% of guests who remove gratuities

[tunafish]

4 hours ago, crazyank said:

I certainly hope not!

two days ago I saw a guy giving $5 to a customer service officer after asking her is she saw a hat he lost at the pool... they did not have his hat

[Buckeyefrank100]

1 hour ago, tunafish said:

no one gets any fraction of the tips. They get salary and they get some perks from good reviews and personal mentioning their names in a form of points that you accumulate and redden for perks from money to time off and such. Typical corporation. I am originally from the country where some food and beverage and occasional housekeeping crew is from and had this convo multiple times. Everyone is happy to get an extra buck and they get it a lot because americans love to spray people with money on vacations

Are you saying the crew doesn't receive the charged tips or am I reading your comments wrong?

[tunafish]

5 minutes ago, Buckeyefrank100 said:

Are you saying the crew doesn't receive the charged tips or am I reading your comments wrong?

you are correct. All of them told me "we just get a paycheck", last interaction was with an asst waiter who is on her first contract and learning how to navigate the system. nothing in their paycheck states "gratuity" just the paycheck. if you put $20 in her pocket - this is her money above and beyond her salary. plain and simple. Pax feedback and survey marks adds to intradepartment recognition and earn them crew perks. I am always surprised people think otherwise. 

[Buckeyefrank100]

24 minutes ago, tunafish said:

you are correct. All of them told me "we just get a paycheck", last interaction was with an asst waiter who is on her first contract and learning how to navigate the system. nothing in their paycheck states "gratuity" just the paycheck. if you put $20 in her pocket - this is her money above and beyond her salary. plain and simple. Pax feedback and survey marks adds to intradepartment recognition and earn them crew perks. I am always surprised people think otherwise. 

Sorry, but that is impossible.  They are a public corporation with operations in the United States.  They are required to conduct an annual financial audit to ensure their financial statement, notes and supplementary disclosures are properly stated.  When RCI collects payments under the name of Service Charge, Tips, etc and the literature states it is distributed to the crew, it certainly is.  The auditor is required by GAAS to reasonably ensure of this. 

 

It may not show up on the employees paycheck as "tips", but 100% of that money is going to the employees.  Some of it may be pooled for events, parties, special recognition, etc. but it all goes to the employees.  There are hundreds of scenarios which would explain it not saying tip on their paycheck.  They could be promised a minimum of tips per day and call it a draw.  In that situation, tips collected by the CL less than guaranteed to the employee could be covered by the corp.  It's a common sales setup in the US.  The other possibility is that the asst waiter hasn't received gratuities yet because they may be distributed after a period of time...  monthly, at the end of the contract, etc.  My guess is, the employee you were talking to was either trying to make you feel bad for him / her to give an additional tip, misunderstood what you were asking or simply hasn't been there long enough to receive the gratuity payment.

 

And even if you were correct and the corporation kept 100% (which they don't) of the gratuity, it still doesn't matter because the asst waiter agree to the wages before they started working.  It's a contract between the employee and employer.  I personally couldn't care less what they're making.  I don't care what the cruise director or even CEO is making.  It makes zero impact in my life.  I keep the DSC on because that's what they're asking for.  Simple.

Edited March 9, 2023 by Buckeyefrank100

[tunafish]

11 minutes ago, Buckeyefrank100 said:

Sorry, but that is impossible.  They are a public corporation with operations in the United States.  They are required to conduct an annual financial audit to ensure their financial statement, notes and supplementary disclosures are properly stated.  When RCI collects payments under the name of Service Charge, Tips, etc and the literature states it is distributed to the crew, it certainly is.  The auditor is required by GAAS to reasonably ensure of this. 

 

It may not show up on the employees paycheck as "tips", but 100% of that money is going to the employees.  Some of it may be pooled for events, parties, special recognition, etc. but it all goes to the employees.  There are hundreds of scenarios which would explain it not saying tip on their paycheck.  They could be promised a minimum of tips per day and call it a draw.  In that situation, tips collected by the CL less than guaranteed to the employee could be covered by the corp.  It's a common sales setup in the US.  The other possibility is that the asst waiter hasn't received gratuities yet because they may be distributed after a period of time...  monthly, at the end of the contract, etc.  My guess is, the employee you were talking to was either trying to make you feel bad for him / her to give an additional tip, misunderstood what you were asking or simply hasn't been there long enough to receive the gratuity payment.

 

And even if you were correct and the corporation kept 100% (which they don't) of the gratuity, it still doesn't matter because the asst waiter agree to the wages before they started working.  It's a contract between the employee and employer.  I personally couldn't care less what they're making.  I don't care what the cruise director or even CEO is making.  It makes zero impact in my life.  I keep the DSC on because that's what they're asking for.  Simple.

you are 100% correct and I am sure they have an awesome legal team to make them 100% correct and they indeed may end up paying this money. they collect from us, apply them to payroll and give it to crew. all fair and square. but this is not the money ABOVE your paycheck as one would think of tips. and yes, they agree on a salary and they are getting it. no matter what is the source of the funds. All I was trying to say that the sentiment of tips in a form of auto gratuity or even worse prepaid tips is fundamentally flawed. All we do is support the revenue of the company. They are also NOT a US corporation and there is a reason they sail under flag of convenience. Crew definitely does not file taxes in US. Their docs are not licensed in US or Canada (unless they come from there), their medicine is not regulated by USDA. They ARE certified by US Coast Guard and CDC as they operate in US ports. 

Coming back to tips there is a reason regarding companies are not transparent about them. I am sure huge part of it and another reason one can remove the tips is taxation of this revenue. Taxes on that chunck of cash must be much lower, since this revenue is NOT guaranteed.

 

[Buckeyefrank100]

9 minutes ago, tunafish said:

you are 100% correct and I am sure they have an awesome legal team to make them 100% correct and they indeed may end up paying this money. they collect from us, apply them to payroll and give it to crew. all fair and square. but this is not the money ABOVE your paycheck as one would think of tips. and yes, they agree on a salary and they are getting it. no matter what is the source of the funds. All I was trying to say that the sentiment of tips in a form of auto gratuity or even worse prepaid tips is fundamentally flawed. All we do is support the revenue of the company. They are also NOT a US corporation and there is a reason they sail under flag of convenience. Crew definitely does not file taxes in US. Their docs are not licensed in US or Canada (unless they come from there), their medicine is not regulated by USDA. They ARE certified by US Coast Guard and CDC as they operate in US ports. 

Coming back to tips there is a reason regarding companies are not transparent about them. I am sure huge part of it and another reason one can remove the tips is taxation of this revenue. Taxes on that chunck of cash must be much lower, since this revenue is NOT guaranteed.

 

You can stop with the 'corporations are evil' schtick.    

 

The ships are registered overseas (Bahamas I believe) and I agree it's a flag of convenience.  They are a public company in the US and are required to have financial audits.  

 

I never said anything about taxes that the employees may or may not be paying or any documents they need or where the doctors are licensed in.  I don't care.

 

My point is that you or I have no idea how the "tip", "gratuity" or "service charge" works so you have no idea if it is fundamentally flawed.  What does fundamentally flawed even mean?  To me that would mean, they would have fundamental problems obtaining workers.  Their ships are full of workers so I wouldn't say it's fundamentally flawed.  If the asst waiter was mislead, he / she can simply leave the ship.  

 

I have no idea what you're point is that you're trying to make in the last paragraph.  But revenue is not taxed differently because it is guaranteed or not....  and the DSC doesn't get counted as revenue for the cruise line.  It goes to the employee.

 

The fact that Royal Caribbean (or any other cruise line) doesn't tell you exactly how tips are distributed doesn't mean it's fundamentally flawed...  Does Eddie Merlot Steakhouse or the Cracker Barrel tell you how the tips are distributed amongst the staff?  Of course not.  The servers are generally required to share that with other staff such as busboy, bar tending staff, cooks, etc.  Is Eddie Merlot's tip process fundamentally flawed because they don't tell you who gets what of your tip?  Nope.

[Ret MP]

On 2/25/2023 at 11:15 AM, taglovestocruise said:

 waitstaff and room stewards turn that amount you give them into the ships tip pool. 

I totally agree with the premise.  However, that is only true if the waitstaff and/or Steward(s) are honest.  That's not an indictment, I'm sure the vast majority of them are honest people.  But, there is that 10%.

[cruiseboy89130]

20 hours ago, dunrobbin said:

Just noticed in the app, under need to know, it says

"Please note that guests using My Time Dining, may NOT opt out of gratuities"

I did not know that.

Alternative fact!

[DamonG]

As many have mentioned, the crew signs a contract. My question is, let's say a waiter signed a contract for 52K/year. Are tips additional money to that 52K/year, or is Royal using the pool of tip money to pay that crew member his contract of 52K?

[cruiseboy89130]

1 hour ago, Buckeyefrank100 said:

They are a public corporation with operations in the United States. 

They are NOT in the US!

[Cruiser_1977]

The current parent corporation, Royal Caribbean Cruises Ltd., was incorporated on July 23, 1985 in the Republic of Liberia under the Business Corporation Act of Liberia (https://www.sec.gov/ix?doc=/Archives/edgar/data/884887/000088488723000006/rcl-20221231.htm). Here is an article on the US income tax filing, or not, of the cruise lines. Most are NOT incorporated in the United States; however, may have offices/headquarters here. https://cruiseradio.net/fact-check-do-cruise-lines-pay-us-taxes/

[Ret MP]

25 minutes ago, cruiseboy89130 said:

They are NOT in the US!

Their world HQ is in Miami.  The ships are "registered" in the Bahamas, at least some or many, a tax gimmick.  They have many many many regulations and laws, including tax laws, that apply to them on the ships that cruise out of and/or visit U.S. ports and have U.S. citizens/residents working for them on their cruise ships.  

 

EDITED IN:  Yes, RCCL is incorporated in Liberia.  

 

https://www.royalcaribbeangroup.com/contact-us/

 

Edited March 9, 2023 by Ret MP
Forgot to say

[Ret MP]

43 minutes ago, JennyB1977 said:

The current parent corporation, Royal Caribbean Cruises Ltd., was incorporated on July 23, 1985 in the Republic of Liberia under the Business Corporation Act of Liberia (https://www.sec.gov/ix?doc=/Archives/edgar/data/884887/000088488723000006/rcl-20221231.htm). Here is an article on the US income tax filing, or not, of the cruise lines. Most are NOT incorporated in the United States; however, may have offices/headquarters here. https://cruiseradio.net/fact-check-do-cruise-lines-pay-us-taxes/

I'm not a lawyer and some of the references here and others are very technical legal readings.  However, I think the premise of the discussion is on "Income Tax", "Individual Income Tax.  From what I've read, and I freely admit that I may be wrong, the income tax referenced in the links pertains to Corporate income, not personal/individual income.  And, again I could be wrong, the U.S. does require all U.S. Citizens and Residents to file and pay their legal obligation of taxes (which could be none).  If the employer withholds income tax from an employee's paycheck, which I believe Royal does, the employer is obligated to report (1099) and submit those withholdings to the U.S. Internal Revenue Service.  I've read several articles that state just about the same as this: 

 

"Taxes on Cruise Ship Employment Income

Crew members are responsible for any taxes due to their country of origin. Only United States citizens or employees that reside in the USA will have US federal taxes deducted from their pay."

 

Cruise lines pay no taxes (other than an individual income tax of its U.S. Citizens/residents) to the U.S. directly.  If the ship is registered in a country that has a reciprocal agreement with the U.S. the cruise lines pay that country and then the country pays the U.S. after all the +/-'s are added up and adjusted or vice versa.  

 

Once again, all the above, some of the above, or none of the above may be wrong. It's just my reading of things.  

[Candleonwater]

9 minutes ago, Ret MP said:

If the employer withholds income tax from an employee's paycheck, which I believe Royal does, the employer is obligated to report (1099) and submit those withholdings to the U.S. Internal Revenue Service. 

 

I'm curious how a 1099 would enter into this, if Royal is withholding income tax from a paycheck?

 

Also, over the years, I've often heard (don't know if it's true or not), but taxation is one of the reasons you don't see a lot of US workers on the ship. Low pay, but still having to pay Uncle Sam, can be a major downer.

 

I have a part time job where I earn well over "tipped wages", but I still get tips - FOR SELLING MERCHANDISE!  More than happy to take those tips because at times I double my pay. I suspect this happens with the behind the scenes people on ships. Tipping culture is out of control.

[Ret MP]

20 minutes ago, Candleonwater said:

 

I'm curious how a 1099 would enter into this, if Royal is withholding income tax from a paycheck?

 

Also, over the years, I've often heard (don't know if it's true or not), but taxation is one of the reasons you don't see a lot of US workers on the ship. Low pay, but still having to pay Uncle Sam, can be a major downer.

 

I have a part time job where I earn well over "tipped wages", but I still get tips - FOR SELLING MERCHANDISE!  More than happy to take those tips because at times I double my pay. I suspect this happens with the behind the scenes people on ships. Tipping culture is out of control.

A 1099 is given to none employee "Independent Contractors", which I believe all workers on RCCL are.  I guess there could be exceptions.  Federal Income tax can be held from "Independent Contractors".  See block 4:

 

[Cruiser_1977]

2 different topics here regarding taxes:

1) What do the cruise ship worker (crew members) pay - this is dependent on a lot of factors. Were they hired directly by the cruise line or by a third party recruiter? Are they a US citizen? Do they live in the US? https://lifeofiris.com/2022/02/27/do-cruise-ship-crew-pay-taxes/

2) What do the cruise lines pay - which is addressed in the link I posted.

 

**While I am not a CPA, I worked for accounting/finance firms for a good portion of the beginning of my career.**

Edited March 9, 2023 by JennyB1977

[Seville2Cabo]

13 minutes ago, Ret MP said:

A 1099 is given to none employee "Independent Contractors", which I believe all workers on RCCL are.  I guess there could be exceptions.  Federal Income tax can be held from "Independent Contractors".  See block 4:

 

Not sure if they would get any US tax docs, but if they did, it would be a 1099 NEC, not MISC

[Ret MP]

Just now, Seville2Cabo said:

Not sure if they would get any US tax docs, but if they did, it would be a 1099 NEC, not MISC

If taxes are withheld, I'd bet a dollar to a donut that a form, I believe it to be 1099 of some sort, will be issued.  

 

I only used the 1099 MISC as an example (it was the first to pop up in my search engine).  There are many.  

[Ret MP]

11 minutes ago, JennyB1977 said:

2 different topics here regarding taxes:

1) What do the cruise ship worker (crew members) pay - Crew members are responsible for any taxes due to their country of origin. Only US citizens or employees that reside in the USA will have to file a US income tax return.

2) What do the cruise lines pay - which is addressed in the link I posted.

 

**While I am not a CPA, I worked for accounting/finance firms for a good portion of the beginning of my career.**

Exactly, that's why I went to some effort to point out that there is a difference between "Corporate Income Tax" and "Individual Income Tax".  

 

I believe we are on the same sheet of music.  

[Buckeyefrank100]

15 minutes ago, Ret MP said:

If taxes are withheld, I'd bet a dollar to a donut that a form, I believe it to be 1099 of some sort, will be issued.  

 

I only used the 1099 MISC as an example (it was the first to pop up in my search engine).  There are many.  

It wouldn't be a 1099.  The workers don't qualify as independent contractors.  If a US form is required it would be a W2.

[Ret MP]

9 minutes ago, Buckeyefrank100 said:

It wouldn't be a 1099.  The workers don't qualify as independent contractors.  If a US form is required it would be a W2.

As I understand it, most, if not all, workers on a RCCL ship are "Independent Contractors", not traditionally defined as "Employees".  "While payroll employees of a company receive a W-2 form, anyone who works for themselves on a regular basis typically receives a 1099 tax form – and if they work for several entities, they may receive a lot of 1099s. But even people who aren't independent contractors may receive 1099s for a variety of reasons, such as reporting prize winnings, investments and retirement distributions to the Internal Revenue Service".

 

I was an Independent Contractor working for a few large trucking firms (one at a time, of course).  They hired me to move cargo from one place to another, what time to pick it up, and what time to deliver it, to be safe and care for their equipment using their schedule of maintenance, and they provided the equipment to do so, a truck.  However, they did not tell me how to change gears, how to turn the truck, how hard to press on the gas, how to wash the windshield, what kind of vacuum to use, etc.  Therefore, I was an Independent Contractor.  I'm sure the ship's crew is the same way, they provide a service/profession but aren't told how to do their tasks, just that a task has to be done to certain standards.  And, the crew will tell you that they work on a contractual basis, not full-time employee status.

 

https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined

The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.

 

Again, I'm no lawyer.  I can only go by my own experiences and what I've read. 

[Buckeyefrank100]

8 minutes ago, Ret MP said:

As I understand it, most, if not all, workers on a RCCL ship are "Independent Contractors", not traditionally defined as "Employees".  "While payroll employees of a company receive a W-2 form, anyone who works for themselves on a regular basis typically receives a 1099 tax form – and if they work for several entities, they may receive a lot of 1099s. But even people who aren't independent contractors may receive 1099s for a variety of reasons, such as reporting prize winnings, investments and retirement distributions to the Internal Revenue Service".

 

I was an Independent Contractor working for a few large trucking firms (one at a time, of course).  They hired me to move cargo from one place to another, what time to pick it up, and what time to deliver it, to be safe and care for their equipment using their schedule of maintenance, and they provided the equipment to do so, a truck.  However, they did not tell me how to change gears, how to turn the truck, how hard to press on the gas, how to wash the windshield, what kind of vacuum to use, etc.  Therefore, I was an Independent Contractor.  I'm sure the ship's crew is the same way, they provide a service/profession but aren't told how to do their tasks, just that a task has to be done to certain standards.  And, the crew will tell you that they work on a contractual basis, not full-time employee status.

 

https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined

The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.

 

Again, I'm no lawyer.  I can only go by my own experiences and what I've read. 

Not to argue, but I can't imagine a scenario in which they would qualify as an independent contractor.  The cruise line dictates what position they work, their days off, the shift, the activity that needs completed.  The only indicator would be a signed contract, however, that doesn't indicate employment status.  There are lots of employees who have contracts.  I know the IRS has been looking hard at IC vs EE and the company has a high burden of proof to label them as IC.  I can see certain positions that might have a fighting chance to be IC, specifically entertainment staff, but wait staff, laundry, cooks, room stewards... they don't fit even one criteria.  At the end of the day, I'm not sure any US reporting is required for these workers anyway.  They shouldn't have any US tax liability I wouldn't think.

 

[Ret MP]

1 minute ago, Buckeyefrank100 said:

Not to argue, but I can't imagine a scenario in which they would qualify as an independent contractor.  The cruise line dictates what position they work, their days off, the shift, the activity that needs completed.  The only indicator would be a signed contract, however, that doesn't indicate employment status.  There are lots of employees who have contracts.  I know the IRS has been looking hard at IC vs EE and the company has a high burden of proof to label them as IC.  I can see certain positions that might have a fighting chance to be IC, specifically entertainment staff, but wait staff, laundry, cooks, room stewards... they don't fit even one criteria.  At the end of the day, I'm not sure any US reporting is required for these workers anyway.  They shouldn't have any US tax liability I wouldn't think.

 

I too am not looking to argue.  Mostly looking for clear and precise information.  As an IC, as you put it and I thank you for that, much shorter, the person paying my wage has the right to tell me, the position I will be working (as long as I'm qualified for it and I agreed to the terms and conditions of the contract), what my days off are, what shifts I will work, and what activity I'll be doing.  That has nothing to do with HOW I do it.  And that's the legal hurdle, being told how to do your assigned task.  Just as one example:  A stateroom steward is told to clean a stateroom and to what standard, he/she is not told that the restroom must be done first or that a mirror must be cleaned by using left to right or vertical strokes with a cleaning cloth.  Just that the mirror must be cleaned to certain standards/the stateroom must be cleaned to certain standards. 

 

Yes, U.S. Citizens and residents who are crew members of RCCL are required to pay U.S. Federal Income taxes and I've posted links to that issue.  Also, as a retired active duty U.S. Army soldier, I can tell you that I had to pay taxes to the IRS every year that I was stationed overseas (war zones excluded).  Cruise ship workers are not exempt from reporting and paying income taxes if any are due.

 

It's been many years since I was in personnel manager/resource manager and I'm sure many many things have changed.  But, the above (the past few posts) is part of my past experiences and knowledge AND what I've researched recently.  But, I could be wrong.

 

[Cruiser_1977]

Maybe @chengkp75 can shed light on the employee (W-2) v. Independent Contractor (1099) debate based on his experience?

[Ret MP]

1 minute ago, JennyB1977 said:

Maybe @chengkp75 can shed light on the employee (W-2) v. Independent Contractor (1099) debate based on his experience?

I'd welcome it.  Is he a professional in the subject?