New IRS policy prompts some area restaurants to stop automatic tip

A new IRS policy is changing the way restaurants handle customer tips.

Effective January 1st, if a restaurant adds the tip automatically, which is usually the case for large parties, servers won't take that money home right away.

Instead, the policy requires that restaurants count the money as part of a server's hourly wage, which wouldn't hit their pockets until payday.

The IRS policy passed in 2012, but did not take effect until New Year's Day.

At Charleston's 82 Queen restaurant, they've decided to stop the automatic tip altogether, leaving it up their customers to decide how much is enough.

"We've taken the position that our customers will continue to treat our servers well, and vice versa, our servers will continue to treat our customers well," said Jonathan Kish, 82 Queen's Chief Financial Officer.

The restaurant stopped adding tips automatically as recently as Monday.

"These groups, they're used to it in most restaurants, so it will be a re-training of our customers a little bit as well as our servers," he said.

82 Queen is one of more than 140 Lowcountry eateries scheduled to participate in Charleston Restaurant Week.  Kish says they see an increase of 20 to 150 percent in business.

"We will see a lot of larger parties in the next week and a half, so that will be the test period of our new procedures."

Copyright WCSC 2014.  All rights reserved.