Mandatory Gratuities?

[RuthC]

25 minutes ago, lyndarra said:

Wouldn't it depend on the income tax rules for whatever country in which their their income is assessed.

Exactly. They don't pay US Income taxes, and don't pay income taxes on gratuities in Indonesia or Philippines. 

[Banditswife]

4 hours ago, firsttimer1971 said:

 

Isn't it the other way around? Customers feeling obliged to tip because they know that employers pay less to their employees resulting in the employees depending on tips to have a decent wage? Nothing is stopping employers from paying their employees a decent wage, regardless of the tips they receive. The only reason to pay them less is greed on the part of the employers. 

 

Coming from a country where employees in the service industry are paid a decent wage and tipping is not the norm (or just a small amount), I have been reading all the threads and discussions about tipping in the USA with increasing amazement. There seems to be a huge division between the USA and the rest of the world in that respect. I saw videos about customers at drive-throughs and in a self-service kiosk in the US being asked to tip. 

 

Don't get me wrong, I understand how it works on a cruise and will not be removing the daily gratuity . I'll even be tipping some extra for excellent service, but I'd much rather just pay more for my cruise and not have to deal with tipping at all. 

Coming from a family who owns a small restaurant in USA.  If my family paid minimum wage to their employees, they would have to raise the price of the meals they serve to cover that cost.  Yes, some restaurants have a better profit margin, but most don't.

[Banditswife]

If they raise the cost of a cruise to cover the crew's wages instead of tipping, wouldn't that require us to pay the taxes on the higher price of the cruise?  So by keeping it as is (gratuity, crew appreciation) isn't it cheaper for us in the long run?  

[Mary229]

1 minute ago, Banditswife said:

If they raise the cost of a cruise to cover the crew's wages instead of tipping, wouldn't that require us to pay the taxes on the higher price of the cruise?  So by keeping it as is (gratuity, crew appreciation) isn't it cheaper for us in the long run?  

Taxes on your fare are not sales taxes.  They are other taxes that various ports and entities impose on the visits.  Just like the tax you have on an airfare - that is an airport tax and varies airport to airport 

[cgolf1]

5 hours ago, shakuyi said:

Everytime I think about this topic I think its important for everyone to re-educate themselves on the history of tipping and how we as humanity came to this point. There was a point in time where all employees were paid fairly. It was not until groups of people felt the need to pay more for services which led to the tipping culture we have today. If nobody tipped back in the day we would not have this current culture today. So while I applaud those who feel the need to tip above the pre-paid gratuities keep in mind the more you tip the more likely gratuities are going to go up for the rest of the us. Tipping started and became mandatory only because others felt the need to tip when it was purely not necessary. Now we all see that "extra tip line" on any receipt we get. So the more we all tip and feel the need to tip more than necessary the more likely we are to get increases in mandatory tipping because we are conveying the message that we can afford to tip more instead of the employer paying more fairly.

 

I am not saying not to tip but I am saying be cautious not to over tip and set the precedent that the bar should be raised. Employers should not feel the need to pay their employees less just because their customers feel the need to tip more. Thats never going to be how fix this issue so everyone gets back to fair pay.

 

This so doesn't make sense. We generally tip 15%ish at home for decent service and 20% or a bit more for excellent. So if I go by your logic poor service, standard service, and excellent service get the same tip, which doesn't sit well with me at all. We will reward service above and beyond with an extra tip, along with a comment in the survey, which on the other 3 lines we have sailed is almost as important as the extra money.

 

The only money we have ever shifted to less was the head waiters on Disney that were truly awful and shifted that money to the serving team instead. Hindsight not sure we would do it now, but they were really bad and I think we did it twice, so we aren't perfect. Overall those 2 cruises our tips still were more than the suggested.

Edited April 25, 2023 by cgolf1

[RuthC]

57 minutes ago, Banditswife said:

If they raise the cost of a cruise to cover the crew's wages instead of tipping, wouldn't that require us to pay the taxes on the higher price of the cruise?  So by keeping it as is (gratuity, crew appreciation) isn't it cheaper for us in the long run?  

Yes, that's it. Either that, or the crew would end up with less money in their pockets. 
For example, a $16/day gratuity would have to be closer to $20/day for the crew to break even, since they would now have to pay taxes on the shifted income. 

[sciencewonk]

5 hours ago, firsttimer1971 said:

 

Isn't it the other way around? Customers feeling obliged to tip because they know that employers pay less to their employees resulting in the employees depending on tips to have a decent wage? Nothing is stopping employers from paying their employees a decent wage, regardless of the tips they receive. The only reason to pay them less is greed on the part of the employers. 

 

Coming from a country where employees in the service industry are paid a decent wage and tipping is not the norm (or just a small amount), I have been reading all the threads and discussions about tipping in the USA with increasing amazement. There seems to be a huge division between the USA and the rest of the world in that respect. I saw videos about customers at drive-throughs and in a self-service kiosk in the US being asked to tip. 

 

Don't get me wrong, I understand how it works on a cruise and will not be removing the daily gratuity . I'll even be tipping some extra for excellent service, but I'd much rather just pay more for my cruise and not have to deal with tipping at all. 

I, too, live in a country where tipping is not the norm.  I used to live in the US, where it is standard.  In general, I saw much better service in the US.  I say "in general" because I have seen excellent service and terrible service in both countries, but overall, servers who get tips tend to go the little extra.

 

I would never remove gratuities from my cruise account and I almost always give extra tips to those who diligently make my cruise more enjoyable.  If I were to have substandard service (which I never have), I would talk to customer relations about it and withhold the extra tips.  Given the exceptional service rendered on HAL, I would expect them to be self-policing.

[ontheweb]

13 hours ago, Banditswife said:

If they raise the cost of a cruise to cover the crew's wages instead of tipping, wouldn't that require us to pay the taxes on the higher price of the cruise?  So by keeping it as is (gratuity, crew appreciation) isn't it cheaper for us in the long run?  

Raising the fare to eliminate tips would also raise the amount which would have to be covered by the trip insurance you buy. So that would be a cost to us, especially to senior citizens.

[Mopree]

If a person were to add up what they would typically tip for three restaurant meals a day in Canada or the US I think it would be more than the daily gratuity charged by HAL. Removing the gratuities is something I could never do. Whether I agree or not with the tipping culture it is what it is. At least appreciation is shown by any crew member that I have singled out for an  additional gratuity. In Canada and the US a tip in a restaurant is expected and seldom acknowledged. 

[*Miss G*]

2 hours ago, ontheweb said:

Raising the fare to eliminate tips would also raise the amount which would have to be covered by the trip insurance you buy. So that would be a cost to us, especially to senior citizens.

 

It would also reduce the accrual of Mariner points to attain stars.  🙃

 

It is beyond me how people can be so fixated on what the crew makes and how they are paid.  A steward once offered that he was planning on working the ships for five years to build up a nest egg, as he and his wife could live comfortably on $500/month in their country.  In the meantime, while he was at sea, she was going to school to become a dentist.

 

It’s no one’s business what the paycheque arrangements are.  If the Hotel Service Charge is removed then the Hotel Director is going to be scrutinizing the stewards.  These people are hard workers with an amazing customer-centric focus.  Don’t stiff them and don’t bring unwarranted conflict as to their competency.

 

Edited April 26, 2023 by *Miss G*

[ontheweb]

2 hours ago, *Miss G* said:

 

It would also reduce the accrual of Mariner points to attain stars.  🙃

 

It is beyond me how people can be so fixated on what the crew makes and how they are paid.  A steward once offered that he was planning on working the ships for five years to build up a nest egg, as he and his wife could live comfortably on $500/month in their country.  In the meantime, while he was at sea, she was going to school to become a dentist.

 

It’s no one’s business what the paycheque arrangements are.  If the Hotel Service Charge is removed then the Hotel Director is going to be scrutinizing the stewards.  These people are hard workers with an amazing customer-centric focus.  Don’t stiff them and don’t bring unwarranted conflict as to their competency.

 

And you can also reward them by writing them up as crew members who made your cruise special. This helps them get promotions.

[cbr663]

On 4/25/2023 at 9:27 AM, Mike07 said:

 

.....

IDK... I kind of wish the gratuities were built into the fares, but it seems like many lines still want to itemize out said gratuities.

 

Gratuities most certainly could be built into the fares as some cruise lines do.  HAL doesn't because it simply works better for HAL to not have them included.

[Tampa Girl]

19 hours ago, lyndarra said:

Is that correct? Wouldn't it depend on the income tax rules for whatever country in which their their income is assessed. It seems tips in USA are taxable if I read the following correctly.

https://www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting

 

 

What has not been mentioned is any what, if any, additional tax liability on the cruise company if the gratuities were absorbed into their overall revenue.  It may not be in HAL's best interest to include the gratuities as mandatory.  A CPA  opinion, pls?

[Cruise Junky]

They should all just add it to the fare like Princess Australia does.  They have no issue getting employees because of the higher wages. Tipping is such an American thing, it needs to go.  In Canada most provinces don’t have a server wage anymore. 

[lextsy]

So the only question i have after reading this thread is, besides me going to my favourite bar and seeing the same person who is always cheerful and want to tip them does there ever seem to be any expectations for tips (not including prepaid gratuities). I assume not.. Also is $1 for a drink etc be deemed an acceptable tip to a server? or is that a slap in the face like i see in usa where they throw the money back in your face 😁

[Guest ldtr]

On 4/25/2023 at 9:45 PM, kazu said:

 

Absolutely correct.  They would go up as crew would be subject to a different tax.  They get more the way it is being done.

 

I am really shocked at the less than 5% number (and no I’m not doubting you) - it’s just that on  some shorter cruises (usually part of a longer cruise) I have been on had people lined up at guest services and they were there for one purpose and one purpose only.   Not the case on my longer cruises.

Keep in mind the the big three cruise line holding companies nclh, rcl and ccl are all listed on the US stock exchanges. As a result even though they are not US companies, they must follow US accounting standards. Under US accounting standards tips are outside of the companies books. The amount of tips received are not considered as income, and the money paid to employees are not considered to be expense. The money is processed outside of the companies books.

 

There are some conditions that must be met. The most important is that all money's received must be distributed to employees. The second condition is that they must be optional, as in can be removed.  Both of those conditions are important. They mean that the money does go to the employees and not retained by the company.  

 

The current system does provide benefits to the company, the workers and the passengers.

 

As far as the company is concerned it does impact some payroll taxes depending upon a workers country of residence. It also impacts gross and net margins in their financial reporting.

 

As far as employees it may impact the taxes they pay, depending upon country. Lots of variance between countries on how tips are treated vs income. It may also impact recruiting fees.

 

As far as passengers since gratuities are paid onboard, unless you buy a package, they are not included in the trip insurance cost calculation. if gratuities went away and fares went up by the same amount the trip insurance prices would go up.  For the same reason one does not have to pay them in advance so less money is due at the final pay dates.

[Shmoo here]

On 4/24/2023 at 10:56 AM, Mary229 said:

This is what I always thought.  There was a thread recently where some people were saying they do get to keep them.  Is there any way we can get verification ?

 

and yes, I think it is tacky to remove tips.  Sorry, OP but that is how I feel

This is a page from the Employee handbook.  Notice the "Tipping Not Required Policy" section

 

 

Edited May 10, 2023 by Shmoo here

[Guest ldtr]

10 minutes ago, Shmoo here said:

This is a page from the Employee handbook.  Notice the "Tipping Not Required Policy" section

 

 

As I posted earlier. They have to have that policy due to US accounting rules. If they remove the ability for it to be removed, it becomes a service charge, not a gratuity and the benefits for both the employee and the company go away.

 

The fact that it is optional makes it also pretty certain that all of that money is going to the employees.

[ontheweb]

2 hours ago, ldtr said:

Keep in mind the the big three cruise line holding companies nclh, rcl and ccl are all listed on the US stock exchanges. As a result even though they are not US companies, they must follow US accounting standards. Under US accounting standards tips are outside of the companies books. The amount of tips received are not considered as income, and the money paid to employees are not considered to be expense. The money is processed outside of the companies books.

 

There are some conditions that must be met. The most important is that all money's received must be distributed to employees. The second condition is that they must be optional, as in can be removed.  Both of those conditions are important. They mean that the money does go to the employees and not retained by the company.  

 

The current system does provide benefits to the company, the workers and the passengers.

 

As far as the company is concerned it does impact some payroll taxes depending upon a workers country of residence. It also impacts gross and net margins in their financial reporting.

 

As far as employees it may impact the taxes they pay, depending upon country. Lots of variance between countries on how tips are treated vs income. It may also impact recruiting fees.

 

As far as passengers since gratuities are paid onboard, unless you buy a package, they are not included in the trip insurance cost calculation. if gratuities went away and fares went up by the same amount the trip insurance prices would go up.  For the same reason one does not have to pay them in advance so less money is due at the final pay dates.

Thank you for the explanation why the present policy is a win/win/win situation for all involved.

 

I only wish I could give your post both a thank you and a like. I gave a like, and this will have to do as a thank you.

[DCThunder]

Does a "fifty-dollar handshake" to the maître d' ensure you of a better table and service in the MDR?  How about tearing a Benjamin in half and giving it to a bartender and saying you'll get the other half at the end of the trip, IF I get a "country club" pour with my drinks?

 

Those baller moves work in the movies and on TV, right?  😎

[CGinMTL]

A few comments 

I wish it would be harder for people to remove tips 

If you have never complained about any service, how can you justify zero tip 

If people would need some kind of signature from each dept. 

There would be less removals 

 

Also, we are taking a family cruise at the end of the month HAL exchange rate for cad was very good, so we decided to prepay 

We have a 2 yr old and a 6 month old with us 

The 2 year old was a no brainer that we would pay tips 

When I asked my daughter what she would do for the baby, the answer was clear, I am not going to save $150 ( cad) on the back of crew  members. 

 

I was proud of her answer

[lissie]

On 4/26/2023 at 4:50 AM, shakuyi said:

Everytime I think about this topic I think its important for everyone to re-educate themselves on the history of tipping and how we as humanity came to this point. There was a point in time where all employees were paid fairly. It was not until groups of people felt the need to pay more for services which led to the tipping culture we have today. If nobody tipped back in the day we would not have this current culture today. So while I applaud those who feel the need to tip above the pre-paid gratuities keep in mind the more you tip the more likely gratuities are going to go up for the rest of the us. Tipping started and became mandatory only because others felt the need to tip when it was purely not necessary. Now we all see that "extra tip line" on any receipt we get. So the more we all tip and feel the need to tip more than necessary the more likely we are to get increases in mandatory tipping because we are conveying the message that we can afford to tip more instead of the employer paying more fairly.

 

I am not saying not to tip but I am saying be cautious not to over tip and set the precedent that the bar should be raised. Employers should not feel the need to pay their employees less just because their customers feel the need to tip more. Thats never going to be how fix this issue so everyone gets back to fair pay.

What you are saying except for one important point. Its not humanity who got to this point is the USA! 

 

I will tip in the USA because its built into the way you pay staff. I will always call out Americans who throw cash around tipping in other countries were its totally inappropriate. By tipping where its not required all you are doing is encouraging employers to pay less because the customer will subsidize directly 

[USN59-79]

On our recent cruise we did a B2B2B where we were in a signature suite and an outside cabin.  For the outside cabin we paid $16 pp per day and the suite $17.50.  Does that mean that our cabin stewards for the suite were paid $3. per day more than the other stewards?  My steward said that he was responsible for 30 cabins.  Thus at $1.50 per day times 30 was my suite steward making $45. per day more than the outside cabin steward?

Ray

[firsttimer1971]

The Hotel Service Charge that is charged on a daily basis is pooled together and then paid to all crew members. So no, the suite stewards don't necessarily make $45 more than the outside cabin stewards as we don't know how the Hotel Service Charge/Crew Appreciation is distributed among the crew. 

 

From the FAQ on the HAL website:
" Our crew works very hard to make sure that every aspect of your cruise meets the highest standards. This includes those crew members who serve you directly, such as Dining Room wait staff and the stewards who service your stateroom each day. There are also many others who support their efforts whom you may never meet, such as galley and laundry staff. To ensure that the efforts of all of our crew members are recognized and rewarded, a daily Hotel Service Charge is automatically added to each guest’s shipboard account.

...

The Hotel Service Charge is paid entirely to Holland America Line crew members, and represents an important part of their compensation" 

 

[sandiego1]

Suites are charged more because they are considerably larger than other cabins. Therefore, they take longer to clean. Some even have an extra half bath, 2 sinks or a separated tub and shower.