Servers Petition Employers to Bring Back Automatic Gratuities, Citing Major Pay Cut

March 17, 2016

Many say their paychecks have been drastically affected by new IRS rules

Anyone who’s ever dined out has noticed the fine print at the bottom of their menu: “An 18 percent gratuity will be added to parties of six or more.” Restaurants have historically tacked on an automatic gratuity, as it’s called, to ensure servers don’t get stiffed on large tabs. But all that changed in 2014, when the IRS changed how such income was taxed: Under the new rule, said auto-grats are classified as regular wages rather than tips, meaning it’s up to restaurants to withhold payroll taxes from…