First trip to the USA - tipping

[Tomorrow]

However if people stopped tipping the servers would just drop down to minimum wage rather than below since the law says:

I'm not so sure. I believe some employers would pay their servers minimum wage, and some would pay more - some even much more. People expect a different level of service from a Morton's than they do a Golden Corral. Over time employers would adjust salaries accordingly, since you're going to have to pay more for better workers.

 

[Beerstalker]

I used to work delivering electronics/furniture/appliances for Circuit City when I was in college, and as a second job for a while after (99-03 or so). Tipping was not customary and we never expected a tip. We did get them on occasion, but it was definitely not the norm.

The only times we kind of expected tips were when we were asked to do something that was not really our job to do. For example if we get to your house and we can't fit the stuff in without removing your doors from the hinges, taking the doors off the refrigerator etc. Or if you asked us to move your old furniture, electronics, appliance to a different room, or haul them away. If we did that then we kind of figured we would probably get a tip, but we still wouldn't get upset if we didn't.

 

[hallux]

Simetimes there's a food delivery charge too, yet people still tip. And sometimes delivery is included or free through some promotion or something else when it comes to appliances or furniture.

Read the fine print on the Dominos or Pizza Hut ads where delivery is advertised. It will say something like "delivery charge of $x.xx added for all delivery orders, delivery charge is not to be considered a tip to the driver".

If I recall (I didn't work at a delivery location) delivery drivers were paid the same as other non-tipped workers, or at least more than some other tipped workers. However, consider that the drivers need to pay for upkeep of their personal vehicles to bring your food to you, as well as fuel and insurance. A kid working at a Pizza Hut delivering pizzas will barely break even on their vehicle costs if they had to live on wages alone.

 

[Scepticalscribe]

Read the fine print on the Dominos or Pizza Hut ads where delivery is advertised. It will say something like "delivery charge of $x.xx added for all delivery orders, delivery charge is not to be considered a tip to the driver".

If I recall (I didn't work at a delivery location) delivery drivers were paid the same as other non-tipped workers, or at least more than some other tipped workers. However, consider that the drivers need to pay for upkeep of their personal vehicles to bring your food to you, as well as fuel and insurance. A kid working at a Pizza Hut delivering pizzas will barely break even on their vehicle costs if they had to live on wages alone.

You guys use your private personal vehicles for work?

In Europe, I cannot remember ever having a delivery that was not delivered by a vehicle in the company livery (unless I had requested a taxi to do the needful occasionally for takeaways).

Thus, deliveries were - are- carried out by commercial vehicles, and these are taxed at the commercial rate - which was - and is - less than the personal rate, if memory serves. That also meant that the cost of upkeep of the vehicle, fuel, insurance, tax, and so on, was - and is - paid for by the company.

In fact, (yes, European regulation again) I doubt that it is legal to use a vehicle for commercial purposes unless it is licensed commercially.

So, you have companies in the US that don't have vehicles for deliveries, and don't believe in paying staff wages, (fresh air and the goodwill of customers were sufficient), despise holidays, sickpay and pensions, but do believe in dividends for shareholders, obscene levels of remuneration for directors, and off shore tax dodging devices and instruments for whatever they earn?

Your country remains an enduring and baffling mystery to me.

 

[D.T.]

You guys use your private personal vehicles for work?

The US businesses where an employee uses their personal vehicles are a very, very tiny minority. Pizza and occasionally flower delivery, maybe a few for inter-city delivery (of things like legal documents).

Plus now, options like Uber are private vehicles, but of course, they have a presence all over Europe, so it's not unique to the US.

Major logistics companies: UPS, FedEx, USPS - any kind of merchandise/supplies: furniture, any kind of appliances, construction supplies - public sector - some private transportation, that's all dedicated company vehicles.

 

[hallux]

You guys use your private personal vehicles for work?

In Europe, I cannot remember ever having a delivery that was not delivered by a vehicle in the company livery (unless I had requested a taxi to do the needful occasionally for takeaways).

Thus, deliveries were - are- carried out by commercial vehicles, and these are taxed at the commercial rate - which was - and is - less than the personal rate, if memory serves. That also meant that the cost of upkeep of the vehicle, fuel, insurance, tax, and so on, was - and is - paid for by the company.

In fact, (yes, European regulation again) I doubt that it is legal to use a vehicle for commercial purposes unless it is licensed commercially.

So, you have companies in the US that don't have vehicles for deliveries, and don't believe in paying staff wages, (fresh air and the goodwill of customers were sufficient), despise holidays, sickbay and pensions, but do believe in dividends for shareholders, obscene levels of remuneration for directors, and off shore tax dodging devices and instruments for whatever they earn?

Your country remains an enduring and baffling mystery to me.

Yup, it reduces overhead for the franchise (many Pizza Hut, Dominos, Papa John's, etc places are franchise-owned) owner. Dominos just recently has started deploying a dedicated delivery vehicle painted up with their logo and outfitted with a warming oven - Domino's DXP. That doesn't go for ALL places - florists, edible arrangements places come to mind, most smaller locally-owned and non-franchise places will have dedicated delivery vehicles.

@D.T. Yeah, I missed the UPS, FedEx, etc of the world when I was composing my response, at the same time you were composing. However, some FedEx vehicles are actually contractors and I believe are self-owned, licensed and insured by the driver. Those drivers are paid by the package and usually the ones you see driving around on weekend days trying to catch up on deliveries they couldn't make during the week. See here: BuildAGroundBiz.com Link found here: Independent contractor jobs at FedEx

 

[Scepticalscribe]

The US businesses where an employee uses their personal vehicles are a very, very tiny minority. Pizza and occasionally flower delivery, maybe a few for inter-city delivery (of things like legal documents).

Plus now, options like Uber are private vehicles, but of course, they have a presence all over Europe, so it's not unique to the US.

Major logistics companies: UPS, FedEx, USPS - any kind of merchandise/supplies: furniture, any kind of appliances, construction supplies - public sector - some private transportation, that's all dedicated company vehicles.

Well, oddly enough, several of the taxis I have seen are also linked into the Uber system, but - personally - I have never used an Uber car that wasn't also a licensed taxi.

However, using private cars for pizza deliveries does raise a question in my mind concerning outcomes in your litigation happy society: What happens - i.e. who pays - if an accident occurs while a kid is delivering a pizza in his private car? Who pays for the damage to the kid's car? If the kid damages another vehicle, who is liable? Who is deemed responsible?
[doublepost=1462314839][/doublepost]

Yup, it reduces overhead for the franchise (many Pizza Hut, Dominos, Papa John's, etc places are franchise-owned) owner. Dominos just recently has started deploying a dedicated delivery vehicle painted up with their logo and outfitted with a warming oven - Domino's DXP. That doesn't go for ALL places - florists, edible arrangements places come to mind, most smaller locally-owned and non-franchise places will have dedicated delivery vehicles.

@D.T. Yeah, I missed the UPS, FedEx, etc of the world when I was composing my response, at the same time you were composing. However, some FedEx vehicles are actually contractors and I believe are self-owned, licensed and insured by the driver. Those drivers are paid by the package and usually the ones you see driving around on weekend days trying to catch up on deliveries they couldn't make during the week. See here: BuildAGroundBiz.com Link found here: Independent contractor jobs at FedEx

Well, in my part of the world, yes, even florists tend to have small delivery vehicles…..commercially taxed, and insured, and prettily painted in their very own livery.

 

[hallux]

Well, oddly enough, several of the taxis I have seen are also linked into the Uber system, but - personally - I have never used an Uber car that wasn't also a licensed taxi.

However, using private cars for pizza deliveries does raise a question in my mind concerning outcomes in your litigation happy society: What happens - i.e. who pays - if an accident occurs while a kid is delivering a pizza in his private car? Who pays for the damage to the kid's car? If the kid damages another vehicle, who is liable? Who is deemed responsible?
[doublepost=1462314839][/doublepost]

Well, in my part of the world, yes, even florists tend to have small delivery vehicles…..commercially taxed, and insured, and prettily painted in their very own livery.

A little reading on the topic. This appears to be a law firm, it could just be a discussion board but the replies I scanned seemed to be intelligent and somewhat based in law - even citing precedent.
Pizza Delivery | Legal Advice

 

[mildocjr]

You guys use your private personal vehicles for work?

In Europe, I cannot remember ever having a delivery that was not delivered by a vehicle in the company livery (unless I had requested a taxi to do the needful occasionally for takeaways).

Thus, deliveries were - are- carried out by commercial vehicles, and these are taxed at the commercial rate - which was - and is - less than the personal rate, if memory serves. That also meant that the cost of upkeep of the vehicle, fuel, insurance, tax, and so on, was - and is - paid for by the company.

In fact, (yes, European regulation again) I doubt that it is legal to use a vehicle for commercial purposes unless it is licensed commercially.

So, you have companies in the US that don't have vehicles for deliveries, and don't believe in paying staff wages, (fresh air and the goodwill of customers were sufficient), despise holidays, sickbay and pensions, but do believe in dividends for shareholders, obscene levels of remuneration for directors, and off shore tax dodging devices and instruments for whatever they earn?

Your country remains an enduring and baffling mystery to me.

Companies don't despise holidays except the one's that have to work harder to produce for the holidays, most companies offer 7 sick days along with 2 weeks of vacation pay (most of the time this goes up with time working at the business) and generally we get New Years Day, Memorial Day, 4th of July, Labor Day, Thanksgiving, and Christmas off as holidays, some companies honor vets and give them Veteran's day off as well. Few companies still offer a pension, I'm lucky to work at one. Using a personal vehicle for food delivery is expected here, delivering equipment for cable install for example is done with a company vehicle. I don't know how it is on the east and west coast (as they are 3 and 4 times more expensive respectively from where I live) but average wages for < 18 year olds is $8/hr, $11 for college students (non-manufacturing no degree), $16 for blue-collar workers, $13 for Associate's Degree (starting off), and $18 for bachelor's degree (starting off) Manufacturing in my area is about $17/hr, upper management is about $40/hr. CEO takes a portion of profits of what is not spent on the business, number varies greatly. A living wage in my area is about $11 an hour and that is without any extra amenities, just food, water, shelter, power , gas for the car, and car insurance. $14 get's you TV service. (This also assumes you are contributing < 5% to a 401k.)

The motto for businesses in America is keep the running costs low while keeping profits high, whatever you can think of, they probably do.

 

[mobilehaathi]

The motto for businesses in America is keep the running costs low while keeping profits high, whatever you can think of, they probably do.

Which translates to, "I'm going to line my pockets as much as possible, to hell with the people doing the work."

 

[Scepticalscribe]

…...

Using a personal vehicle for food delivery is expected here, delivering equipment for cable install for example is done with a company vehicle. ……...

The motto for businesses in America is keep the running costs low while keeping profits high, whatever you can think of, they probably do.

What happens if that vehicle is in an accident while delivering for the company? Is the company responsible, or is the private individual?

My sense is that in the US there is a growing body of corporate thought which seeks to offload the cost of employment entirely onto the consumer, or, failing that, onto the employee.

Benefits (such as sick pay, pensions, maternal leave, holiday pay) are eroded, while salaries are cut to the bone, and would be abolished outright if some companies thought they could get away with this.

Which translates to, "I'm going to line my pockets as much as possible, to hell with the people doing the work."

Unfortunately, this appears to be true.

 

[hallux]

What happens if that vehicle is in an accident while delivering for the company? Is the company responsible, or is the private individual?

My sense is that in the US there is a growing body of corporate thought which seeks to offload the cost of employment entirely onto the consumer, or, failing that, onto the employee.

Benefits (such as sick pay, pensions, maternal leave, holiday pay) are eroded, while salaries are cut to the bone, and would be abolished outright if some companies thought they could get away with this.



Unfortunately, this appears to be true.

Yeah, maintaining my medical benefits seemed like a full time job for part of this year. We had a change in HSA provider, all kinds of paper shuffling to get that moved over, also had to do a health screening so they could charge us a penalty if we aren't healthy enough or if we smoke. Increased costs by way of lower employer contribution AND higher premiums - my health insurance paycheck deduction went up 100% this year between the higher premium and the additional cost of my contribution to the HSA to maintain the same amount from last year.

I'm lucky to get as much paid time off (combination of vacation and sick pay under one time code) as I get - 5 weeks plus a week of floating holidays and all the regular holidays mentioned before. I get that much because of my time with the company, new employees now get 2 weeks (I started at 3). I end up using it all but usually have to take the last 2 weeks of the year off to make the target.

 

[Tomorrow]

If I recall (I didn't work at a delivery location) delivery drivers were paid the same as other non-tipped workers, or at least more than some other tipped workers. However, consider that the drivers need to pay for upkeep of their personal vehicles to bring your food to you, as well as fuel and insurance. A kid working at a Pizza Hut delivering pizzas will barely break even on their vehicle costs if they had to live on wages alone.

You guys use your private personal vehicles for work?

I used to deliver pizza and I can address these questions, at least based on my experience.

Yes, we use our own cars. Yes, I got paid (slightly) more than minimum wage. Yes, I got to keep my tips. And as far as gas and upkeep goes, we were paid commissions on top of our wages and tips, based on the number of orders we delivered and the number of menu items ordered. It worked out to about 3/4 my hourly pay, so it wasn't bad. The commissions were paid out daily, not added into our paychecks, so it wasn't taxed (it was essentially for mileage, gas, insurance, etc.).

 

[mobilehaathi]

The commissions were paid out daily, not added into our paychecks, so it wasn't taxed (it was essentially for mileage, gas, insurance, etc.).

For the sake of @Scepticalscribe, I'll point out that payments 'under the table' aren't exactly legal.

 

[mildocjr]

What happens if that vehicle is in an accident while delivering for the company? Is the company responsible, or is the private individual?

Typically the company has insurance that covers the accident, although they may have loopholes that make the individual responsible in certain cases. (DUIs)

My sense is that in the US there is a growing body of corporate thought which seeks to offload the cost of employment entirely onto the consumer, or, failing that, onto the employee.

In a nutshell, yes, however, the company still has to handle the on boarding processes for new hires with the HR department.

Benefits (such as sick pay, pensions, maternal leave, holiday pay) are eroded, while salaries are cut to the bone, and would be abolished outright if some companies thought they could get away with this.

The biggest mistake that I've seen in businesses where I'm at are businesses pushing Salary (not hourly) pay at $15 an hour. Usually this means that this person is going to work over 40 hours but still receive the same pay, it's a loophole, IMO Salaried workers should not make less than $40,000 a year and if I'm correct, a law has been passed that forces Salaried workers to make at least $51,500.

The US economy can eat someone alive if they don't know what to watch out for, at the same time with the way it's set up, played right there is no limit to a worker's income, in the end it's just taxes that bite you and what most Americans gripe about, but people usually write a lot of stuff off on their taxes just to drop them to the next tax bracket. The current tax bracket information is available on the IRS website, it just gets difficult for people to write of $12,500 if they make $50,000 a year to get out of the 35% tax bracket. Likewise, people who work hourly for $37,000 who end up working overtime might go over that $37,500 mark and end up paying 35% taxes rather than 25%.

 

[Tomorrow]

For the sake of @Scepticalscribe, I'll point out that payments 'under the table' aren't exactly legal.

There's nothing "under the table" about it - it's direct reimbursement for use of a personal vehicle for business purposes. It's no different at all from claiming mileage on your expenses, you simply get reimbursed with no taxes taken out. It's IRS-approved.
[doublepost=1462453979][/doublepost]

The US economy can eat someone alive if they don't know what to watch out for, at the same time with the way it's set up, played right there is no limit to a worker's income, in the end it's just taxes that bite you and what most Americans gripe about, but people usually write a lot of stuff off on their taxes just to drop them to the next tax bracket. The current tax bracket information is available on the IRS website, it just gets difficult for people to write of $12,500 if they make $50,000 a year to get out of the 35% tax bracket. Likewise, people who work hourly for $37,000 who end up working overtime might go over that $37,500 mark and end up paying 35% taxes rather than 25%.

This sounds like somebody who doesn't understand how tax brackets work. You only pay the higher rate on the upper levels of income.

 

[mildocjr]

There's nothing "under the table" about it - it's direct reimbursement for use of a personal vehicle for business purposes. It's no different at all from claiming mileage on your expenses, you simply get reimbursed with no taxes taken out. It's IRS-approved.
[doublepost=1462453979][/doublepost]

This sounds like somebody who doesn't understand how tax brackets work. You only pay the higher rate on the upper levels of income.

Sorry, should have said tax deductions although both do the exact same thing, they lower your annual income by reporting "losses", ~18,000 is 10%, ~37,500 is 25% ~82000 is 35% and over 135,000??? is 45%. I'd say I know quite a bit about tax brackets considering I was in the 25% working overtime and putting me into the 35% tax bracket so I'd have to make deductions and write-offs to get me back into 25%. I've fought both sides of the equation. I know very well that you pay the higher rate on the upper levels of income but when your income is that high, you can still have deductions to make it appear on paper that you earned much less, for example that old sofa is a $200 deduction when given to charity, the wardrobe from 2 years ago could probably net you $100 more. Interest on student loans is deductible. Not to mention the standard deduction of ~3,250 as long as your deductions don't go over that amount you get it. I have a few friends in finance who school me every year on new stuff I didn't already know. This is just an over simplified explanation of deductions and how to lower your taxable income to fit in a different tax bracket.

 

[colourfastt]

What happens if that vehicle is in an accident while delivering for the company? Is the company responsible, or is the private individual?

Typically the company has insurance that covers the accident, although they may have loopholes that make the individual responsible in certain cases. (DUIs)

My sense is that in the US there is a growing body of corporate thought which seeks to offload the cost of employment entirely onto the consumer, or, failing that, onto the employee.

In a nutshell, yes, however, the company still has to handle the on boarding processes for new hires with the HR department.

Benefits (such as sick pay, pensions, maternal leave, holiday pay) are eroded, while salaries are cut to the bone, and would be abolished outright if some companies thought they could get away with this.

The biggest mistake that I've seen in businesses where I'm at are businesses pushing Salary (not hourly) pay at $15 an hour. Usually this means that this person is going to work over 40 hours but still receive the same pay, it's a loophole, IMO Salaried workers should not make less than $40,000 a year and if I'm correct, a law has been passed that forces Salaried workers to make at least $51,500.

The US economy can eat someone alive if they don't know what to watch out for, at the same time with the way it's set up, played right there is no limit to a worker's income, in the end it's just taxes that bite you and what most Americans gripe about, but people usually write a lot of stuff off on their taxes just to drop them to the next tax bracket. The current tax bracket information is available on the IRS website, it just gets difficult for people to write of $12,500 if they make $50,000 a year to get out of the 35% tax bracket. Likewise, people who work hourly for $37,000 who end up working overtime might go over that $37,500 mark and end up paying 35% taxes rather than 25%.

Hourly/salary are just pay methods; they, in and of themselves, don't determine whether or not an employee is exempt from the overtime laws. For example, given this thread, if a pizza delivery driver were to be paid salary, said driver would still be required to be paid overtime for all hours WORKED in excess of 40 in the work week (note: work week not calendar week; it must be a fixed 7 day period).

 

[mildocjr]

Hourly/salary are just pay methods; they, in and of themselves, don't determine whether or not an employee is exempt from the overtime laws. For example, given this thread, if a pizza delivery driver were to be paid salary, said driver would still be required to be paid overtime for all hours WORKED in excess of 40 in the work week (note: work week not calendar week; it must be a fixed 7 day period).

Overtime for salaried workers up until $51,500 if I'm not mistaken. After $51,500 the employee's overtime pay is optional. I know this because I don't fit the bill and make the same amount regardless of if I work 40 hours or 80 hours a week and there is little I can do besides find another job.

 

[Tomorrow]

This is just an over simplified explanation of deductions and how to lower your taxable income to fit in a different tax bracket.

My point is that there's no benefit to "fitting in a different tax bracket."

For a single filer, the first $9,275 of taxable income is taxed at 10%, regardless of your total taxable income.
Taxable income more than $9,275 but less than $37,650 is taxed at 15%, regardless of your taxable income.
Taxable income over $37,650 but less than $91,150 is taxed at 25%, regardless of your taxable income.
And so on.

This is true even if your taxable income is in the millions of dollars. There's no benefit to "fitting in a different tax bracket," because your income in those brackets is always taxed at those rates. The only benefit is reducing your taxable income to reduce the absolute number of dollars in tax you owe; it doesn't change your tax rate. The deductions and write-offs are no more or less valuable because they do or don't change your top bracket.

Source: http://taxfoundation.org/article/2016-tax-brackets

 

[mobilehaathi]

There's nothing "under the table" about it - it's direct reimbursement for use of a personal vehicle for business purposes. It's no different at all from claiming mileage on your expenses, you simply get reimbursed with no taxes taken out. It's IRS-approved.

Paid in cash everyday, eh? Okay, I'll take your word for it. My experience with such tax-free reimbursements required a bit of complication in order to make a 'paper' trail (and, incidentally, to allow for a private entity to make an easy buck).

 

[Tomorrow]

Paid in cash everyday, eh? Okay, I'll take your word for it. My experience with such tax-free reimbursements required a bit of complication in order to make a 'paper' trail (and, incidentally, to allow for a private entity to make an easy buck).

Because of tracking who delivered which orders - which is necessary to even determine how much the employee gets reimbursed - it meets all the requirements of an accountable plan under IRS guidelines.

 

[mildocjr]

My point is that there's no benefit to "fitting in a different tax bracket."

For a single filer, the first $9,275 of taxable income is taxed at 10%, regardless of your total taxable income.
Taxable income more than $9,275 but less than $37,650 is taxed at 15%, regardless of your taxable income.
Taxable income over $37,650 but less than $91,150 is taxed at 25%, regardless of your taxable income.
And so on.

This is true even if your taxable income is in the millions of dollars. There's no benefit to "fitting in a different tax bracket," because your income in those brackets is always taxed at those rates. The only benefit is reducing your taxable income to reduce the absolute number of dollars in tax you owe; it doesn't change your tax rate. The deductions and write-offs are no more or less valuable because they do or don't change your top bracket.

Source: http://taxfoundation.org/article/2016-tax-brackets

15% tax on $37,499 leaves you with $31,874.15 yearly income.
25% tax on $37,500 leaves you with $28,125.00 yearly income.

That's a $3749.15 difference in a single dollar of income.

If there wasn't a benefit to reducing your taxable income no one would do it, it wouldn't be heard of.

Need I say more?

 

[C DM]

15% tax on $37,499 leaves you with $31,874.15 yearly income.
25% tax on $37,500 leaves you with $28,125.00 yearly income.

That's a $3749.15 difference in a single dollar of income.

If there wasn't a benefit to reducing your taxable income no one would do it, it wouldn't be heard of.

Need I say more?

Except, as mentioned, that's not how tax brackets work:

http://blog.taxact.com/how-tax-brackets-work/

http://www.thesimpledollar.com/dont-fear-the-higher-tax-bracket-or-why-a-reader-needs-more-cowbell/

 

[Beerstalker]

It's no different with any other job where you may have to drive your personal vehicle and get reimbursed for it. For example if my company asks me to drive out to a customer's location for a meeting, they can either provide me with a company car, rental car, or pay me $0.57/mile (2015 reimbursement rate published by the IRS). If I drive my car and they pay me $0.57/mile that money is not taxable.

15% tax on $37,499 leaves you with $31,874.15 yearly income.
25% tax on $37,500 leaves you with $28,125.00 yearly income.

That's a $3749.15 difference in a single dollar of income.

If there wasn't a benefit to reducing your taxable income no one would do it, it wouldn't be heard of.

Need I say more?

That's not how it works. You would pay 15% tax on the first $37,499, and then 25% tax on that last $1. So you would bring home $31,874.90 ($31,874.15 + $0.75).