I once thought it was unfair for auto-gratuities to be added onto large parties. What if the waiter(s) wasn't on their game? Why do we have to pay an X% tip automatically?
Turns out it's because restaurant-goers are kind of jerks, and without auto-tips, large tables tend to generate smaller tips (and not for any less work). Which ties into the general irrationality around tipping in restaurants that exists in most cases.
Well, the days of automatic gratuities are ending. A new IRS rule, with some justification, considers auto-tips to be actual pay (since they are a calculated amount automatically provided to the waiter), and that meant restaurants would have to go to the bother and expense of additional tax withholding, SSI, etc. (it also then affected overtime pay, too). So restaurants are basically doing away with the practice, to the obvious chagrin of waiters.
Another reason to go to fixed payroll for waitstaff and end dependence on tipping to keep waiters out of poverty.
Restaurants have changed how tips work, and waiters are furious
A common form of tipping is on its way out.
Some progress is good progress…. But http://m.huffpost.com/us/entry/5991796
+Clinton Hammond Good article; tipping is highly problematic, and the stuff I was writing about was how it's more problematic than ever.
(I knew, btw, that the federal minimum wage for tipped employees was low, but I was unaware that it was no longer coupled to the federal minimum wage for the rest of the population. That really sucks.)