[Mich Patriot]

Okay, but if they are making a fortune, then their daily sales must be pretty significant, so the % deal would pay them well also. The information we are missing is whether or not the employer is adding the 20% to the server’s W-2. If so (and I would assume the IRS would require it), then the 20% just became more like 13% or less.

[miss marmelstein]

In NYC, some of the tips have skyrocketed to 40%. I’m not joking.

[a fool in paradise]

Because it corrects the issue of waiters underreporting their earnings to the IRS?

[Swordmaker]

Okay, but if they are making a fortune, then their daily sales must be pretty significant, so the % deal would pay them well also. The information we are missing is whether or not the employer is adding the 20% to the server’s W-2. If so (and I would assume the IRS would require it), then the 20% just became more like 13% or less.

They would have to. If the employer is cutting a paycheck, the w-2 would reflect the total paid. My concern here is that the server will be pushing the high-end items on the menu, really pushing alcohol (high-ticket items), to add to the total on the bill. Yes, he or she will be working to maximize restaurant profits, but that means the patrons will be experiencing an pushy, more invasive, dining experience than what tipping would normally provide.