QM2 gratuities

[Margana]

Unlike Cunard, HAL calls it a "hotel service charge". Nowhere is it defined as "discretionary." However, as stated on their website: "If our service exceeds or fails to meet your expectations, you are free to adjust this amount at the end of each segment and/or voyage." It does not say that one is free to remove it simply because they don't want to pay it.

 

Those of us who prefaced our comments with the note that we were referring to HAL's policies, have reason to warn others that Cunard may or may not follow a similar policy. If one is comfortable with denying the crew (which includes behind the scenes workers) with the service charge, that is their decision. The overwhelming feeling, however, on the HAL board is that it is unfair to the unseen workers and removing the service charge is nothing less than being tight. We have hotel service charges for land hotels; why not ship hotels.

 

However discretionary Cunard's policy may be, we will follow our usual policy of paying the service charge on our crossing next May on the QM2. We are so looking forward to experiencing this ship.

 

In the USA, the minimum wage is $7.25/hour. Where an employee regularly receives more than $30/month in tips, an employer can pay $2.13/hour allowing a ‘tip credit of $5.12/hour.

In the UK, the minimum wage is £6.50 ($9.75)/hour. Tips cannot be used towards the minimum wage.

In both countries it appears that service charges can be used towards the minimum wage.

This probably goes some way to explain the difference in attitude towards tipping in each country.

Perhaps if USA labour law was improved to remove the reliance on tipping, (as in UK), there would be less inclination by some to use words like “tight” to describe those passengers who choose to remove discretionary auto-gratuities and tip independently.

[Salacia]

In the USA, the minimum wage is $7.25/hour. Where an employee regularly receives more than $30/month in tips, an employer can pay $2.13/hour allowing a ‘tip credit of $5.12/hour.

In the UK, the minimum wage is £6.50 ($9.75)/hour. Tips cannot be used towards the minimum wage.

In both countries it appears that service charges can be used towards the minimum wage.

This probably goes some way to explain the difference in attitude towards tipping in each country.

Perhaps if USA labour law was improved to remove the reliance on tipping, (as in UK), there would be less inclination by some to use words like “tight” to describe those passengers who choose to remove discretionary auto-gratuities and tip independently.

 

In the USA, the minimum wage varies by State. For example, where I live, the minimum wage is currently $8.75 and will increase to $9.00 in December. Minimum wages for all States can be found here: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

 

Neither the UK nor USA minimum wage laws being discussed apply to cruise ships not registered in either country, therefore wages are most often lower on those ships. Perhaps this has something to do with why tipping has been a custom on cruise ships for a very long time? -S.

[Normandie_Nostalgic]

I come from a non-tipping culture. My wife is from a very tip-friendly culture. The auto-tipping policy on Cunard ships satisfies neither of us. I do feel that Cunard should pay its people properly and spare us the hassle, and she feels that it is not good to let Cunard apportion the tips, as she’d rather do it herself. We used to leave the autotip on (and argue about it), but on our recent QM2 cruise, we chose a good working compromise. We opted out at the purser’s office (no question asked, they did not blink an eyelid about it) and handed out envelopes within the exact same budget as suggested by Cunard to those staff members with whom we had built a rapport (some genuinely do try much harder than others, in a genial way). We also commended some staff members, using the forms provided, as one additional way to convey appreciation and help their career progression in a way that a tip alone could not do.

[Yoshikitty]

Hmm, what about the people "behind the lines" whom you've never seen but made your trip enjoyable (such as additional cleaning aids, people who are washing your bedsheets, cleaning your dishes, preparing the food for your meals, carried your luggage in and out and so on)?

 

Just because you haven't seen them does not mean that they have been working their butts off to make your vacation enjoyable.

 

I hope that those, who received your tips directly shared them with the people supporting them.

Edited May 20, 2015 by Yoshikitty

[Normandie_Nostalgic]

That’s a very fair point, that I have made to the wife at the time. Her view is that all staff on board are doing a good job, which is true, we never had any ground for the slightest complaint, and are being paid by Cunard hopefully properly, with no need for a tip as an incentive. After all, there is middle management to keep staff doing their job properly. Passengers do not need to bribe the crew to entice good service. Her logic is rather that the thing that she wants to reward is the personal touch, the extra mile, the attention, the rapport, that unfortunately those crew members away from passenger contact do not have a chance to demonstrate. Also, who can trust Cunard ? They deliberately maintain opacity and secrecy about their tipping scheme, as this kind of thread is a proof of.

 

There is no perfect system, as long as this infernal tipping is not abolished, but at least with this one, I do not feel bad because we are spending on tips exactly as much as we would if we let Cunard do it, and she feels good because she can reward directly, and quite generously in fact, those selected few who individually contributed to the enjoyment of our cruise.

[Margana]

In the USA, the minimum wage varies by State. For example, where I live, the minimum wage is currently $8.75 and will increase to $9.00 in December. Minimum wages for all States can be found here: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

 

Neither the UK nor USA minimum wage laws being discussed apply to cruise ships not registered in either country, therefore wages are most often lower on those ships. Perhaps this has something to do with why tipping has been a custom on cruise ships for a very long time? -S.

 

The point I was trying to make is that in service industries in USA (restaurants, hotels etc.), tips can be used by an employer towards payment of the minimum wage, and patrons will probably know this and tip accordingly. It’s a culture of tipping. It’s not really relevant what the value of the minimum wage is. If an employer in USA can legally pay an employee who receives tips only $2.13/hour, i.e. about $700/month for a 7day 12 hour working week, it’s not surprising that tips are important and are expected, even obligatory. In UK there is a different attitude towards tipping. Tips legally cannot be used by an employer to supplement minimum wage, they are a bonus to the employee for good service and do not engender the same degree of moral indignation so often brandished by those critical of removal of auto-gratuities. I wonder if those in the latter group ever lobby for improvement of the working conditions in service industries by removal of the reliance on tips towards wages.

I understand your point about ship registration which enables companies to pay low wages. In a previous post I made a stab at guessing how much tips could contribute to wages and it seems significant. The company should have the responsibility to pay decent wages, not the passengers through tips, and if that means a drop in dividends (heaven forbid), or a rise in fares, so be it.

[Yoshikitty]

and are being paid by Cunard hopefully properly,

 

Unfortunately, that's not the case (see post #43)

 

Also, who can trust Cunard ?

 

After various private conversations with several staff members, I have no reason to doubt that Cunard hands out the Auto Tip in full (or almost - less the Credit Card Fees).

Edited May 20, 2015 by Yoshikitty

[Margana]

Unfortunately, that's not the case (see post #43)

 

 

 

After various private conversations with several staff members, I have no reason to doubt that Cunard hands out the Auto Tip in full (or almost - less the Credit Card Fees).

 

Seems a bit contradictory. You seem clear that Cunard do not pay their staff properly, yet believe that auto tips are disbursed (with CC deduction) to staff.

Seems to support the contention that tips are a significant proportion of staff wages, i.e. a system that depends on the generosity or largesse of passengers which you don't appear to question.

[Yoshikitty]

There is nothing contradictionary.

 

If the staff would not receive the Autotips, noone (from the room/kitchen/restaurant staff) would be able to working for the fixed salary alone on a cruise ship...

 

And this applies to the entire industry.

 

As an example: Sommeliers don't get any fixed salary and are totally depending on the 15% tip. But they are helping out in King's Court in the morning with no extra pay.

 

Seems to support the contention that tips are a significant proportion of staff wages

correct

i.e. a system that depends on the generosity or largesse of passengers which you don't appear to question.

 

That's why there is an Auto-Tip and that's why swiping it off and handing tips only to the visible staff is not good for those who are behind the lines.

Edited May 20, 2015 by Yoshikitty

[Margana]

There is nothing contradictionary.

 

If the staff would not receive the Autotips, noone (from the room/kitchen/restaurant staff) would be able to working for the fixed salary alone on a cruise ship...

 

And this applies to the entire industry.

 

As an example: Sommeliers don't get any fixed salary and are totally depending on the 15% tip. But they are helping out in King's Court in the morning with no extra pay.

 

 

correct

 

 

That's why there is an Auto-Tip and that's why swiping it off and handing tips only to the visible staff is not good for those who are behind the lines.

 

It is contradictory. You believe the company deliberately pays low wages but becomes a model employer with regard to tips.

Anyway, the simple solution to stop continuing debate is for the company to stop auto-tipping. Auto-tips generate a total amount equal to the number of passengers x daily auto-tip rate x 365 for each ship. By increasing fares that same money could be generated, and wages increased. Then there would be no requirement for an opt-out option, no need to castigate people who may have chosen to opt out, and you can tip as you see fit.

[Normandie_Nostalgic]

So the situation is worse than I thought. Cunard is deliberately underpaying its staff, and has the passengers make up the balance of a fair wage, but has the irresponsibility of making it optional ? This is a system that is unsustainable. If more passengers were opting out, whether they still give tips, or they just cheapskate, then it will collapse under its own weight.

 

The crew is not made of galley slaves. If they cannot make ends meet with the salary alone, and the source of tips becomes too erratic, or their particular job puts them out of reach of the tips, then they will just stop working for Cunard. That will force the company to revise its policy, increase the salaries and get rid of that hellish tipping system.

[balf]

We have hotel service charges for land hotels; why not ship hotels.

 

/QUOTE]

 

You may, we (UK) generally don't, except in some London hotels.

 

David.

[Yoshikitty]

If they cannot make ends meet with the salary alone, and the source of tips becomes too erratic, or their particular job puts them out of reach of the tips, then they will just stop working for Cunard. That will force the company to revise its policy, increase the salaries and get rid of that hellish tipping system.

 

This does not only apply to Cunard, all Cruise Lines work like that.

[Yoshikitty]

By increasing fares that same money could be generated, and wages increased. Then there would be no requirement for an opt-out option, no need to castigate people who may have chosen to opt out, and you can tip as you see fit.

 

We are living in a free market, Cunard would not be able to realize higher prices because most of the people would only look at the sticker price.

 

All Cruise Lines operate like that - if we like it or not.

[Glenndale]

This does not only apply to Cunard, all Cruise Lines work like that.

 

ALL cruise lines do not operate like that, some cruise lines include gratuities and presumably pay their staff a fair wage.

[Normandie_Nostalgic]

We are living in a free market, Cunard would not be able to realize higher prices because most of the people would only look at the sticker price.

 

All Cruise Lines operate like that - if we like it or not.

 

That's quite true, but it's okay. Then all Cunard needs to do is to keep the tipping scheme, but simply remove the possibility to opt out from it. Airlines have a fuel surcharge, that sounds nearly as outrageous as the cruise industry's tipping policy.

 

It is the silliness of having a charge that is essential to the business model of the cruise industry, but that is presented as being optional and open to the interpretation and benevolence of passengers, that creates all the confusion and frustration.

[Margana]

We are living in a free market, Cunard would not be able to realize higher prices because most of the people would only look at the sticker price.

 

All Cruise Lines operate like that - if we like it or not.

 

Azamara, Crystal, Regent Seven Seas, Silversea, Saga, Thomson and Swan Hellenic all seem to survive offering all-in fares. Higher, yes, but since you advocate everyone paying auto-tips and bar service charges on top of the fare, the difference becomes less.

[Yoshikitty]

That's quite true, but it's okay. Then all Cunard needs to do is to keep the tipping scheme, but simply remove the possibility to opt out from it.

 

I am sure that a lot of advocates would love to sue Cunard and others for not giving the option to swipe the AutoTip.

 

And don't get me wrong - I don't like the Auto-Tip either and come from a country where tipping is not really common.

 

Instead of swiping the Auto Tip to save money, I'd rather downgrade to inside cabins in order to make sure that the crew is getting their deserved money

Edited May 20, 2015 by Yoshikitty

[Margana]

I am sure that a lot of advocates would love to sue Cunard and others for not giving the option to swipe the AutoTip.

 

And don't get me wrong - I don't like the Auto-Tip either and come from a country where tipping is not really common.

 

Instead of swiping the Auto Tip to save money, I'd rather downgrade to inside cabins in order to make sure that the crew is getting their deserved money

 

I don't understand. I give up.

[Salacia]

The point I was trying to make is that in service industries in USA (restaurants, hotels etc.), tips can be used by an employer towards payment of the minimum wage, and patrons will probably know this and tip accordingly. It’s a culture of tipping. It’s not really relevant what the value of the minimum wage is. If an employer in USA can legally pay an employee who receives tips only $2.13/hour, i.e. about $700/month for a 7day 12 hour working week, it’s not surprising that tips are important and are expected, even obligatory. In UK there is a different attitude towards tipping. Tips legally cannot be used by an employer to supplement minimum wage, they are a bonus to the employee for good service and do not engender the same degree of moral indignation so often brandished by those critical of removal of auto-gratuities. I wonder if those in the latter group ever lobby for improvement of the working conditions in service industries by removal of the reliance on tips towards wages.

I understand your point about ship registration which enables companies to pay low wages. In a previous post I made a stab at guessing how much tips could contribute to wages and it seems significant. The company should have the responsibility to pay decent wages, not the passengers through tips, and if that means a drop in dividends (heaven forbid), or a rise in fares, so be it.

 

Regarding the minimum wage for tipped workers in the USA: Again, it varies by State. Where I live, the minimum wage for tipped workers is not $2.13 as you stated, but rather $4.90 to $5.65 (depending on three categories of tipped jobs). In December, that will be increased to at least $7.50 per hour and the three tier system will cease.

 

As to you query "I wonder if those in the latter group ever lobby for improvement of the working conditions in service industries by removal of the reliance on tips towards wages" you might be interested in this article from The New York Times: http://www.nytimes.com/2015/02/25/nyregion/minimum-wage-for-new-york-citys-tipped-workers-will-increase-to-7-50.html?_r=0

 

Margana, I agree with you as no doubt most of do, that cruise ship workers should be paid a decent wage by their employers. In fact, I believe every hard working individual should be paid a decent wage and be protected against exploitation an unfair labor practices.

 

However, what constitutes a decent wage is also highly variable in different parts of the world. Parenthetically, I don't know how much money the tipped employees on Cunard ships make (anymore than they know how much I make :)) I only know that they work hard and since so many voluntarily renew their contracts, that seems to indicate there is some degree of satisfaction with their employment. Hopefully, improvements can and should be made as worldwide attention shifts to the underpaid and overworked amongst us - without bankrupting employers in the process. -Salacia

Edited May 20, 2015 by Salacia

[BlueRiband]

Another perspective from the board's industry insider:

 

Jocap,

 

I agree with you. We need a change. But that change will not be easy.

 

This entire concept of tipping in lieu of regular wages started on the White Star Line in Britain over 100 years ago. Although it has gone through many permutations, the original concept is still basically there; great service staff will receive plenty tips and be happy to stay on the job; poor service staff will not receive very much in the way of tips and be quite happy to leave.

 

But now it is much more complicated than it was a century ago.

 

Most of the tipped crew are not from Britain, but from all over the planet. Each one of the sometimes hundreds of nationalities represented in a ships crew has a different set of tax laws that apply to his or her earnings. In most of those countries, gratuities are not taxed, but earnings are. If passenger fares are increased to cover the gratuities, the total earnings of the service staff will all be taxable - in effect further reducing their salaries.

 

Currently most cruise lines pay tipped employees around US$1 per day plus tips. The staff's official salary is very low, meaning they have little or no tax liability in their home countries. If we change to a salaried system, many countries would not only require the crew to pay income taxes on all those earnings, but would also require the cruise lines to pay local payroll taxes on those total earnings. The cruise lines would be forced to increase your cruise fares much higher to cover the substantial financial losses by the crew and the cruise line companies.

 

Each one of the sometimes hundreds of nationalities represented in a ships crew is a member of a national maritime union - often from their home country. Each union has negotiated a contract with the cruise line, specifying benefits and earnings (including tips).

If the cruise lines change the system of paying their service staff, all the labor contracts with all the unions would have to be renegotiated, which could take decades.

 

My employer just finished a 3 year negotiation with a single labor union that represents about 15% of my crew. The issue was changing the day of the month they got paid. That was the only issue - nothing else.This took three years to negotiate. Can you imagine how long it would take - and how much it would cost - to change the entire earnings system for crewmembers represented by 20 different maritime unions in 20 different countries?

 

And if the tipping concept is removed, we are haunted by an age-old argument from our passengers. If the incentive of tipping is removed, and everyone has a guaranteed salary instead, where is the incentive to do a great job?

 

Recently enacted Maritime Labor Laws make it nearly impossible to fire a poor employee on a cruise ship. In many cases, if we are able terminate a poor performer, my company is hard-pressed to find a suitable replacement for him. We just do not pay enough anymore to attract top performers.

In most cases it is better to have a warm body doing a poor job, than nobody at all.

 

I still agree with you that some sort of change is desperately needed. But nobody seems to be able to come up with a change that will make the situation better - unless you and I are able to convince your fellow cruisers to pay a 100% surcharge on their cruise fare.

[Margana]

Regarding the minimum wage for tipped workers in the USA: Again, it varies by State. Where I live, the minimum wage for tipped workers is not $2.13 as you stated, but rather $4.90 to $5.65 (depending on three categories of tipped jobs). In December, that will be increased to at least $7.50 per hour and the three tier system will cease.

 

As to you query "I wonder if those in the latter group ever lobby for improvement of the working conditions in service industries by removal of the reliance on tips towards wages" you might be interested in this article from The New York Times: http://www.nytimes.com/2015/02/25/nyregion/minimum-wage-for-new-york-citys-tipped-workers-will-increase-to-7-50.html?_r=0

 

Margana, I agree with you as no doubt most of do, that cruise ship workers should be paid a decent wage by their employers. In fact, I believe every hard working individual should be paid a decent wage and be protected against exploitation an unfair labor practices.

 

However, what constitutes a decent wage is also highly variable in different parts of the world. Parenthetically, I don't know how much money the tipped employees on Cunard ships make (anymore than they know how much I make :)) I only know that they work hard and since so many voluntarily renew their contracts, that seems to indicate there is some degree of satisfaction with their employment. Hopefully, improvements can and should be made as worldwide attention shifts to the underpaid and overworked amongst us - without bankrupting employers in the process. -Salacia

 

I took my figures from the US Department of Labor Wage and Hour Division Fact Sheet 15 (Tipped Employees under the Fair Labor Standards Act) – thank you Google - and agree that the $2.13/hour is a minimum required cash wage. It was simply chosen to support an explanation for the differing attitude to tipping which people have. I have no knowledge of wage levels in USA, but it would be interesting to see if the frequency/level of tips drops off as the Tipped Employee wage increases, perhaps to that of other workers.

Thanks for link to NYT article. Good to know that fairness does prevail. My comment was more directed to whether those vocal (on the forum) about supporting cruise ship wages, were equally concerned about the similar position of others in their own communities.

Agree with your last two paras. I’ve just been trying to inject some transparency into the auto-tipping debate, look at the pretty significant amount of money it appears to involve, and offer an alternative which is financially acceptable and which will avoid the “To pay or not to pay, that is the question.....) debate. :rolleyes:

[alc13]

Thanks, everyone, for this extremely informative and helpful thread. I have a much better understanding now of why a perfect tipping policy is so difficult.

 

I'm often frustrated by tipping, but recognize it as a necessity, given compensation structures that rely on it. We are on the QV in a couple of weeks. A solution that works for us might be to increase the auto-tip near the end of the cruise if the service seems to warrant it. That way we will know it is distributed to everyone who helped make the voyage a success. (Plus, the envelope thing is personally awkward.)

 

Again, thanks to everyone's insights into the complications of cruise tipping.

[ToadOfToadHall]

So if BruceMuzz is correct then the reason for tipping is exactly as I have always suspected: It's a tax fiddle.

[BlueRiband]

So if BruceMuzz is correct then the reason for tipping is exactly as I have always suspected: It's a tax fiddle.

 

Can you imagine the local accounting nightmares? For example New York City, along with some other major US cities, charges visiting athletes income tax on the pro rata time that they play in New York. A baseball player coming into Yankee Stadium for a weekend series is thus taxed on that three days of his salary. This paperwork is handled by the accounting office of the visiting baseball team.

 

Now imagine if crew members on a ship had to pay local taxes on their salary for the day that they were in port! Believe me if a city revenue department decided if the amount collected it was worth their time they would go after it.