A party of 30 hungry guests enters a local restaurant to be served. Two servers are assigned to this party, putting their sweat and hard work into making sure everything goes smoothly, refilling drinks and pre-bussing heavy dishes. As the large party leaves, the servers hope that they have been rewarded for their work. However, once they open that black server book, they see all that hard work was for nothing because the tip line reads zero dollars.

As of Jan. 1, 2014, the IRS started treating gratuity as a service charge, and automatic gratuity is no longer in place for large parties.


“Tips normally will bring wages well over $10 an hour for servers,” said Bob Westbrook, a member of the East Texas Restaurant Association.

Restaurants were faced with two choices; to cut out automatic gratuity on large parties completely or make it a service charge. At the end of the night, the restaurant will put it on their paycheck and it will become taxable.

“It’s not fair for the servers because there’s always a chance for them not to be tipped,” said Westbrook.

According to The Wall Street Journal, most restaurants will discontinue the practice of automatic gratuity on large parties.

Sherri Peralta is currently working at the Diner in Tyler and has been in the restaurant business for 25 years. Back in 1988, she was making $2.01 per hour and has only got a .12-cent raise since.

“People need to be more aware of how they treat their server,” said Peralta.

According to the Women’s Media Center, since 1991, servers have been getting $2.13 per hour and statistically, more than 70 percent of servers today are women. Servers that work off tips are three times for likely to live in poverty than the rate of the general workforce.

“As college students, we’re just trying to use this as a stepping stone . . . we’re having to work harder and take out extra time from studying,” said Candice Booker, radiology major at TJC.


Westbrook explained that students especially need flexible hours being in school and that is the one thing that the restaurant business can offer.

“If it wasn’t for the servers, the restaurants wouldn’t be making any money at all,” said Destiny Osteen, nuclear pharmacy major at TJC.

The servers basically run the area like their own personal business. They get the clientele or “regulars” and give the restaurant business.

“I feel as though the only people who are going to benefit from the removal of automatic gratuity are people who do not tip in the first place. People who do tip did not mind paying the 18 percent because they usually do tip even if it is not that high or low,” said Megan Mitchell, business administration major at TJC.

Westbrook believes this will have a negative impact on the restaurant industry. It increases pressure on the restaurant to ensure guest experience. The server used to be ensured the 18 percent gratuity on large parties to reward them for taking care of the guests and now what they make is completely up to the guest.

“If you can’t afford to tip your server do not go out to eat,” said Mitchell.





  1. This article states that if the tip is treated as a service charge that “At the end of the night, the restaurant will put it on their paycheck and it will become taxable.” This infers that tips in general are not taxable. As a long time server and general all around restaurant person, I have to say that this is not at all true. Tips have always been taxable and servers and other tipped personnel have always been told that it is the law to claim 100% of all tips received. Up until this new tax law it has been up to the individual employee to claim their taxes.

  2. This is something that needs to be reiterated constantly. Being a full time student and juggling a job is hard enough. It is revolting the lack of understanding that when you go out to eat those who are serving are the ones providing you the food.


Please enter your comment!
Please enter your name here