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ARTICLE · 19 AUGUST 2013

Automatic Tips May Be Off The Tables

One major restaurant chain is in the process of eliminating automatic gratuities from large groups, as an IRS ruling will treat automatic gratuities as wages, leading to the possibility of higher payroll taxes for restaurants.

United StatesMedia, Telecoms, IT, Entertainment

Carolyn Richmond was quoted in the Orlando Sentinel article "Automatic Tips May be Off the Tables." While the full text can be found in the August 15, 2013, issue of Orlando Sentinel, a synopsis is noted below. 

One major restaurant chain is in the process of eliminating automatic gratuities from large groups, as an IRS ruling will treat automatic gratuities as wages, leading to the possibility of higher payroll taxes for restaurants. 

"I think restaurateurs and business are just throwing up their hands and saying 'We can't...afford the risks,'" said Carolyn Richmond, a noted authority on hospitality law.

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