Management taking a portion of tips is a violation of federal labor law. Find a labor lawyer and hand out his business cards to the staff. Class Action suits are a beautiful thing

I remember asking my father why he always gave a cash tip to servers. He said, "so I know THEY get it, not the management". After working as a server myself, I fully understood what he meant. That's why I always plan to leave my server cash tips, and about 95% of the time, I hand it directly to them. If they want to share with the buspeople and dishwashing staff, I leave that up to them.

The business taking 50% off of the tip might actually be illegal, because they are not allowed to take the tip from employees.

As a former server/bartender, I always tip in cash. Even if I choose to pay my tab/bill with a card, I make sure to have enough cash for my tip before I go out to an establishment. I'm damn near 60 now, so I wouldn't be working for any of the aforementioned restaurants, but I won't forget the years of my youth spent doing so. Bypass all the shenanigans and tip in cash only, is my simple solution to this conundrum. If you're going out to eat, swing by an ATM for cash on your way there ... unless you're just too lazy to care about it. Of course, it's just my opinion. I could be wrong. ✌🏼

29 U.S.C. 531 is pretty strict about employees retaining any and all tips. Penalties are delineated in 29 U.S.C. 578. By federal law, what the sushi place is doing is illegal, and punishable by almost $1300 per violation. That would include both the 50% garnishment and the transaction fees as separate violations, accrued at a minimum of daily for the period of the policy.

It is also illegal for the sushi restaurant to disburse tips to someone that isn't DIRECTLY assisting the server with their tasks. Advise the servers there to get a lawyer.

One more thing to add is that the “delivery fees” on orders for delivery don’t count towards a tip to the drivers. Not sure if it’s like this at all places, but I worked at a pizza place that had a $4 “delivery charge”. Lots of customers assumed that was a tip for a driver; it wasn’t.

You are missing another problem with the Sonic system. It asks you to tip your server BEFORE you have received any service or had a chance to see if it was good.

I live in Denmark where there are a minimum pay and so on... but in general I'm not against tipping, but the last time I was in the USA I used a delivery app that wanted me to tip in advance, that is somthing I don't do... I happily tip if the service is good. But bad service no tip, great service great tip.

I've worked in service roles as waitress and bar. If someone tried to get half my tips, I'd quit. I did quit 1 job over it. Then I got a better job.

No tips better mean a REALLY good hourly wage. Half tips or bad wages and it's time to find another job. Problem solved.

back in the dark ages--1979-1984, I worked at a sit down restaurant. We were paid 1.78 an hour because we got tips. Now, our tips as a waiter or bartender could be up to 400 bucks a night. The owner had a very strict policy that he enforced personally that made the tips 100% the employee's. But he also encouraged us to remember our busboys and kitchen staff--who were paid well over min wage for the time (2.95 an hour). We were happy to do so. He sold the place to a large company and they immediately went to a "pooled tip" policy. We all walked out and the place closed within a month because in a smaller town, word gets around. But it seems that this kind of theft from employees is nothing new.

This feels like investigative journalism as it should be. Nice work! And I tip cash whenever I can for these reasons.

Sonic in our area (Nashville and surrounding) didn't have the ability to add a tip to a card for the longest time. It's like they don't want anyone to tip their servers, knowing that most people don't have cash. The other problem I have with Sonic is that I don't know how much to tip someone for just walking to my car with food. Twenty percent is too much for just bringing a tray of food and never seeing them again. It isn't reasonable at a full restaurant, assuming my server sucks and only visits me once. Whereas it IS if they visit me the proper amount and make sure I have a good experience. Tipping is tough no matter what, but servers shouldn't be punished for my opinion. I always leave 20 percent at a sit down restaurant, I leave a couple bucks at Sonic, and I leave absolutely nothing in the tip jars at Baskin Robbins and Subway. I still don't know if I'm doing it right, but it's how I feel about it.

I've started paying with a card and tipping with cash so the server gets the full tip and the taxman stays out of their pockets

We haven't been to a sit down restaurant after the manager asked why we didn't tip. #1, the server spent more time on her phone than taking care of her section and #2 because you expect me to tip anyway. Pay your staff what they are worth to you.

When i go out to eat, I may put the food on my DC but i always give the server cash for the tip.

In some states it's illegal for the house to take any portion of employees tips. We almost always tip with cash. That way we know it went to the server. In some restaurants they share tips with busboys and bartenders.

It's not just the tips, it's also taxes. When I waitressed at Denny's I was taxed a percentage of my sales and also a percentage of credit card tips out of minimum wage check. It meant I got a $275 paycheck every 2 weeks, so I lived on my tips. This was 25 years ago, but for example my rent was $650.

Tip for sit down service. The thing I do not like is tip sharing. While some will bust their butt to provide great service and there is some that thinks they will get tips even if they are lazy.

The best thing I can say is to familiarize yourself with Fact Sheet 15. It will go over the federal laws on tipping. It will really open peoples eyes to what places do that is illegal and what is not.

The Sonic's in my area have the "now hiring" signs out too; but they mention making slightly above minimum wage, no indication you'd be working for tips if hired. Perhaps they make the distinction when they hire the carhop vs a cook or "inside staff". Though when they are that short staffed, even the cooks or drive-through person is going to be walking out food. My take on the entire situation, if you don't have a sit-down service, it shouldn't be for tips in the first place. (See comparison below for other fast food joints that queue you up away from the window...) Frankly, if walking the food out of a fast food restaurant is a tipping thing now; then any fast food that makes you get out of the window (to get good "times" metric for their regional manager) I would now need to tip the person walking out the food. I'm looking at McDonald's in particular, they seem insistent at rarely letting you wait for your food at the window. If you're making me wait in another line, then that "extra service" of walking the food out is on the business, not me.

James, you haven't popped up on my feed for many months. So this morning I thought, I'll go see James Butler, get caught up on his videos, there must be a bunch! Lo & behold, there was only one video under Latest filter that appeared unwatched! I haven't checked under Live yet, but that seems strange. I hope you're okay & all is well! I liked this video, but it's your customer/job/employee stories I really love. That's what I came looking for...

I worked at Perkins almost 18 years ago and one guy could memorize every order given to him. It was crazy and I could never

When we did tip, we tipped the server directly, on the down low.

I leave tips if I can afford it. I’m a broke asshole. Which is a legally distinct form of asshole. I explained to someone outside of America (from India) how tipping works. He deadpan asked me “Does America incorporate sex appeal into everything American including business?” We laughed very hard at the hard truth.

One of the things I liked about living in Denmark was the no tipping culture. The price is the price and the servers are being paid. In 2 years living there and several vacations I only had one issue. Paying with a card at a restaurant their credit card reader said my Discover card wasn't working. So I used another credit card. Later that night I got a notification from Discover that my payment went through. The next day I went back to the restaurant, explained what happened and showed them the duplicate charges on two different credit cards. They just gave me cash, which I used to pay for parking for the rest of the trip. I'm sure some people will say it was a scam. It wasn't. They bring the credit card machine out to the table, so I saw the "unable to process" message on the machine.

I'm from Utah, been going to sonic since I started driving (23+ years ago) and I never knew I was supposed to tip nor did 4 other people I've asked I grew up with. Sonic falls into the fast food part of dining for us so just like McDonald's, Wendy's, arbys, taco bell, etc. It was expected everyone was making minimum wage + for minimal service (just bringing food to a table/car isn't tipable service in our book). I remember when the screens first came out and I don't remember tips being asked for. It just popped up around the time EVERYONE started asking for tips. Tipping (for food) is for when I go in, sit down, order a drink, order a meal, it's brought to me correctly with any options/minor changes I asked for being right, they keep my drink from running dry while I eat and I get a bill. If I can or do drive away with my meal untouched then I'm not giving a tip.

My dad worked at a pizza shop back in the 90's after getting out of a Renewal Center and he said that as long as they pay minimum wage. They can take up to 50% legally. So he said his boss or their wife would call the business that he would deliver to and they would ask them what tip they gave" Hey say you gave me a $5.00 tip instead of a $20 one". And most of them went along with it.

Love the format, James. I'd like to see more of this style of video. It's kind of a mini-documentary.

I don't like having spare change going around in my pocket, so I always tip to the next paper bill. One time I ordered at Burger King and had to pay 17,99, so I told the cashier to keep the change as tip. They refused, explaining to me that Burger King pockets the money and doesn't pay their employees the tip while also not providing a living wage.

There is a local chain - less than two dozen stores - that makes a Meatball Parmesan sub I crave. I always tip of course. At the location I used to live near any time someone put money in the tip jar the person behind the register rang a bell. This wasn't some dinky bell, think the shell from the fire alarm in a school, wacked with a hammer. You couldn't miss it if you were in the store. In particular, the person preparing the food heard it! I always wondered it it helped them get tips (and whether them knowing about the tip got me any extra meatballs). Sadly, the store where I live now doesn't do that, but the food is the same.

Taking half the tip is terrible but charging the server the credit card cost is so beyond terrible!!! You are the exception (sadly) for paying for your employees fairly.

Putting this as either/or does not work, but the Sonic is the worst of the two if management does not make allowances for the carhop due to their lack of maintenance - particularly if they are not being paid the same hourly rate as the rest of the crew. In the case of the sushi place - IF and ONLY IF they were paying a living wage instead of minimum wage (or worse, the 50% of min wage for server exemption) I could tolerate a tipshare layout. The only other possible tip share layout is communal where the cooks/porters/bussers get a slice. I tip for sit down - 20% average, 30% excellent and I have given a dollar to make a point on poor service. I do not tip fastfood/barista counter help.

I tip if I feel they earned it. Me going to a place of business is me supporting the business so they can stay open to be able to give people a job. Me tipping the server is me supporting the server for doing a good job and helping them out even if I can't afford to give much. I also know there is usually no way of knowing how much of the tip goes to the employee vs how much goes to the server.

I was wondering where you went, glad to see you back.

In some places tips just save the boss money anyway. I saw something about a tipping law (US, unknown region) where you must get minimum wage, but they could reduce your wages by your tips down to $2 per hour, averaged across the month. So you need to be tipped about $1,600 per month before you see a dime.

I always try to tip in cash. Take out all the middle men. What I don't like is when they take the tip mandatory. In that case most service sucks. They don't have to work for the tip.

The advice about not frequenting places that require tips is something I've taken to heart. If a drive thru is begging for tips i stop going there. I understand tipping at a sit down restaurant, a drive thru ... No. The one exception being the local sushi drive thru.

I once had to order food via an app in a particular restaurant, the only interaction I had with the staff was when they briefly dropped the food at the table. We barely said five words to each other, yet that app was suggesting I tip the wait staff… and yeah it was asking before I was even served. Absolutely not tipping for that. It’s worth noting that in Australia wait staff are paid well over $20/hr and you generally only tip for great service. Delivering a plate to a table is not great service.

That sounds like wage theft to me.

Two men and truck in auburn al was amazing abt this. Paid us decent, offered in incentive per hour if we didn’t break anything, and let us keep every dollar worth of tips( which were pretty regularly hundreds of dollars.) If a customer paid in cash and overpaid by $3, we’d see that $3 split between the crew on our next check. Really loved that job.

When I tip I leave cash and ignore or bypass all electronic tip systems. That way the greedy corporations can't get half. Well in theory. If I'm wrong well I'm trying.

I got a Mr D delivery yesterday, I always tip the drivers 15% minimum. I'm always so humbled by how grateful they are, thanking me and normally "may God bless you" So many in our country don't tip, even the people who can afford it. Those drivers are out on pokey scooters, in rain, thunder, hail and lightning, on bad roads riddled with potholes, traffic lights out due to rolling blackouts, dangerous drivers, hijackers and thieves who will knock them off their bike and steal it. At restuarants now, we ask the server if they get their tips, if they don't we pay them seperately in cash.

I’ve got a sister who used to work for a small local restaurant working as a cashier and the only server. When she started she was told she could take tips but they had to go to the tipping jar and the tipping jar was split evenly between all the employees. I always thought she was cheated as the rest of the employees were family and none of them had much if any interaction with customers. So she (and I’m making a huge assumption but not a far stretched one) likely brought in 60-70% of tips If not more. Especially as she speaks fluent Spanish and we have a lot of immigrants that liked going there

I haven't looked at the FLSA for a long time but I bet it addresses some of these issues. If it does the employees can have the employer on the hook for a lot more than tip money.

I try my best to tip cash @20%+ for severers that earn it. Ive noticed since covid staffing shortages are a big concern nearly everywhere. It was becoming an occasional issue prior tho. Also lately ive noticed higher % tip requested at particular eateries where 18% is at the low end and 30% is full tip on credit sales.

I think you should work for a flat pay of minimum wage, no pay cut no matter the tip, and the tips are bonus. A reward for excellent service, rather than a requirement to live. Servers are your face of the business. They are the way the public views your restaurant. The server will be more enthusiastic and more tolerant of bad behavior of guests when they are reqarded for good service rather than punished for basic service. When you pay people well, they are more willing to be flexible for the business, and less likely to leave you understaffed. My tips should be rewards to my server and if say a portion went to the people that cooked the food too that'd be fine as long as my tips are not also cut out of the pay for my server

Prior to Covid, I tried to always tip in cash. During covid putting it on the card made more sense. Now that tipping is ridiculously out of control, I'm wondering how many restaurants are keeping large percentages of the tips. I lnow several are demanding that tips get split with kitchen staff - which isn't right. I'm going to make an effort to tip cash. Except now, caring for my elderly parents, most meals are ordered for carryout and as a former server myself, I truly resent tipping even 15% for carryout service. Like every other of aspect of life these days, its all out of control and damned if I can come up with a solution. All restaurants should have to post ar the front door any percentage of any tip that does not go to the server.

The whole tipping thing is getting out of control. Now McDonald’s, Arby’s and Dairy Queen employees think they deserve tips, this has caused me to stop tipping and tipping good when I do tip!! Look at the card machine the first thing it ask is about a tip.

Knowledge is half the battle, because knowing what's really going on lets you choose your battles.

Honestly, a problem I've seen arise time and time again is that owners and management don't often seem to feel the need to hold themselves to the same level of standards they hold their employees to. Especially in terms of theft. As long as they find a clever workaround to have it not be a physical action to steal, they justify it all day long. Dishonest policy, dishonest bookwork, dishonest recording of hours worked, and completely hypocritical enforcement of their own rules and policies to "get better efficiency" from their employees.

I spoke to a waitress about the tipping on the card verses cash. She said she preferred cash. She explained that any tip received through the card was considered a part of their wages and TAXED accordingly.

The video production quality of this video is outstanding, James. Did you hire a camera operator and editor? As for the question in the video, I would not want to work in any service job that required me to receive a tip. I would rather bust my butt to elevate my skill set and get a better paying job else where.

The most important take away from this that I did not know is to tip your carhops; thanks James!

My favorite saying on this topic has always been: "If you can't afford a tip, you can't afford the service

I like the video so far, but around 5m30s the volume increased pretty dramatically. If that's something that the editors care about but don't know how to fix, software like Audacity is free and able to fix that.

Awesome video James!👍👍👍

Tipping is a huge problem with where I decide to eat. If a restaurant adds an automatic tip to my bill, I will never eat there again. Pay your employees better so that I don’t have to. My job does not require a tip and when I’ve been offered one I respectfully decline. Giving good service is my job and I do not expect a tip. Waiters and waitresses should do the same and their employers should agree and pay them a fair wage.

Exceptional food service businesses have no squabbling over tips. Train your employees to succeed, set them up for success, provide excellent food, garner a good employee culture

tipping is out of contol

Your 'on location" reporting camera work was great in this video. 👍🙂

Just watched this and saw some D&D books and a mini on your shelf. Very cool, already like you and your content. That's just a bonus, playing from Dec 78.

Very interesting! Thank you for sharing this!

GOD BLESS YOU FOR SHINNING SOME LIGHT ON TIPS . MY MOM WORKED FOR TIPS WHEN I WAS YOUNG AND SHE MADE SURE we knew to tip good.

Honestly did not know that about Sonic, but then only go there maybe 2 times a year. We always tip cash. If tip is on a card they have to pay taxes on it. Cash is King! A lot more to say but not enough space. Great job James!! Sharing…

I only started to see the tip option this year at Sonic. I didn't think the job was really tip worthy but always tipped because I know tipped jobs get a lower minimum wage. Thanks for the info on the tip tradition with car hops. I totally agree that the broken displays are at the car hops expense. What you can do in that circumstance is to have the server run the card when they deliver the food and have them enter the tip then. Your point is still valid, the owners neglect on maintenance is coming out of the servers pocket but there is way of helping in that particular scenario. Which is worse? The Sushi restaurant is worse. The sushi owners actions are intentional while the Sonic owners may be neglect. 1) The tips are understood in the customers mind given directly to the server out of gratitude. If the customer knew that half the tip was going to the owner they would likely tip less, not at all or stop going to the restaurant. 2) The processing fees (for the whole meal?) are a business expense and should be covered by the owner. Being able to purchase through plastic increases the number of customers and arguably the amount purchased. The owner is not losing money on a processing fee, they are gaining a customer. To pass along that expense is a jackass move.

Long time to see! Love the work you do here amigo.

My wife worked as a car hop on skates at a Sonic in Tennessee in the early 2000s. She described it as an incredibly difficult but fun job for a young kid.

I have been a pizza delivery driver and a doordash driver. Now that i have a much better job, i tip well. If the server is exceptionally good i may even "tip the bill". (Leave a $25 tip on a $22.59 bill) but i normally tip at least 30%

I talked to a delivery guy, he had made good time getting to me. He said we remember people who tip and try to get to them quickly.

Any mediocre lawyer even knows, employees can't sign their rights, PERIOD

Pay a decent wage and only tip if you want to reward for extra good service. The rest of the world manages that way and business' stays in business and they make good profits.🇦🇺💜

You make your staff happy -> your staff makes customers happy -> happy customer recoments you and comes back -> you are happy :) I assure you it works.

Great timing!

Amen! Retired/disabled contractor here...We have a City council member in NoCal who owns a chain of "Mexican" ethinic super markets and is currently indicted for hiring illegals and in some cases, not paying them and threatening to have them deported, and being illegally(IMO) representing our district while living in another district. But hey, the Sacramento City Mayor was "OK" with it. Now, the are federal charges and the Mayor is speaking a different tune...Look up "Loloee indicted" Fuck, I hate Calif! NC here I(we) come!

Federal min wage is 7.25. That wage doesn't matter if you are tipped or not. If you work 40 hours and your gross pay isn't 290, said company is breaking at least federal law. In the sushi restaurants case, "the FLSA prohibits employers from keeping any portion of employees' tips for any purpose, whether directly or through a tip pool", making the restaurant liable to lawsuit from employees for wage theft and the government for breaking the law.

Fun fact: tips are, by federal law, the wages of the employee who received them. For the company to take anything out of the tip jar for themselves, rather than their employees, is wage theft. Knowing this, I would take the job at the sushi place that takes half of their employee's tips, so that I could sue them for backpay when they take my tip money.

As a mother of 2 daughters who worked as waitresses I always tip in cash. they also worked in the delivery for food places that make pizza at a really cheap price that's all I'm going to say about that. thank you for making this video and explaining this to everyone and shame on those companies who are robbing those hard-working ladies And gentlemen

Make sure u tip any one that is doin the cooking an the delivery drivers they deserve it the most

In NC, servers who work for tips can be paid as low as $2.13 an hour by the employer. But, most Sonics pay full minimum wage of $7.25 or higher. Their staff are more like a McDonald's employee. Tipping is very much optional there.

I have two young adults in my home who have been looking for work for a year. They do all the leg work, go to interviews, etc. and get ghosted. I think companies have decided to cut down on labor costs and are putting those big banners up so people who remember what drive through service used to be don't get impatient. My oldest went to interview at McDonald's twice and the first time they were too busy. When she came back the second time, the manager told her he was fully staffed.

In some states minimum wage for a server is different than minimum wage for people in non-tipping workplaces. It is assumed you will receive a certain amount in tips to make up the wage difference. For example, servers in Idaho can be paid less than $3 per hour by their employer. This means that if your state includes your profession in minimum wage loopholes like in Idaho, and you have an employer who deprives you of your tips in any way (which is not uncommon at all), you are actively being screwed by both the state and your employer with fairly little recourse as taking action will get you fired and possibly even blackballed from other employers within the industry. I have learned to rethink the “nobody here wants to work anymore” idea that has been circulating this last few years and consider the possibility that it might be more like “nobody wants to work HERE anymore.”

My local Sonic franchise still allows car hops to use skates, but they have to be your skates, and the car hop has to sign a (probably illegal and unenforceable) waiver of limitation of liability for injury. The car hops at my local Sonic franchise also pays the he car hops the same wage as the kitchen and drive-thru staff, and before the recent outside PoS upgrades didn't allow typing. Now the car hops are required to spilt their tips with all non-management workers on their shift.

As a low man on the totem pole I say Thank You for showing the touch screen not working. I don’t work there, but yes, have gotten aggravated showing management broken things that don’t get addressed. Put their nose in it.

Oh damn - I never knew this about Sonic when I visited US, just thought that tipping was for sit down bars and restaurants or door deliveries, but not fast-food :(

Just noticed the magic decks in the background. Hell yeah brother!

As other folks have mentioned, management taking part of the tips is typically a violation of federal and/or many state labor laws. However, on top of that, IMHO, it is actually *dishonest to the customer* and could be argued to be *actual fraud.* When I, as a customer, leave a tip, I do so to compensate _the server_ for the work they have done, based on my evaluation of their work. _Not the management,_ the server. That is what "tips" are pretty much always understood to be. Therefore, if I leave a *tip,* which is explicitly *money I that intended to give to the server,* but management does _not_ give that money to the server but instead keeps it for themselves, then they are *stealing my money that I intended to go to someone else, without even telling me.* I will never patronize any business that I discover does this sort of practice, and if I discover it I will actually *demand all of that tip money back,* and then I will do my damnedest to make sure that they actually *go out of business,* in any way that I can, because they are not only screwing over their employees, they are actually *stealing from all of their customers,* too.

I still believe that only by not tipping would bring change in the industry. It would incentivize workers to unionize and require basic wages. In that case tipping culture would scale back to 0-5 percentage. I still not responsible to any employees of any companies. The employer does. So I will pay for the services + max 5% if the server was extremely nice.

I will pay my bill with a credit card but always tip cash BECAUSE l was a waitress and nothing is more fun than seeing 5 percent of your tip going toward the service charge and than getting to pay the IRS for the full tip amount, even though you have to tip the busboy and the bartender, and in some places the kitchen staff, but they get cash and l have to pay taxes on the full tip. The whole system stinks. Then the boss will tell you to clock out BEFORE you do your sidework, which usually takes 30 minutes to an hour. And some places don't pay you any salary and darn it was hard to make a living without that 78 cents (in 1985) an hour and now a whopping $2.13 cents in Louisiana in 2023. Still while some people are very cheap, others are generous and l made a pretty good living while l was going to school. The whole system is wrong and as prices go up a lot of people are tipping less. I worked with an elderly waiter and if someone complained he would look them in the eye and say sir, l get paid 78 cents an hour and l don't get paid to think. RIP Bill Blackwell.

in many parts of the world if you attempt to tip a server its seen as an insult to the employer and the server. its the same as saying the employer doesn't pay you enough and your poor. but when it comes to tipping I think of the song 'waitress' by the band 'live'. the main verse is 'come on baby leave some change behind she was a bitch but I don't care everybody's good enough for some change'.

Just a point about Sonic. If you order via the app and then check in when you get to the parking spot, there isn't an option to tip. Couple this with the fact that Sonic encourages ordering via the app by offering app exclusive deals and all day half price drinks that you can only get if using the app. It creates an environment where a person who only uses the app may not know that the car hops work on tips. They may assume that the Sonic workers are similar to most other fast food workers. I know that all of the Sonic employees in my area all make at least minimum wage for their hourly. So, the tipping thing at Sonic isn't a big "to-do" around here.

Please put out another video when you get contacted by Sonic's Leagle team with a cease and disist order. This is a great video and I love that I got to see it before Sonic makes KZfaq, make you take it down.

Given the opportunity, I tip in cash always. IF the business knows about the tip, they have to report the income, and therefore, it's taxed. Cash tips allow the employee to 'forget' the tip, at the appropriate time. I've worked for tips and if the business gets involved the employee generally loses. Keep a reasonable amount of cash handy.

I avoid tipping, just won't go anywhere that tries to extorts me. You chose your position, I've chosen mine.

I work at a fast food restaurant that does pay me a livable wage for a 19/year old male. It’s a franchise and corporate doesn’t allow employees to take tips (but when a customer hands it over we accept). To answer your question, James, I think I’d rather take the job where 50% of my tips are stolen by management. It’s still more money in my pocket. I may get pisser very quickly and leave but I’d still rather that than an unlivable wage at sonic.

According to the Federal Department of Labor Fact Sheet #15, "Employers, Including Managers and Supervisors, May Not “Keep” Tips: Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees’ tips for any purpose, whether directly or through a tip pool. An employer may not require an employee to give their tips to the employer, a supervisor, or a manager, even where a tipped employee receives at least the federal minimum wage (currently $7.25) per hour in wages directly from the employer and the employer takes no tip credit." As for the credit card processing fees, there is no Federal law and most States do not have a law prohibiting the charging of tip employees the credit card processing fee. There are some exceptions such as California where it is illegal and the employer is required to pay the fee. Lastly, any tipped worker is required by law to end every shift with at least minimum wage per hour worked or the employer has to make up the difference. Federal law sets this at $7.25/hr and many States have laws that raises that to the State minimum.

Tipping before you eat your food is ridiculous, Domino's does it, a great deal of establishments that offer "carry out" expect tips on orders that are consumed outside of the business. Think about it, pay extra for potentially subpar food.

8:40 The question: "Which one would I work at?" Answer: any port in a storm.... Once you have a current job it is generally easier to find a new job.

As an Australian when I tip it is in cash for exactly these reasons. I have never seen any tips that were put on a credit card. However the hourly rate is enough to live on even on minimum wage job if you are happy with a modest and quiet life.