Does the ships crew really get !00% of the gratuities?

[Longwood50]

I saw today that both Carnival and Celebrity were raising their gratuities in 2020.  Celebrity will now have a 20% gratuity which when they raise the prices of their drinks will hit you twice.  That means a $15 drink will nick you $3.00 extra.  I find it difficult to believe with all the drinks a bartender serves that the cruise line passes on the full 20%.  Does anyone know if the cruise lines do indeed pass along 100% of the "gratuities" they collect or do they skim the pot?

[Shmoo here]

15 minutes ago, Longwood50 said:

I saw today that both Carnival and Celebrity were raising their gratuities in 2020.  Celebrity will now have a 20% gratuity which when they raise the prices of their drinks will hit you twice.  That means a $15 drink will nick you $3.00 extra.  I find it difficult to believe with all the drinks a bartender serves that the cruise line passes on the full 20%.  Does anyone know if the cruise lines do indeed pass along 100% of the "gratuities" they collect or do they skim the pot?

The "gratuities" are handled differently on each cruise line.

 

There's the Hotel Service Charge (also thought of as gratuities), that's typically pooled to be shared by stateroom hosts, dining room servers, and behind the scenes personnel (laundry and such).

 

Then there's the beverages auto gratuity that's added to any purchased beverages.  Typically it's pooled to be shared by all bartenders and beverage servers.

 

And, of course, spa services tend to have their own gratuities added to your service.

 

As far as I know, gratuities (and HSC) are distributed as noted on the cruise lines that I've been on.  The company doesn't take a cut.

 

 

[MicCanberra]

Of course, not all the gratuities go to the crew, some people visit guest services and have them removed.🤩

[MBP&O2/O]

Am I right in thinking that a couple of years ago one of the mainstream lines increased their daily ‘service charge’ by some 2.5% and openly admitted the increase would NOT be passed on but would be used for ‘essential’ crew expenses such as uniforms and such?

[Longwood50]

2 hours ago, Shmoo here said:

As far as I know, gratuities (and HSC) are distributed as noted on the cruise lines that I've been on.  The company doesn't take a cut.

Shmoo, 

 

No offense but I was hoping that someone would "definitively" say that the staff on the ship either does or does not receive 100% of the "tips" whether that is for beverages or daily housekeeping etc.  With drinks now in the $10 to $20 per drink range, I find it difficult to believe that the wait staff get the full 20%.  That would mean they would get between $2 and $4 for each drink served.  At that rate, I would work on a cruise ship.  They serve hundreds of drinks each hour. Lets face it, the cruise line has to "pay" the crew so they either have to collect "tips" and "daily gratuities" to do so or increase the price of the cruise.  I would just not like it that they are representing it as a fee for services rendered and then a portion of it going to the cruise line.  If it is a fee for housekeeping staff and beverage staff than 100% of it should go to them. 

 

Edited January 3, 2020 by Longwood50

[Flatbush Flyer]

2 hours ago, Longwood50 said:

I saw today that both Carnival and Celebrity were raising their gratuities in 2020.  Celebrity will now have a 20% gratuity which when they raise the prices of their drinks will hit you twice.  That means a $15 drink will nick you $3.00 extra.  I find it difficult to believe with all the drinks a bartender serves that the cruise line passes on the full 20%.  Does anyone know if the cruise lines do indeed pass along 100% of the "gratuities" they collect or do they skim the pot?

On sea, or on land, answering your question is just not as simple as "yes" or "no."

 

For example, if a service employee's share of a benefit cost (e.g., medical, retirement et al.) goes up when the total premium for that benefit increases, his/her employer may add a service surcharge to a customer's bill to pay that difference.

One could say that the increased service charge amount is not going directly into the pocket of the employee. But, neither is the increased employee contribution coming out of their pocket. 

In cases like this (not unusual in some major cities like SF), the "extra tip" directly benefits the employee by saving them from additional withholding.

 

As regards ship's crew: if part (or all) of an increased gratuity rate offsets a necessary  employee contribution increase due to something like benefits cost hikes, isn't the employee getting 100% of the value of the total gratuity? 

 

Of course, the employer/ship could choose to give the new total tip to the employee and then withhold the necessary higher employee contribution for benefits. But then the employee would have tax consequences related to a higher income reporting.

[Longwood50]

1 hour ago, Flatbush Flyer said:

For example, if a service employee's share of a benefit cost (e.g., medical, retirement et al.) goes up when the total premium for that benefit increases, his/her employer may add a service surcharge to a customer's bill to pay that difference.

Flatbush Flyer,

 

Sounds like for all intents all gratuities now go into a pool and cover the "costs" wages, benefits, travel etc of the staff.  If that is the case then really the gratuities are no different than the cruise fare. It goes into one big pot and whatever is left over after all expenses are paid goes to the cruise line.  I can tell you I have certainly noticed a decrease in attentiveness in the past decade as ship's personnel no longer receive their tips in cash but rather get them doled back from the cruise line.  This is particularly true in the dining room where you have no assigned table and waiter.  Why give "special" service when you will receive no more in terms of compensation than the worst server.  I certainly understand that the cruise lines need to cover the costs of their staff.  However if this "sharing" is true, what the cruise line is really doing is charging each passenger a per drink and per diem that really is compensation to the cruise line that they use to offset their staff costs.   Its like the U.S. government calling your social security taxes "contributions"  The gratuities are really not dedicated to compensate employees for their specific service to you.  Certainly if all cabin stewards and wait staff receive the same calling them "gratuities" is wordsmithing. 

[chengkp75]

You have hit the nail of the "DSC" right on the head.  While I have no knowledge of lines using the DSC to cover things like uniforms (and when I worked for NCL, uniforms were provided free), or any other "required items", the DSC is used as the major contributing factor in a crew's compensation package.  It is used for two reasons.  One, it allows the cruise lines to advertise the minimum possible cruise fare, by keeping the DSC as a "fine print" add on.  Two, it is used as the "carrot" in the carrot and stick method of crew management.  By pooling the DSC, the crew "self-enforce" good customer service, since one crew's poor performance affects them all.  And further, the cruise line can say that a reduction in crew salary caused by removal/reduction in DSC was not the cruise line's fault, the blame falls on the passengers.

 

The only "skimming" that I am aware of personally, is that NCL does take a small percentage of the DSC and use it for things like crew parties and enhancements to crew public spaces (gym, internet cafe, lounges) that the crew votes on.

[sparks1093]

2 hours ago, Longwood50 said:

Flatbush Flyer,

 

Sounds like for all intents all gratuities now go into a pool and cover the "costs" wages, benefits, travel etc of the staff.  If that is the case then really the gratuities are no different than the cruise fare. It goes into one big pot and whatever is left over after all expenses are paid goes to the cruise line.  I can tell you I have certainly noticed a decrease in attentiveness in the past decade as ship's personnel no longer receive their tips in cash but rather get them doled back from the cruise line.  This is particularly true in the dining room where you have no assigned table and waiter.  Why give "special" service when you will receive no more in terms of compensation than the worst server.  I certainly understand that the cruise lines need to cover the costs of their staff.  However if this "sharing" is true, what the cruise line is really doing is charging each passenger a per drink and per diem that really is compensation to the cruise line that they use to offset their staff costs.   Its like the U.S. government calling your social security taxes "contributions"  The gratuities are really not dedicated to compensate employees for their specific service to you.  Certainly if all cabin stewards and wait staff receive the same calling them "gratuities" is wordsmithing. 

Tipping pools are not all that uncommon, many land based establishments use them. The only time one doesn't have the same waitstaff/table is when you are using anytime dining or you are sailing on a line that doesn't have set dining times (such as NCL). When we sail Carnival or Royal we have a set dining time, an assigned table and assigned waitstaff. They have always provided excellent service. If you are experiencing less then expected service then you have the right to adjust your gratuities accordingly and provide the requisite feedback when you do so. There is a lot of peer pressure in places that use pooled tips because all of the employees know that the weakest link can adversely impact everyone which is one of the reasons that they are used, to enhance teamwork. 

Edited January 3, 2020 by sparks1093

[SRF]

4 hours ago, Longwood50 said:

With drinks now in the $10 to $20 per drink range, I find it difficult to believe that the wait staff get the full 20%.  That would mean they would get between $2 and $4 for each drink served.  At that rate, I would work on a cruise ship.  They serve hundreds of drinks each hour. 

 

But they also work 10 hours per day.  7 days a week.  For 6 - 9 months.

 

And their "pay" is quite low. 

 

Still want the job?  Then apply and get one.  Then come back and tell us how it worked out.

 

Remember, you seldom see people from first world countries working these jobs.  The pay is good based on 3rd world pay rates, but not first world pay rates.

[dogs4fun]

18 minutes ago, SRF said:

Remember, you seldom see people from first world countries working these jobs.  The pay is good based on 3rd world pay rates, but not first world pay rates.

Agree - we have never met staff from the US, UK, Canada, Australia, Germany, Norway, Denmark (or any other first world country) working on the ships we have sailed except in the very senior positions (the captain would fall under the senior position category).

[ontheweb]

3 minutes ago, dogs4fun said:

Agree - we have never met staff from the US, UK, Canada, Australia, Germany, Norway, Denmark (or any other first world country) working on the ships we have sailed except in the very senior positions (the captain would fall under the senior position category).

I would not consider assistant cruise directors as a "very senior" position. But, I have seen the position staffed by from first world countries.

[sparks1093]

3 minutes ago, ontheweb said:

I would not consider assistant cruise directors as a "very senior" position. But, I have seen the position staffed by from first world countries.

The two areas I've seen that are staffed from more developed countries are the kids clubs and the cruise director's staff (I put the ship's entertainers under that category but not sure if they are actually considered to be part of the CD's staff). 

[DirtyDawg]

5 hours ago, Longwood50 said:

Shmoo, 

 

No offense but I was hoping that someone would "definitively" say that the staff on the ship either does or does not receive 100% of the "tips" whether that is for beverages or daily housekeeping etc.  With drinks now in the $10 to $20 per drink range, I find it difficult to believe that the wait staff get the full 20%.  That would mean they would get between $2 and $4 for each drink served.  At that rate, I would work on a cruise ship.  They serve hundreds of drinks each hour. Lets face it, the cruise line has to "pay" the crew so they either have to collect "tips" and "daily gratuities" to do so or increase the price of the cruise.  I would just not like it that they are representing it as a fee for services rendered and then a portion of it going to the cruise line.  If it is a fee for housekeeping staff and beverage staff than 100% of it should go to them. 

 

 

But would they hire you? ☺️

 

 

[Schoifmom]

OK -- The disbursement of gratuities or service charges is governed by the contracts signed by the employees.  If a percentage of grats or SC is held back to provide for certain employee benefits, it is know and agreed to by the employee.  

 

Most mainstream cruise lines are US publicly traded corporations and subject to the Sarbanes-Oxley Act and, as such, must attest to the effectiveness of their internal controls, one of which is the correct collection and disbursement of funds to employees (think payroll and all associated deductions, allowances, accruals, etc.).  I am nearly certain that all grats and DC collected by these corporations are handled in accordance with the employee contracts.  If a portion is held by the corporation and not used in accordance with said contract for the benefit of the employee, then it becomes a financial reporting issue and subject to fines by the SEC.

[Schoifmom]

30 minutes ago, ontheweb said:

I would not consider assistant cruise directors as a "very senior" position. But, I have seen the position staffed by from first world countries.

 

28 minutes ago, sparks1093 said:

The two areas I've seen that are staffed from more developed countries are the kids clubs and the cruise director's staff (I put the ship's entertainers under that category but not sure if they are actually considered to be part of the CD's staff). 

 

Cruise Directors and Kid's Club staff are not part of the tipping pool.  On Carnival, the "fun squad" (entertainment staff) receive a very small portion of the daily gratuity charge, but not the Cruise Director, Entertainment Director, etc. (really anyone with "director" in their title).  Kid's Club staff are normally tipped voluntarily by those using their services and would share that grat.

[chengkp75]

4 minutes ago, Schoifmom said:

OK -- The disbursement of gratuities or service charges is governed by the contracts signed by the employees.  If a percentage of grats or SC is held back to provide for certain employee benefits, it is know and agreed to by the employee.  

 

Most mainstream cruise lines are US publicly traded corporations and subject to the Sarbanes-Oxley Act and, as such, must attest to the effectiveness of their internal controls, one of which is the correct collection and disbursement of funds to employees (think payroll and all associated deductions, allowances, accruals, etc.).  I am nearly certain that all grats and DC collected by these corporations are handled in accordance with the employee contracts.  If a portion is held by the corporation and not used in accordance with said contract for the benefit of the employee, then it becomes a financial reporting issue and subject to fines by the SEC.

While I agree with your first paragraph, I don't believe the second paragraph applies.  I don't believe the Sarbanes-Oxley Act applies to the ships.  While the parent corporation is a US traded corporation, each ship is owned and operated by a separate corporation, which is not a publicly traded corporation.  Crew are paid from the shipowning corporation, not the parent corporation, so I'm not sure the S-O applies.

[Schoifmom]

30 minutes ago, chengkp75 said:

While I agree with your first paragraph, I don't believe the second paragraph applies.  I don't believe the Sarbanes-Oxley Act applies to the ships.  While the parent corporation is a US traded corporation, each ship is owned and operated by a separate corporation, which is not a publicly traded corporation.  Crew are paid from the shipowning corporation, not the parent corporation, so I'm not sure the S-O applies.

 

Actually, using Carnival as an example, I reviewed their 10K SEC filing.  What you refer to as "separate corporation, which is not publicly traded" would not be accurate in this instance.  Even if that were the case, that "separate corporation" would be a wholly owned subsidiary whose financials would be consolidated into those of the parent corporation, making it subject to SOX.  In the case of Carnival, the brands under the Carnival corporate banner appear to be simply that, brands.  In this instance, there are no subsidiary corporation, only owned brands.  All assets are held by the Carnival Corporation.  It does appear that each is managed as a different "company," given that they present consolidated financials.  This would not be unusual in such a large corporation.  So, yes, the crew would paid from the individual segment.  That, however,  does not make any of the brands not subject to SOX.  

Edited January 3, 2020 by Schoifmom

[chengkp75]

While I am no corporate tax expert, I was not referring to the various brands under a parent corporation, each and every ship owned by Carnival is owned by a separate corporation, such as "Carnival Sunrise, LLC", and these corporations are not publicly traded, and are not incorporated in the US.  I don't know about the accounting part of the act, but the anti-discrimination part has been ruled to not apply to foreign subsidiaries of US publicly traded corporations.  But, this goes a bit far afield from the OP's question.

[Nic6318]

5 hours ago, Longwood50 said:

Flatbush Flyer,

 

Sounds like for all intents all gratuities now go into a pool and cover the "costs" wages, benefits, travel etc of the staff.  If that is the case then really the gratuities are no different than the cruise fare. It goes into one big pot and whatever is left over after all expenses are paid goes to the cruise line.  I can tell you I have certainly noticed a decrease in attentiveness in the past decade as ship's personnel no longer receive their tips in cash but rather get them doled back from the cruise line.  This is particularly true in the dining room where you have no assigned table and waiter.  Why give "special" service when you will receive no more in terms of compensation than the worst server.  I certainly understand that the cruise lines need to cover the costs of their staff.  However if this "sharing" is true, what the cruise line is really doing is charging each passenger a per drink and per diem that really is compensation to the cruise line that they use to offset their staff costs.   Its like the U.S. government calling your social security taxes "contributions"  The gratuities are really not dedicated to compensate employees for their specific service to you.  Certainly if all cabin stewards and wait staff receive the same calling them "gratuities" is wordsmithing. 

 

 

Hi

 

I have read your comments this far, and I am still trying to understand if there is some sort of complaint here. 

 

Ultimately, all the monies we give to the cruise companies is handled by them (to make them profitable). Some of these monies that are collected under the "guise" of tips. We are aware of what they (the companies) tell us, we are not aware of what they don't. Some threads on this site have been started by people who have worked for cruiselines. They tell us things that may be 100% accurate or may not. 

 

Either way, the monies they take in, apart from making the companies profitable, also have to pay for everything including salaries. Except for those people who are trying to get out of paying tips (where they are expected) because they have found a loophole (just not giving), the companies have found a way for them to best find a balance that works best for them in this tips/pay equation. Of course however this works, I imagine it would be to the companies best financial interest. But, I have to remind everyone that the better the companies do, the better they can compensate their employees, and the better the value will be that they offer their customers. This is normal for any business in any sector.

 

I don't understand why people feel that how the companies disperse their money should be of any interest to it's customers (normally). This interest isn't apparant anywhere else. If you are curious about how much you can make working on a cruise ship, then I would suggest you apply. We the customers pay all of the cruise lines employee salaries, not just the waiters or cabin stewards, we are paying the millionaire CEO too. If you see a problem with any aspect of a trip you have taken in the past, then consider a different company in the future. What's that got to do with who is getting the "tips". 

[awhcruiser]

2 hours ago, Schoifmom said:

OK -- The disbursement of gratuities or service charges is governed by the contracts signed by the employees.  If a percentage of grats or SC is held back to provide for certain employee benefits, it is know and agreed to by the employee.  

 

Most mainstream cruise lines are US publicly traded corporations and subject to the Sarbanes-Oxley Act and, as such, must attest to the effectiveness of their internal controls, one of which is the correct collection and disbursement of funds to employees (think payroll and all associated deductions, allowances, accruals, etc.).  I am nearly certain that all grats and DC collected by these corporations are handled in accordance with the employee contracts.  If a portion is held by the corporation and not used in accordance with said contract for the benefit of the employee, then it becomes a financial reporting issue and subject to fines by the SEC.

What does any of this have to do with tipping?

 

[awhcruiser]

9 hours ago, MicCanberra said:

Of course, not all the gratuities go to the crew, some people visit guest services and have them removed.🤩

Are you speaking from personal experience?

[sparks1093]

25 minutes ago, awhcruiser said:

Are you speaking from personal experience?

Do you doubt that it happens? I don't. We had one couple that dined with us who said (like a public service announcement) on the 6th night, "you can save over $200 on this cruise, just go to guest services and have them remove the tips".

[Schoifmom]

31 minutes ago, awhcruiser said:

What does any of this have to do with tipping?

 

 

If the corporation failed to maintain an effective system of internal controls, meaning that they fail to appropriately account for pass through payments to the crew, this would have to be reported to the SEC.  Corporations do NOT want SOX deficiencies to be reported in their 10K as it does not look good to the shareholders and potential shareholders.

 

In other words, it is in the corporation's best interest to ensure that monies collected for the employee benefit (gratuities and service charges) are appropriately disbursed to the employees according to their contracts.

[notalandlover]

3 hours ago, Schoifmom said:

OK -- The disbursement of gratuities or service charges is governed by the contracts signed by the employees.  If a percentage of grats or SC is held back to provide for certain employee benefits, it is know and agreed to by the employee.  

 

Most mainstream cruise lines are US publicly traded corporations and subject to the Sarbanes-Oxley Act and, as such, must attest to the effectiveness of their internal controls, one of which is the correct collection and disbursement of funds to employees (think payroll and all associated deductions, allowances, accruals, etc.).  I am nearly certain that all grats and DC collected by these corporations are handled in accordance with the employee contracts.  If a portion is held by the corporation and not used in accordance with said contract for the benefit of the employee, then it becomes a financial reporting issue and subject to fines by the SEC.

 

 

 

I heard lots of people say  the crew has a contract that provides them a guaranteed wage.  Iv'e often wondered if the cruise lines are using the gratuities to pay the  employees contract wage first over the entire fleet.  The crew across the fleet probably get a small percentage of the gratuities back above their contract wage for whatever is left over.