Raising gratuities again!

[NLH Arizona]

Not true. After I got the UBP as promo, I called and asked to have the gratuity removed. I like to tip pool waitstaff really well, especially when busy. I was told it can not be removed. It is the same with the UDP/SDP. Furthermore, a gratuity added to your bill for a single drink that can not be removed is mandatory and is only convenient for the service provider.

Hopefully this is true as I'm glad to see that NCL is getting smart by not allowing these to be removed. They should do the same thing with the DSC.

[fshagan]

P.S. That junior waiter's salary: $50 / MONTH! Yes, per MONTH. The rest of their income is derived from their share of the DSC (subject to minimum in their contract).

 

They do get paid very low amounts each month, but their pay also includes lodging and meals which figure into the equation. A lot of jobs may have this kind of arrangement, including military personnel, merchant marines, pastors, etc.

 

Past that point, NCL says the DSC is used to compensate, in some way, specific workers, and to provide amenities for the entire crew (such as health care, two crew parties a month, etc.) All of this is vague, and really, none of our business.

 

These posts show few of us know how tipping works in a restaurant. Everyone keeps repeating that they know the server gets the money. That's incorrect.

 

In California servers are paid at least the state minimum wage, and depending on the rules the restaurant is working under, the tips may be shared or not (often it is to the discretion of the server, but the restaurant can also be under restrictions by the IRS as to how tips are handled). In the restaurants I did bookkeeping for, the tips were cashed out each night (most appear on credit card slips now), and the servers had to fill out a form listing their tips in cash, on credit card slips, and how much and to whom they split the tips with each night. This is so the server can be taxed on the value of the tips they actually kept (and the bartender, busboy and drink server) at the end of the week.

 

This reporting of the tips received iis a requirement by the IRS. The amount of tips were then added to their gross salary, taxes calculated, and then removed from their salary (because they had already been cashed out each night).

 

So how many of you grill the server with something like "Before I give you one penny, I want to know exactly how much you share with the bartender and the busboy? If the amounts are not satisfactory, I'm going to give you less and I will search them out and give them a tip separately."

 

None of you do that. But that tip in the restaurant is exactly like the DSC. You have no idea how it is split up, if the restaurant allows the server to keep 100% of the tips, or has to split it, or if the split is up to the server, or if the tips are pooled and paid out at the end of the week due to a mandate by the IRS.

[Demonyte]

Would you feel better if they called it "service charge" instead?

 

I don't care what it is called, I'm just saying that as long as it is called "auto-gratuity" on the receipt, it is optional. If NCL chooses to call it something else in the future, that is a whole different ballgame.

 

For example in current promo's T&C, it's "gratuities & service charges" - the term "service charges" is nowhere else used in relation to bar service billing so that has nothing to do with auto-gratuities charged when paying by the drink.

 

Disclaimer: I have never removed auto-gratuities or adjusted DSC on any of my cruises.

Edited July 25, 2015 by Demonyte

[sjbdtz]

I do not go around suggesting anything. I only asked if it was a FACT that NCL has a requirement that all cash tips are required to be pooled, or that cash tips given when DSC is removed are somehow tracked down and required to be turned in, something that would seem nearly impossible to accomplish, and I am not the only one who thinks so.

 

You may believe that pooled cash tips would be a most "sensible" rule, but there is no evidence that this is in fact NCL's requirement. At least, no one has been able to supply any thus far.

 

I have never removed or adjusted DSC, probably never will. I do tip some additional cash to some people that I feel should be rewarded. But, if I learn that all cash tips must in fact be pooled per NCL, then I will no longer do this cash tipping. Why should I provide extra reward to those who are slackers? And if I were the employee, why would I bust my butt to provide stellar service if the "reward" for doing so does not go to me? Just one more reason why I do not believe these cash tips are pooled, regardless of what the passenger does with their DSC.

 

First: cash tips are only required to be handed-in IF the DSC is removed. Tips over & above are never questioned, so you can continue as you do without remorse.

 

Second: People who have worked on the ships have confirmed this is the protocol. I don't see any reason to disbelieve them, when it makes SO much sense anyway.

 

 

 

They do get paid very low amounts each month, but their pay also includes lodging and meals which figure into the equation. A lot of jobs may have this kind of arrangement, including military personnel, merchant marines, pastors, etc.

 

Past that point, NCL says the DSC is used to compensate, in some way, specific workers, and to provide amenities for the entire crew (such as health care, two crew parties a month, etc.) All of this is vague, and really, none of our business.

 

These posts show few of us know how tipping works in a restaurant. Everyone keeps repeating that they know the server gets the money. That's incorrect.

 

In California servers are paid at least the state minimum wage, and depending on the rules the restaurant is working under, the tips may be shared or not (often it is to the discretion of the server, but the restaurant can also be under restrictions by the IRS as to how tips are handled). In the restaurants I did bookkeeping for, the tips were cashed out each night (most appear on credit card slips now), and the servers had to fill out a form listing their tips in cash, on credit card slips, and how much and to whom they split the tips with each night. This is so the server can be taxed on the value of the tips they actually kept (and the bartender, busboy and drink server) at the end of the week.

 

This reporting of the tips received iis a requirement by the IRS. The amount of tips were then added to their gross salary, taxes calculated, and then removed from their salary (because they had already been cashed out each night).

 

So how many of you grill the server with something like "Before I give you one penny, I want to know exactly how much you share with the bartender and the busboy? If the amounts are not satisfactory, I'm going to give you less and I will search them out and give them a tip separately."

 

None of you do that. But that tip in the restaurant is exactly like the DSC. You have no idea how it is split up, if the restaurant allows the server to keep 100% of the tips, or has to split it, or if the split is up to the server, or if the tips are pooled and paid out at the end of the week due to a mandate by the IRS.

 

 

Precisely.

 

.

[emcelh]

deleted

Edited July 25, 2015 by emcelh

[punkincc]

First: cash tips are only required to be handed-in IF the DSC is removed. Tips over & above are never questioned, so you can continue as you do without remorse.

 

Second: People who have worked on the ships have confirmed this is the protocol. I don't see any reason to disbelieve them, when it makes SO much sense anyway.

.

 

People who worked on the ship in what capacity? Crew or senior staff?

 

Did they explain how those cash tips are recaptured after the fact when someone does not remove DSC until day 7? Me to Guest Services, "I am removing my DSC as I have tipped cash all week." Guest Services: "Who did you give the cash tips to?" Me: "I have no idea, various bartenders, several servers in the MDR, a couple times in O'Sheehans and a few times in Taste and Savor. I don't remember which day/nights were where." Now maybe they can look at card swipes, do they do them at all free venues? But with several servers in each, I still don't see them going to all that trouble to try to figure out which server got my tip. And how much $ do they ask the server to give up to go into the pool? If server A has $100 cash at the end of the week from the MDR, how would NCL know how much was mine, or even if ANY of it was mine. I just don't see how it would work.

[swedish weave]

I will water down some of the ridiculous arguments presented here.

 

Let's say I remove the DSC and want the steward to receive some money. I give my neighbor who hasn't removed the DSC some money and he presents it to the steward.

 

There is no way the steward would have to turn that in to management.

 

So-- As it has been stated several times on this threadc--- The enforcement of the rule that tips must be turned in cannot be done !!!

[jb456]

Except that the DSC is NOT a gratuity.

 

It's a Service Charge. Gratuities are not required on NCL, except in certain situations (spa, bar, specialty dining) - the services not delivered to ALL guests.

 

I worry about people paying the crew, because I don't want all of the crew to leave, and ruin the one company which has proven time & again it can deliver the type of vacation I desire.

 

 

Stephen

 

 

P.S. That junior waiter's salary: $50 / MONTH! Yes, per MONTH. The rest of their income is derived from their share of the DSC (subject to minimum in their contract).

 

So withholding would force the cruise line to cover the gap to the minimum monthly, which will drive cruise prices up. Either way, people will get paid - and it will be with your money.

 

 

.

 

 

Is Norwegian Cruise Line Corporation Ltd not a American based company? --

 

There is obviously a reason they call it DSC instead of auto-gratuity like other lines. That reason is likely for TAX PURPOSES.

 

I believe in the USA there is also a Employee Tax Credit for the service industry which allows employers to use a portion of a service charge to cover the minimum wage that they have to pay them while the employers also get to keep a portion of the service charge tax free. Something like that, a person with a tax background or working for IRS would know the exact reason and I am not from USA so I could care less how USA tax works but I would not be surprised that NCL calls it a DSC for tax purposes.

 

Another poster said why does NCL not post the breakdown who the DSC goes to? Well according to the IRS website they have a cut and dry set of rules of what is considered a tip and what is considered a service charge. So likely a reason why NCL does not post a breakdown is because they can't as it would affect their tax fillings and a grey area when it comes to legal rights of the consumer.

 

NCL can't say $2 goes to the person that cleans your room because that would somewhat fall under "tips". But certain rules apply for it to be a tip

 

"The payment must be made free from compulsion;

The customer must have the unrestricted right to determine the amount;

The payment should not be the subject of negotiations or dictated by employer policy; and

Generally, the customer has the right to determine who receives the payment."

 

Maybe thats a reason NCL can't list a breakdown due to tax rules with a very fine line.

 

What are service charges?

An employer or employee's characterization of a payment as a "tip" is not determinative. Again, the absence of any of the four factors listed earlier creates a doubt as to whether a payment is a tip and indicates that the payment may be a service charge.

 

-----------------------

 

 

As for your mention of when people remove the DSC workers are required to turn in the cash. Many say they have to turn the cash in so it gets in the pool.

 

Is that really the truth or is that also for tax purposes?

 

According to IRS website it says "Employees must report to their employer all cash tips received except for the tips from any month that total less than $20. Cash tips include tips received from customers, charged tips (for example, credit and debit card charges) distributed to the employee by his or her employer, and tips received from other employees under any tip-sharing arrangement. Non-cash tips (that is, tips received by an employee in any other medium than cash, such as passes, tickets, or other goods or commodities) from customers are not reported to the employer. All cash tips and non-cash tips are includable in an employee’s gross income and subject to federal income taxes.

Both directly and indirectly tipped employees must report tips to their employer.

A “directly tipped employee” is any employee who receives tips directly from customers, including one who after receiving the tips turns all of them over to a tip pool. Examples of directly tipped employees are waiters, waitresses, bartenders, and hairstylists.

An “indirectly tipped employee” is a tipped employee who does not normally receive tips directly from customers. Examples of indirectly tipped employees are bussers, service bartenders, cooks, and salon shampooers.

Employers are required to retain employee tip reports, withhold employee income taxes and the employee share of social security and Medicare taxes based upon wages and tip income received, and then report this information to the IRS. In addition, employers are required to pay the employer share of Social Security and Medicare taxes based on the total wages paid to tipped employees as well as the reported tip income."

 

 

 

So although the nice fancy marketing that is used on NCL is one thing, and all the free secretaries on cruise critic promoting DSC, prepaying, etc.. in the end it seems like it's only called DSC for tax purposes.

Edited July 25, 2015 by jb456

[jb456]

If NCL is an American based company how can they get away charging an 18% gratuity on alcohol drinks when the IRS website says a grautity is the following.

 

""The payment must be made free from compulsion;

The customer must have the unrestricted right to determine the amount;

The payment should not be the subject of negotiations or dictated by employer policy; and

Generally, the customer has the right to determine who receives the payment."

 

 

If it's an automatic gratuity it goes against what IRS deems to be a tip......

[MisterFidgetpants]

Is Norwegian Cruise Line Corporation Ltd not a American based company? --

 

There is obviously a reason they call it DSC instead of auto-gratuity like other lines. That reason is likely for TAX PURPOSES.

 

I believe in the USA there is also a Employee Tax Credit for the service industry which allows employers to use a portion of a service charge to cover the minimum wage that they have to pay them while the employers also get to keep a portion of the service charge tax free. Something like that, a person with a tax background or working for IRS would know the exact reason and I am not from USA so I could care less how USA tax works but I would not be surprised that NCL calls it a DSC for tax purposes.

 

Another poster said why does NCL not post the breakdown who the DSC goes to? Well according to the IRS website they have a cut and dry set of rules of what is considered a tip and what is considered a service charge. So likely a reason why NCL does not post a breakdown is because they can't as it would affect their tax fillings and a grey area when it comes to legal rights of the consumer.

 

NCL can't say $2 goes to the person that cleans your room because that would somewhat fall under "tips". But certain rules apply for it to be a tip

 

"The payment must be made free from compulsion;

The customer must have the unrestricted right to determine the amount;

The payment should not be the subject of negotiations or dictated by employer policy; and

Generally, the customer has the right to determine who receives the payment."

 

Maybe thats a reason NCL can't list a breakdown due to tax rules with a very fine line.

 

What are service charges?

An employer or employee's characterization of a payment as a "tip" is not determinative. Again, the absence of any of the four factors listed earlier creates a doubt as to whether a payment is a tip and indicates that the payment may be a service charge.

 

-----------------------

 

 

As for your mention of when people remove the DSC workers are required to turn in the cash. Many say they have to turn the cash in so it gets in the pool.

 

Is that really the truth or is that also for tax purposes?

 

According to IRS website it says "Employees must report to their employer all cash tips received except for the tips from any month that total less than $20. Cash tips include tips received from customers, charged tips (for example, credit and debit card charges) distributed to the employee by his or her employer, and tips received from other employees under any tip-sharing arrangement. Non-cash tips (that is, tips received by an employee in any other medium than cash, such as passes, tickets, or other goods or commodities) from customers are not reported to the employer. All cash tips and non-cash tips are includable in an employee’s gross income and subject to federal income taxes.

Both directly and indirectly tipped employees must report tips to their employer.

A “directly tipped employee” is any employee who receives tips directly from customers, including one who after receiving the tips turns all of them over to a tip pool. Examples of directly tipped employees are waiters, waitresses, bartenders, and hairstylists.

An “indirectly tipped employee” is a tipped employee who does not normally receive tips directly from customers. Examples of indirectly tipped employees are bussers, service bartenders, cooks, and salon shampooers.

Employers are required to retain employee tip reports, withhold employee income taxes and the employee share of social security and Medicare taxes based upon wages and tip income received, and then report this information to the IRS. In addition, employers are required to pay the employer share of Social Security and Medicare taxes based on the total wages paid to tipped employees as well as the reported tip income."

 

 

 

So although the nice fancy marketing that is used on NCL is one thing, and all the free secretaries on cruise critic promoting DSC, prepaying, etc.. in the end it seems like it's only called DSC for tax purposes.

The ships are registered in foreign countries and the workers are foreign. The cruise lines pay nearly nothing in US taxes and the wages paid to crew have nothing to do with the IRS

[jb456]

The ships are registered in foreign countries and the workers are foreign. The cruise lines pay nearly nothing in US taxes and the wages paid to crew have nothing to do with the IRS

 

Well if that's the case then you clearly know how sneaky the cruise lines are when it comes to cutting back on things to maximize revenue. If they are that sneaky to do that - then you really think all the DSC or auto tip (on other lines) go to the poor waiter from Philippines? I DON"T THINK SO

 

I don't get how some people can be so naive to believe that all the DSC or auto tip goes to that hard working Philipino trying to support his / her family back home. It's like all the woman that go to AI resorts in the Caribbean and have relationships with the animation team. Fall in love, then send them money all year round lol. When that animator has his wife / kids at home but 50 lovers from around the world sending him money year round and coming to visit him LOL.

 

To each their own.

[MisterFidgetpants]

Well if that's the case then you clearly know how sneaky the cruise lines are when it comes to cutting back on things to maximize revenue. If they are that sneaky to do that - then you really think all the DSC or auto tip (on other lines) go to the poor waiter from Philippines? I DON"T THINK SO

 

I don't get how some people can be so naive to believe that all the DSC or auto tip goes to that hard working Philipino trying to support his / her family back home. It's like all the woman that go to AI resorts in the Caribbean and have relationships with the animation team. Fall in love, then send them money all year round lol. When that animator has his wife / kids at home but 50 lovers from around the world sending him money year round and coming to visit him LOL.

 

To each their own.

I agree with you. Never been to AI so can't speak on that.

[jb456]

And as an example I gave in a earlier post on this thread.

 

Port day - a family of 4 wake up, walk right off the ship, eat brunch in port, eat supper in port, get back on ship, go to their room for the night.

 

Still charged $34 for the night even though the only amenity used that day was room cleaning.

 

Some will say that does not happen often, granted that is true, but it is an actual example of how NCL or any cruise line for that matter basically earn extra money from guests for doing nothing. So their auto DSC system is flawed.

 

All a big money maker as they know even if a person gets bad service chances are they will not waste vacation time to go downstairs and adjust the dsc. (Many said it already in the last few threads about this that they shrugged it off) Of course NCL and all cruise lines genius thinking of auto tips works perfect FOR THEM not the consumer.

 

If one was tipping cash and had bad service they would adjust their tip right then and there based on the service. One that has it auto pay or already prepaid chances are they will not waste time to go do it. Common sense really!

Edited July 25, 2015 by jb456

[fshagan]

Taxes: NCLH is an American corporation. Trying to figure out a tax angle for why NCLH has gratuities is silly; it is a tiny, tiny portion of their overall revenue. There is no tax angle to NCLH calling the DSC a gratuity or a fee or an umpa-lumpa.

 

The point I made earlier is still on point: no one knows if the server in the restaurant is truly splitting the tip with the poorer busser or not. I have never, ever seen anyone ask the server, either.

 

But people leave miserly tips for servers too, or simply stiff them.

 

I don't believe for a minute that anyone that removes the DSC actually pays an equivalent amount in cash tips.

 

On another line, I saw a man complaining about his bar bill, and then zeroing out the tips for the crew because "they ripped me off on drink prices."

 

Some people are simply cheap. I hope NCL makes the DSC into a true "Daily" service charge and requires it at final payment time. That will end the opportunity for those who are truly inconvenienced by a service issue to get some compensation, and that's unfortunate. But it would end the cheapskates stiffing the crew and bragging about it here on Cheat Critic.

[jb456]

I'd like to know when a cruise line gives free gratuities as a promo if they actually dip into their pocket and pay it for you or do they just mark zero on the computer?

[fstuff1]

Since I booked my trip just a few months ago, the dining plan has changed twice, the beverage plan once, DSC raised twice, Nick, Blue Man etc. removed, the room service charge instituted with related policy flustercluck, port time changes, miscommunication and upgrade offers to change from early 2016 to late 2015.

 

What I speculate is a cash flow issue. All of these things are designed to generate cash fast or reduce payables. The push to prepay grats and packages, reduced fuel, increasing on board prices. New mega ships cost a lot. Earnings reports are coming out.

 

All the changes aside, NCL has not marketed the changes well. Loyal customers are annoyed. Communication is non-existant. The left hand doesn't know what the right is doing. I also suspect they have a new IT service provider who is cheaper. The changes seem incohesive an pieced together at the last minute. Changes to policy every month. They have to be chasing something. There is no way any large business would plan to roll out new policies the way they did. Maybe a balloon payment?

 

Winner!

+100 internets to this person!

[mrsd912]

Glad I've already prepaid for June 2016!

[Demonyte]

Taxes: NCLH is an American corporation. Trying to figure out a tax angle for why NCLH has gratuities is silly; ...

 

 

Yes it is. Not because of what you think, but because the publicly traded holding company that owns multiple subsidiaries has nothing to do with how those non-US subsidiaries are taxed (each ship is it's own legal company entity not registered to US) or how their non-US employees are taxed. As already stated, IRS has nothing to do with that.

 

No gratuities ever go through NCLH's books as such so even trying to mix NCLH into this conversation is completely worthless.

[Jane Don]

Since I booked my trip just a few months ago, the dining plan has changed twice, the beverage plan once, DSC raised twice, Nick, Blue Man etc. removed, the room service charge instituted with related policy debacle, port time changes, miscommunication and upgrade offers to change from early 2016 to late 2015.

 

What I speculate is a cash flow issue. All of these things are designed to generate cash fast or reduce payables. The push to prepay grats and packages, reduced fuel, increasing on board prices. New mega ships cost a lot. Earnings reports are coming out.

 

All the changes aside, NCL has not marketed the changes well. Loyal customers are annoyed. Communication is non-existant. The left hand doesn't know what the right is doing. I also suspect they have a new IT service provider who is cheaper. The changes seem incohesive an pieced together at the last minute. Changes to policy every month. They have to be chasing something. There is no way any large business would plan to roll out new policies the way they did. Maybe a balloon payment?

[Demonyte]

You seem to be having problems with copy-paste and/or repeating yourself with that NCL bashing - you have already posted the exact post (in another thread?) before.

[Jane Don]

You seem to be having problems with copy-paste and/or repeating yourself with that NCL bashing - you have already posted the exact post (in another thread?) before.

 

Funny, I couldn't find the comment so I reposted it. Is that wrong?

 

I object to the term bashing. No one could disagree that NCL has made multiple changes in policy in short period of time. What business wouldn't expect customers and stakeholders to speculate?

[dcollette]

Ok, so I have to agree on some points here. I generally book pretty far out, generally well over a year. When I first booked, it was still under the $12 dsc, and when the notice came out that they were upping the charge to 12.95 (odd number, but whatever) I thought, well that doesn't seem too bad. However, all these changes seem sketchy to me...

 

First, we had the dining package as our "perk"-- then that changed from only covering the first two guests to all guests in the room. Good for me, as I had paid for my 3rd passenger to have the package, so they were able to refund that back to me. Then came the first of the dsc increases. Ok, not a big deal, I always pre pay and my rate was "locked in" so no problem. Now, a very short time later, they are upping the charge again, changing the arrival/departure times from Bermuda and no more Nickelodeon or Zakarian. Not to mention the choice to move to more a la carte pricing in the specialty dining rooms. None of this is appealing to me, and this may very well be my last NCL cruise, even though I have loved them dearly. It seems like all of the progress that Sheehan made to improve the brand have been completely reversed and are most likely going to turn most people away from the brand, both loyal and new cruisers alike.

 

I don't understand people wanting to remove the DSC, but I can also understand people wanting to make sure the ones who work hard should receive adequate tips. I'm certain the folks working hard down in the laundry room who we never get to see would appreciate a tip, and I'm fairly certain that the measly DSC does not cover these folks. I do think it would be in their best interest to explain how much of each DSC goes to what category of worker. People do work harder when they know that their tip is directly related to their service level, but some folks still don't tip adequately either way. I always tip extra (in cash) to those who deserve it, and if they had to turn those tips over--I would be enraged. There is no way for the line to track and force workers to turn over tips as mentioned earlier. It really doesn't help the workers. I hope they don't decide to cut back on staff as well with all these changes.

[LMaxwell]

I'm certain the folks working hard down in the laundry room who we never get to see would appreciate a tip,

 

I'm sure the hard working folks that never see a guest would appreciate a reliable and decent salary from their employer that is not at guest discretion.

[dcollette]

Oh, I totally agree, and I'm certain they are paid anything BUT a decent salary. I don't mean to say they should rely on a tip from guests, only that people who opt not to pay because they "claim" they don't use the ship's services while in port--they don't give a moment's thought to what it takes "behind the scenes" to make the ship run.

[NLH Arizona]

Since I booked my trip just a few months ago, the dining plan has changed twice, the beverage plan once, DSC raised twice, Nick, Blue Man etc. removed, the room service charge instituted with related policy debacle, port time changes, miscommunication and upgrade offers to change from early 2016 to late 2015.

 

What I speculate is a cash flow issue. All of these things are designed to generate cash fast or reduce payables. The push to prepay grats and packages, reduced fuel, increasing on board prices. New mega ships cost a lot. Earnings reports are coming out.

 

All the changes aside, NCL has not marketed the changes well. Loyal customers are annoyed. Communication is non-existant. The left hand doesn't know what the right is doing. I also suspect they have a new IT service provider who is cheaper. The changes seem incohesive an pieced together at the last minute. Changes to policy every month. They have to be chasing something. There is no way any large business would plan to roll out new policies the way they did. Maybe a balloon payment?

You posted these as facts, could you please show your back-up to prove these allegations are in fact true. It is one thing to speculate, but to say all of these are facts, I've really got to questions that, since some of them have been debunked already.

 

Fact:

 

• NCL is the only major line to not provide customers with a detailed breakdown of how gratuities, DSC or the 18% added, are distributed amongst crew
  
• Demanding that employees turn over all cash gratuities by guests removing the DSC would be impossible to enforce.
  
• NCL, with the new mandatory gratuities on dining and bar is double charging the grats on those services.
  
• NCL admits that all gratuities collected do not go into crew pockets.
  
• NCL admits that managers and officers are sometimes recipients of DSC "incentives".
  
• NCL counts DSC as revenue in its financial statements and is under no obligation to apply any, some or all of it to employee wages.