $10/hr plus tips.
    When the nonsense of the min. wage and declaring tips as part of it came into being, I left.
    Last week I talked to several waitresses and was appalled to find the min. was $2.17 because I don’t think that has changed since the 80’s. We did not have to share tips with the bus people, cooks etc. because they were all paid a decent wage.
    South Dakota is one of the lowest tipping states in the US.
    Usually when I go out, which is rare, I tip 20% depending on service. One of the reason I do not go out much is I believe I not only need to pay for the meal, I need to tip too. Unfortunately, I know a number of people who tip very little because they believe the owners need to pay a decent wage, which is true, but since they don’t we need to help support our local service force.

  7. Doug on April 6, 2014 at 5:50 pm said:

    Or Scott could just get a real job. How old are you again Scott 45? You understand these jobs are meant for high school and college kids

  8. l3wis on April 6, 2014 at 6:54 pm said:

    FYI, Doug, I only work a couple nights a week serving tables for extra revenue, I work in the printing industry during the day. As for your College Kids and HS comment, that is not the truth. I would guess about 40% of servers in this town are over the age of 35. That isn’t a bad thing, because at that age, they actually know what they are doing.

  9. So Doug, are you OK with college kids and high schoolers getting $2.13 an hour?

    At 2 bucks an hour you’re basically teaching people to say screw work. Might as well sit on your ass and sign up for some handouts.

    No one tips at the Milky Way and I’m certain the owner knows that as well. Might as well call it an unpaid internship. I won’t be patronizing the Milky Way any more.

  10. Dan Daily on April 6, 2014 at 9:03 pm said:

    Nothing wrong with waiters. They make outstanding income at Minervas, Foleys, Crawfords, etc.. They’re professional and tipped well because upper range yet still middle income types appreciate the attention to making their evening memorable. I’d work in these places before I’d ever consider a cubicle farm taking calls from people crying and begging you to reduce the 30 percent interest so they can become solvent.

  11. Taxpayer-Voter on April 7, 2014 at 6:04 am said:

    Could it be Doug is one of those employers paying $2.13 hr in 2014?!?

    Voters, we will have an opportunity to change this in November. Be there!

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