Auto Gratuties Harming Some Cruise Workers Article

[teeredi2cruise]

PLEASE DON'T SHOOT THE MESSENGER!!!! 

I came across this article today and know that this topic has been a highly debated topic of discussion.

 

This is by NO MEANS represents my opinion but I thought some anecdotal information that may inform cruisers who may feel inclined to see the impact from the change. Below is the link and an excerpt from the article. I am not advocating for or against the policy or  how anyone engages with staffers related to tipping beyond the auto gratuities as I feel this is a very personal and individual decision.

 

"Cruise-ship passengers used to tip workers in cash, but in recent decades, most cruise lines have begun adding gratuity charges to passengers' bills. Doing so can be convenient for passengers, but the shift has been harmful for some workers, maritime lawyer Michael Guilford told Business Insider. "

 

"But some workers, like room stewards, have seen their overall pay decrease because they now earn less in tips than they used to, Guilford said, and some workers who began receiving tips after the shift to automatic gratuity have seen no change in their overall pay because their base salaries have decreased by the amount they now receive in gratuity. "

 

 

https://www.msn.com/en-us/travel/tips/the-one-thing-passengers-do-thats-downright-awful-for-some-cruise-ship-workers/ar-BBRq30J?ocid=spartanntp

 

[graphicguy]

54 minutes ago, teeredi2cruise said:

PLEASE DON'T SHOOT THE MESSENGER!!!! 

I came across this article today and know that this topic has been a highly debated topic of discussion.

 

This is by NO MEANS represents my opinion but I thought some anecdotal information that may inform cruisers who may feel inclined to see the impact from the change. Below is the link and an excerpt from the article. I am not advocating for or against the policy or  how anyone engages with staffers related to tipping beyond the auto gratuities as I feel this is a very personal and individual decision.

 

"Cruise-ship passengers used to tip workers in cash, but in recent decades, most cruise lines have begun adding gratuity charges to passengers' bills. Doing so can be convenient for passengers, but the shift has been harmful for some workers, maritime lawyer Michael Guilford told Business Insider. "

 

"But some workers, like room stewards, have seen their overall pay decrease because they now earn less in tips than they used to, Guilford said, and some workers who began receiving tips after the shift to automatic gratuity have seen no change in their overall pay because their base salaries have decreased by the amount they now receive in gratuity. "

 

 

https://www.msn.com/en-us/travel/tips/the-one-thing-passengers-do-thats-downright-awful-for-some-cruise-ship-workers/ar-BBRq30J?ocid=spartanntp

 

Trying to understand what they are trying to say.......are cruisers giving (tipping) less to the room stewards?  That’s what it sounds like to me.

[perditax]

Quote

But some workers, like room stewards, have seen their overall pay decrease because they now earn less in tips than they used to, Guilford said, and some workers who began receiving tips after the shift to automatic gratuity have seen no change in their overall pay because their base salaries have decreased by the amount they now receive in gratuity.

 

 

Guilford said he's spoken with hundreds of cruise-ship employees both before and after cruise lines moved to automatic gratuity, and those who received cash tips reported much higher tip-based income than those Guilford has spoken with since the shift, suggesting that the overall amount of money spent by passengers on tips has decreased

 

.

 

Bolded by me. I think they're arriving at the wrong conclusion--I think the cruise line is just giving less of the 'auto' tips to the crew than they would have received if handed cash directly by the customer.

 

Much the same way that all the 'counter service' food places in my town now prompt to add a tip to your order, but if I ask the person behind the counter if they're getting that tip, they always say no. The switch from cash to digital 'tipping' across the whole food & hospitality industry has been great for business owners who can slice and dice the math anyway they want, but not so much for the person doing the actual work.

 

That said, the lawyer referenced is a "Cruise Law News" type, although I don't think it's the same guy.

Edited June 6, 2019 by perditax

[Kingkonig]

9 minutes ago, graphicguy said:

Trying to understand what they are trying to say.......are cruisers giving (tipping) less to the room stewards?  That’s what it sounds like to me.

 

It seems that way (I think I came across a similar article yesterday from Business Insider).  Basically before auto-gratuities were a thing, cabin stewards and waitstaff got a larger amount of tips, because it was handled in cash (I assume that like foodservice on land it’s easier to hide what you actually make for tax purposes, but I don’t know what maritime taxes are).  Now they’re split with the “behind the scenes” staff, and on top of that, you don’t have many people who tip “above and beyond” what the DSC is, since it keeps going up and people assume everything is included when they pay up front.

[fshagan]

41 minutes ago, Kingkonig said:

 

It seems that way (I think I came across a similar article yesterday from Business Insider).  Basically before auto-gratuities were a thing, cabin stewards and waitstaff got a larger amount of tips, because it was handled in cash (I assume that like foodservice on land it’s easier to hide what you actually make for tax purposes, but I don’t know what maritime taxes are).  Now they’re split with the “behind the scenes” staff, and on top of that, you don’t have many people who tip “above and beyond” what the DSC is, since it keeps going up and people assume everything is included when they pay up front.

 

My understanding is that the employees are under the tax rules of their respective nation, so Filipinos pay taxes on wages and gratuities based on Philippine law. I have heard, but haven't verified, that American workers on foreign flagged cruise ships do not pay into Social Security saving about 7.5% they would pay for their share (and of course the company isn't paying the matching percentage either).

 

It sounds to me like the articles are complaining that the companies are paying their workers what they are willing to work for, and not making them rely on tips for their wages. That will always benefit some workers and hurt those that are customer service superstars who get higher tips. That's what some people want.

 

My personal pet peeve isn't the extra $210 I have to remember to add to the cruise price for a 7 day cruise, it's the deceptive "per person, double occupancy" price that is advertised. The cabin price should be displayed, not a per person price. No one pays that price without a sale; solos pay a supplement.

[Kingkonig]

9 minutes ago, fshagan said:

My personal pet peeve isn't the extra $210 I have to remember to add to the cruise price for a 7 day cruise, it's the deceptive "per person, double occupancy" price that is advertised. The cabin price should be displayed, not a per person price. No one pays that price without a sale; solos pay a supplement.

 

I agree with that, it does certainly make it harder to see the price from the front page.  Though it gets easier with time - I find that a cabin that advertises $1200 per person for the week will end up running me close to $3600.  It’s annoying, but with the number of mock bookings I’ve done, luckily I’ve learned how to read it.

[Birdie And Sue]

5 hours ago, teeredi2cruise said:

PLEASE DON'T SHOOT THE MESSENGER!!!! 

I came across this article today and know that this topic has been a highly debated topic of discussion.

 

This is by NO MEANS represents my opinion but I thought some anecdotal information that may inform cruisers who may feel inclined to see the impact from the change. Below is the link and an excerpt from the article. I am not advocating for or against the policy or  how anyone engages with staffers related to tipping beyond the auto gratuities as I feel this is a very personal and individual decision.

 

"Cruise-ship passengers used to tip workers in cash, but in recent decades, most cruise lines have begun adding gratuity charges to passengers' bills. Doing so can be convenient for passengers, but the shift has been harmful for some workers, maritime lawyer Michael Guilford told Business Insider. "

 

"But some workers, like room stewards, have seen their overall pay decrease because they now earn less in tips than they used to, Guilford said, and some workers who began receiving tips after the shift to automatic gratuity have seen no change in their overall pay because their base salaries have decreased by the amount they now receive in gratuity. "

 

 

https://www.msn.com/en-us/travel/tips/the-one-thing-passengers-do-thats-downright-awful-for-some-cruise-ship-workers/ar-BBRq30J?ocid=spartanntp

 

 

Consider the source, a lawyer probably trying to set up a law suit simply to lien his pockets in the guise of battling for the little guy.  Lawyers are such scum.  I give the opinions in the story no merit what so ever.

 

[zqvol]

Nothing to see here. This is an article by an attorney who specializes in suing the cruise lines, ie this is fake news.

[trex-de]

I bet the laundry folks aren’t complaining.   They went from zero to something. 

 

Like anything else, THE INDUSTRY shifted.  For those of us who remember the envelopes, it may be tough to manage that change. DW still insists to hand an envelope.  In time there most likely will be a shift to those who never were handed empty envelopes to fill and no cash tips will become the norm.  

 

We did not make the rules or guidelines. The cruise lines did.  In time the rules will change again. Until then I am blessed enough to cruise and carry a fist of cash on the cruise to distribute as my DW directs. 

[BirdTravels]

We are not contributing the the problem. We tip our cabin steward the same now as before the auto daily service charges. Actually, we tip our cabin steward more now than before since we have accounted for "inflation" over the years. 

[Shoppie124]

9 hours ago, fshagan said:

 

My understanding is that the employees are under the tax rules of their respective nation, so Filipinos pay taxes on wages and gratuities based on Philippine law. I have heard, but haven't verified, that American workers on foreign flagged cruise ships do not pay into Social Security saving about 7.5% they would pay for their share (and of course the company isn't paying the matching percentage either).

 

 

It depends on the country and if there is a tax treaty with that country.  No tax treaty could mean tax issues for the US employee.  The Federal gov't will tax worldwide income up to $80k.  As long as the flag of the ship is foreign, no SS or Medicare is due.  They may have state liabilities too depending on where they reside while not at sea.

 

To get out of all of this... they would need to prove they were physically out of the country for 330 days of the last 12 months

[chengkp75]

12 hours ago, Shoppie124 said:

It depends on the country and if there is a tax treaty with that country.  No tax treaty could mean tax issues for the US employee.  The Federal gov't will tax worldwide income up to $80k.  As long as the flag of the ship is foreign, no SS or Medicare is due.  They may have state liabilities too depending on where they reside while not at sea.

 

To get out of all of this... they would need to prove they were physically out of the country for 330 days of the last 12 months

However, the "physical presence" test you mention of being physically out of the country for 330 out of 365 days also states that any time spent over or above international waters in excess of 24 hours at a time does not count as time out of the US.  This was done to prevent US merchant mariners from claiming tax free status.

[chengkp75]

I hate tipping threads, and usually don't get involved, but I will make one comment regarding this article. Prior to 2013, the crew that are now in the DSC pool received almost no "wage" and relied almost entirely on DSC, and there was no guarantee of how much the crew would make, over and above the "wage" paid.  Now, since the MLC (Manila Labor Convention) has come into effect, there is a minimum wage for all seafarers, and if a crew's wage is made up of wage and DSC, and the DSC is removed to the point that the crew's wage falls below the minimum, then the company has to step in and make up the difference.  So, their compensation has a guaranteed minimum now, so the crew get more in "wage" and less in DSC, percentage wise, and this allowed the lines to spread the DSC over more crew.  I won't respond to any discussion over this, these are facts, and I won't get into the merits/faults of the DSC system.

 

My personal feelings are that a very few overachievers are getting less since the DSC, but these folks tend to get the "extra" tips anyway, and so I really can't say they are suffering.  A "survey" by a lawyer who can't do anything for the crew (he can't apply US labor laws) I find to be about as truthful as when you ask a tipped employee whether he is receiving the DSC.

[newmexicoNita]

17 hours ago, Birdie And Sue said:

 

Consider the source, a lawyer probably trying to set up a law suit simply to lien his pockets in the guise of battling for the little guy.  Lawyers are such scum.  I give the opinions in the story no merit what so ever.

 

thanks for seeing the other side of the story. Plus, by having the auto DSC more people behind the scenes are being rewarded. For those who can remember, did you even give a tip to someone who you did not come directly into contact with years ago? There was also a time when we had the same wait staff every day.  I take these articles with a grain of salt. 

[Shoppie124]

41 minutes ago, chengkp75 said:

However, the "physical presence" test you mention of being physically out of the country for 330 out of 365 days also states that any time spent over or above international waters in excess of 24 hours at a time does not count as time out of the US.  This was done to prevent US merchant mariners from claiming tax free status.

The key to the 330 days is they are under a foreign flag.  US merchant mariners are presumably be under a US flag and therefore taxable.  Otherwise you would have said merchant mariners correct?

[chengkp75]

1 hour ago, Shoppie124 said:

The key to the 330 days is they are under a foreign flag.  US merchant mariners are presumably be under a US flag and therefore taxable.  Otherwise you would have said merchant mariners correct?

No, because foreign merchant mariners would not be liable for US taxes on foreign ships.  US merchant mariners, whether working on US or foreign flag ships do not count towards the physical presence test.  However, as noted, US merchant mariners working on foreign flag vessels do not pay Social Security or Medicare taxes, but concurrently their income does not apply to calculations towards SS benefits.

[fshagan]

4 hours ago, chengkp75 said:

My personal feelings are that a very few overachievers are getting less since the DSC, but these folks tend to get the "extra" tips anyway, and so I really can't say they are suffering.  A "survey" by a lawyer who can't do anything for the crew (he can't apply US labor laws) I find to be about as truthful as when you ask a tipped employee whether he is receiving the DSC.

 

Just wanted to say I always enjoy your posts and appreciate the experience you have in these matters.

[erdoran]

5 hours ago, newmexicoNita said:

thanks for seeing the other side of the story. Plus, by having the auto DSC more people behind the scenes are being rewarded. For those who can remember, did you even give a tip to someone who you did not come directly into contact with years ago? There was also a time when we had the same wait staff every day.  I take these articles with a grain of salt. 

No, the behind the scenes people were no doubt being paid directly by NCL the same amount they are paid now by DSC.  

 

17 hours ago, BirdTravels said:

We are not contributing the the problem. We tip our cabin steward the same now as before the auto daily service charges. Actually, we tip our cabin steward more now than before since we have accounted for "inflation" over the years. 

So DSC isn't INSTEAD of tips (for DSC staff), it is IN ADDITION TO the little envelopes!  In the time I've hung around CC, that's how it seems to be ending up - pay your DSC and then tip extra to the steward, to that excellent waiter...pay your 20% on UBP and hand the bartender a dollar here and a dollar there.....prepay your 20% on SDP and then be sure to fill in that "extra tip" line that's always present....

[KateQ22003]

In the years of envelopes, the stewards/waiters got to keep the cash they were given. Now they are at the mercy of how much if any they get of the DSC.

[Birdie And Sue]

2 hours ago, erdoran said:

No, the behind the scenes people were no doubt being paid directly by NCL the same amount they are paid now by DSC.  

 

So DSC isn't INSTEAD of tips (for DSC staff), it is IN ADDITION TO the little envelopes!  In the time I've hung around CC, that's how it seems to be ending up - pay your DSC and then tip extra to the steward, to that excellent waiter...pay your 20% on UBP and hand the bartender a dollar here and a dollar there.....prepay your 20% on SDP and then be sure to fill in that "extra tip" line that's always present....

 

 

All correct if you omit the highlighted words.