Tipping etiquette and Jamaica.

[Blake]

Blake,

It seems that you are not understanding the concept that the service charge IS part of the cost of the meal.

Except that a service charge is added AFTER the meal, it is NOT part of the meal unless you consider gratuity part of the meal.

To call it a tax would be incredibly dishonest and is also against the law. It is NOT a tax or some strange/double dipping additional charge - it could have been added DIRECTLY into the item cost.

It's no more dishonest than saying it's part of the meal, at this point I think we need to break down what the food price goes towards:

1. Rent
2. Food costs
3. Employee overhead
4. Utilities, bills, etc.

But to add it into the food cost would not help the employees take home pay when times are busy.

Why wouldn't it help the employees take home pay? Are you saying that the restaurants would withhold it and pocket the money? Why are we playing games of transparency when it comes to the cost of running a business?

This simple procedure allows the employees to have a bit higher take home pay when times are good. In order to help the employees receive a little more benefit from the tourism industry, the service charge is calculated as a separate item. As pointed out, this allows all the employees to receive a bit more money than just their hourly wages when times are busy. Think of the shared service charge as a bonus to their hourly wages.

Can we call it what it is, a tourism tax? I don't necessarily see anything wrong with it, what I have issues with is the sugar coating that goes into it.

I'm all for paying the employees fairly and especially when times are busy; but the meals should be transparent and the restaurant owners should be the ones to shell out and the prices should reflect it.

As I mentioned in the other Service Charge thread that was posted earlier, "It is often speculated that the employees never see the service charge. You may even hear that from the employees themselves. But this is simply not true. If a business has a service charge, then the business can be fined and even closed should they do not share this with all their hourly employees. A server may say they never see the money, but they do see their percentage of that charge which is of course much smaller depending on the number of employees. For the example above, the server may feel they didnt get anything from it, because they never saw 90% of the charge. But they did receive their percentage on their paycheck." Simply put, not every employee is privy to how the restaurant's accounting operates, nor is it in their immediate interest to let you know the exact details.

So are we in agreement that the servers need to be honest and say that they do see a portion of it?

Why was the manager lying to the other person about what the service charge is for?

It's in their immediate interest to be honest with the customers instead of lying through their teeth.

You ask why the food prices are on par with the US prices. That is because Jamaica is a small developing island nation and needs to import the vast majority of what is served. Take into account that fuel prices are way more expensive in Jamaica (gas is about us$6 a gallon, what did you pay this weekend?) and electric charges are higher than the US, and imported items are higher in cost than in the US

I understand that Jamaica is a small developing island and needs to import the majority of items. That said if it isn't sustainable then perhaps they need to reevaluate the business model, countries(the US included) need to try to not rely on imports to sustain the entire nation.

Fuel prices here are $4-5 a gallon, electricity is extremely expensive(Over $1,000 a month for each of my stores in utilities), rent is Ridiculous(up to $200 a square foot), regulations cost a lot to comply with, and shipping can kill our profit margin.

We also tend to have higher employee costs(I start my people at $10-$20 an hour), imported items are still prohibitively expensive, and we tend to have a LOT of taxes.

If you want to say that food prices in Jamaica are the same yet don't include labor(given that this is what the service charge is for) I have a hard time believing that the food costs reflect purely import costs(especially for the places using local seafood) alone.

All of what you described every US business deals with on a daily basis, yet we don't have service charges.

You are not in the USA but Jamaica, so you have to readjust your thinking to take into account the differences between a major world power with vast natural resources and a small developing island nation.

I will adjust my thinking when I'm actually in Jamaica, currently I AM in the USA. That doesn't mean I can't question why there is a service charge above and beyond the cost of the food+gratuity.
Transparency is key if you want to build good will, the service charge should be part of the food and if you want to keep gratuity go ahead(even though it doesn't foster better service).

Many restaurants choose to not have a service charge and raise their menu prices to reflect this. If the government dis-allowed service charges tomorrow, the menu item costs would go up at places that have a service charge. You would pay the same either way. But at present, for places that do have a service charge, this simple accounting breakdown allows the employees to directly benefit from tourism when times are busy. And of course you will pay GCT on the food bill - both the menu item cost AND the service charge (if applicable) are the cost of the meal.

I would prefer that there be no service charges and allow the restaurants to compete on an even foot.

I'm of the opinion that a service charge does Jamaicans a disservice because when foreigners sit down they're not going to have this entire forum's worth of perspective, most people will see a service charge and assume(right or wrong) that it IS the gratuity, especially on meals that are more expensive.

When you Mandate a fee to pay the employees it isn't optional and it doesn't foster good will, it leaves a bad taste in a lot of people's mouths, especially when the managers don't even know how to explain the service charge!