Gratuities

[cruiser2015]

44 minutes ago, Minnesota Rookie said:

RocketMan:

Since you weren't there, of course, you had no way either of judging the credibility of the steward, nor of my ability to do so. I made it plain in my contribution that it was a matter of judging the steward's credibility whom we had come to know over longer than several weeks. The reasons I made that plain was that I knew that there was a chance that he could be playing me to increase his gratuity. I think Norwegian low-balls on initial price and then pads their profits significantly in two ways: by taking what they call gratuities for the bottom line, and by excessively charging for excursions, etc. I am a pretty good judge of character and of situation given my life and experiences as well as my expertise. What you think is irrelevant to me.

When you post on an open forum, you should expect some readers to comment back.

Whether you like that opinion or not.

Such as my opinion:

1. Some people are incredibly good liars.

2. If NCL was absconding with these funds, as implied, on such a large scale, it would be impossible to keep it a secret. THOUSANDS of employees involved. Some will be fired for other reasons and hold a grudge. Other will simply quit. Nothing stopping these folks from spilling the beans.

This is NCL, that the NSA or CIA.

[SteveH2508]

3 hours ago, Minnesota Rookie said:

This topic got so long that I confess I didn't read all of the contributions, so I hope that I am not duplicating any of the former posts. But we had an interesting experience on an April 2023 cruise (for obvious reasons told below I don't want to identify it any more than that) with Norwegian this year. After having made something of a relationship with our room steward over the time I asked him on the last day whether he got a part of the huge tip package that we paid to Norwegian. He was very reluctant to answer and said that the staff had been told quite plainly by Norwegian that they would be fired if they revealed this information to customers. But because the steward trusted me a bit perhaps, he finally told me that no, they don't get any part of it. I found him credible and his reluctant answer believable. We tipped him personally and took a significant amount off our Norwegian gratuities. I believe it is possible, or even likely (without much more evidence than that single occasion), that Norwegian is actually using the so-called "gratuities" to pad their profit margin, not compensate their staff.  

You have been played. If NCL were doing this they would be in a world of hurt from the US financial authorities due to their accounting practices.

 

Another poster made a good summary of this which I shall reproduce with a link to the original post.

 

Tipping and US Accounting

Keep in mind that the big three cruise line holding companies NCLH, RCL and CCL are all listed on the US stock exchanges. As a result even though they are not US companies, they must follow US accounting standards. Under US accounting standards tips are outside of the company’s books. The amount of tips received are not considered as income, and the money paid to employees are not considered to be expenses. The money is processed outside of the company’s books.

There are some conditions that must be met. The most important is that all monies received must be distributed to employees. The second condition is that they must be optional, as in can be removed. Both of those conditions are important. They mean that the money does go to the employees and is not retained by the company. 

The current system does provide benefits to the company, the workers and the passengers.

As far as the company is concerned it does impact some payroll taxes depending upon a workers country of residence. It also impacts gross and net margins in their financial reporting.

As far as employees it may impact the taxes they pay, depending upon country. Lots of variance between countries on how tips are treated vs income. It may also impact recruiting fees.

As far as passengers since gratuities are paid onboard, unless you buy a package, they are not included in the trip insurance cost calculation. If gratuities went away and fares went up by the same amount the trip insurance prices would go up.  For the same reason one does not have to pay them in advance so less money is due at the final pay dates.

 

https://boards.cruisecritic.co.uk/topic/2933055-mandatory-gratuities/page/3/#comment-65359471

[destar]

3 hours ago, Minnesota Rookie said:

This topic got so long that I confess I didn't read all of the contributions, so I hope that I am not duplicating any of the former posts. But we had an interesting experience on an April 2023 cruise (for obvious reasons told below I don't want to identify it any more than that) with Norwegian this year. After having made something of a relationship with our room steward over the time I asked him on the last day whether he got a part of the huge tip package that we paid to Norwegian. He was very reluctant to answer and said that the staff had been told quite plainly by Norwegian that they would be fired if they revealed this information to customers. But because the steward trusted me a bit perhaps, he finally told me that no, they don't get any part of it. I found him credible and his reluctant answer believable. We tipped him personally and took a significant amount off our Norwegian gratuities. I believe it is possible, or even likely (without much more evidence than that single occasion), that Norwegian is actually using the so-called "gratuities" to pad their profit margin, not compensate their staff.  

YUUPPPP!!!! You have been played.

[RocketMan275]

1 hour ago, Minnesota Rookie said:

RocketMan:

Since you weren't there, of course, you had no way either of judging the credibility of the steward, nor of my ability to do so. I made it plain in my contribution that it was a matter of judging the steward's credibility whom we had come to know over longer than several weeks. The reasons I made that plain was that I knew that there was a chance that he could be playing me to increase his gratuity. I think Norwegian low-balls on initial price and then pads their profits significantly in two ways: by taking what they call gratuities for the bottom line, and by excessively charging for excursions, etc. I am a pretty good judge of character and of situation given my life and experiences as well as my expertise. What you think is irrelevant to me.

One doesn't have to know the steward personally  to know this story was merely an attempt, a successful attempt, to play you for additional gratuities.  All one has to know that it isn't legal for the cruise line to do as the steward stated.  (See posts #51, #52, & 53 of this thread).  The next time a crew member tries this on you ask him what his contract with the cruise line says about distributions.

 

The assertion that cruise lines are using these fees to pad their bottom line arises frequently.  This assertion fails once one is aware of the legal ramifications of the cruise line stiffing the crew.  

[dbrown84]

1 hour ago, SteveH2508 said:

You have been played. If NCL were doing this they would be in a world of hurt from the US financial authorities due to their accounting practices.

 

Another poster made a good summary of this which I shall reproduce with a link to the original post.

 

Tipping and US Accounting

Keep in mind that the big three cruise line holding companies NCLH, RCL and CCL are all listed on the US stock exchanges. As a result even though they are not US companies, they must follow US accounting standards. Under US accounting standards tips are outside of the company’s books. The amount of tips received are not considered as income, and the money paid to employees are not considered to be expenses. The money is processed outside of the company’s books.

There are some conditions that must be met. The most important is that all monies received must be distributed to employees. The second condition is that they must be optional, as in can be removed. Both of those conditions are important. They mean that the money does go to the employees and is not retained by the company. 

The current system does provide benefits to the company, the workers and the passengers.

As far as the company is concerned it does impact some payroll taxes depending upon a workers country of residence. It also impacts gross and net margins in their financial reporting.

As far as employees it may impact the taxes they pay, depending upon country. Lots of variance between countries on how tips are treated vs income. It may also impact recruiting fees.

As far as passengers since gratuities are paid onboard, unless you buy a package, they are not included in the trip insurance cost calculation. If gratuities went away and fares went up by the same amount the trip insurance prices would go up.  For the same reason one does not have to pay them in advance so less money is due at the final pay dates.

 

https://boards.cruisecritic.co.uk/topic/2933055-mandatory-gratuities/page/3/#comment-65359471

this is true, but remember we are not tipping.  DSC is not tips, which NCl is clear to point out on their website.  I'm a believer that it's setup this way for the very laws that you are quoting above.  I know a lot of folks here on CC like to say that it's semantics (DSC vs tips), but NCL does it this way on purpose.  And I'm speaking specifically on the DSC.  Gratuities are tips, and as such would be subject to the tip laws

Edited December 9, 2023 by dbrown84

[SteveH2508]

22 minutes ago, dbrown84 said:

this is true, but remember we are not tipping.  DSC is not tips, which NCl is clear to point out on their website.  I'm a believer that it's setup this way for the very laws that you are quoting above.  I know a lot of folks here on CC like to say that it's semantics (DSC vs tips), but NCL does it this way on purpose.  And I'm speaking specifically on the DSC.  Gratuities are tips, and as such would be subject to the tip laws

The post I responded to was referring to the DSC, so your post is moot. The financial reporting standards relate to accounting for charges which go to the staff and are optional. It does not matter whether they are called tips, gratuities, service charges, bungs, bribes or gifts (other words are available). They MUST all go to the staff and the customer is able to remove or amend them, otherwise NCL are breaching the Stock Exchange rules by not including them in their accounts. That ain't happening.

[dbrown84]

Just now, SteveH2508 said:

The post I responded to was referring to the DSC, so your post is moot. The financial reporting standards relate to accounting for charges which go to the staff and are optional. It does not matter whether they are called tips, gratuities, service charges, bungs, bribes or gifts (other words are available). They MUST all go to the staff and the customer is able to remove or amend them, otherwise NCL are breaching the Stock Exchange rules by not including them in their accounts. That ain't happening.

how is my post moot.  I'm also talking about the DSC.  You can believe what you want.  and if you believe the DSC is given to the employees in whole, then you're wrong, especially in quoting the rules you are quoting. Those rules have no bearing at all on the collection of the DSC.  Anyway, have fun 

[seemoreroyals]

44 minutes ago, dbrown84 said:

this is true, but remember we are not tipping.  DSC is not tips, which NCl is clear to point out on their website.  I'm a believer that it's setup this way for the very laws that you are quoting above.  I know a lot of folks here on CC like to say that it's semantics (DSC vs tips), but NCL does it this way on purpose.  And I'm speaking specifically on the DSC.  Gratuities are tips, and as such would be subject to the tip laws

 

Repeat after me,  DSC are tips.  The 20 % you pay if you get the drink package those are tips.  The 20% extra you pay when you get the dining package those are tips as well.  If you take a cruise for 2 for 7 days you will be paying close to $700 composed of DSC,  20% drink tips, and added tips for SDP.  

 

The idea that these monies do not get to the employees they are intended to get to is ludicrous.  If it makes you happy to tip more by all means go for it.  Even NCL themselves says it is not necessary. 

 

 

[dbrown84]

6 minutes ago, seemoreroyals said:

 

Repeat after me,  DSC are tips.  The 20 % you pay if you get the drink package those are tips.  The 20% extra you pay when you get the dining package those are tips as well.  If you take a cruise for 2 for 7 days you will be paying close to $700 composed of DSC,  20% drink tips, and added tips for SDP.  

 

The idea that these monies do not get to the employees they are intended to get to is ludicrous.  If it makes you happy to tip more by all means go for it.  Even NCL themselves says it is not necessary. 

 

 

please tell me where you saw me ever say to tip more.  and to make myself clear (because maybe there is a disconnect with word usage), what I'm saying is if they collected 10K in DSC for a cruise, the entire 10K is not distributed to the employees pay checks.  Even NCL themselves says so.  To think otherwise is ludicrous.  It's the very reason why everyone pushed to get the comment cards.  that's how you affect (add to) someone's pay.  It is not a straight collect/distribute like tips would be.  so please, repeat after me

 

and you shouldn't respond to a post out of context.  My post was in response to a very incorrect application of laws

Edited December 10, 2023 by dbrown84

[seemoreroyals]

2 minutes ago, dbrown84 said:

please tell me where you saw me ever say to tip more.  and to make myself clear (because maybe there is a disconnect with word usage), what I'm saying is if they collected 10K in DSC for a cruise, the entire 10K is not distributed to the employees pay checks.  Even NCL themselves says so.  To think otherwise is ludicrous.  It's the very reason why everyone pushed to get the comment cards.  that's how you affect (add to) someone's pay.  It is not a straight collect/distribute like tips would be.  so please, repeat after me

 

I have not read through all of your posts put I have read enough of them to realize that you are adamant in your position regarding DSC.  That implies to me that you think that the $280 collected from 2 people in steerage on a 7 day cruise goes to something other than tips to cabin stewards, waiters, and other NCL employees that provide service during your stay.

 

So where exactly does the $280 go in the example I am using?  Going back to before NCL employees used to collect envelopes with tips in them at the end of the cruise and coming up with this ingenious idea of at first charging $12 pp per day and now $20 pp per day ($25 pp suites and haven).  DSC replaced this process of leaving envelopes with suggested amounts for the waiter, room steward, and others at the cruisers discretion.  Therefore the term came to be called discretionary service charge (DSC).

 

The genesis of the DSC is the envelopes we used to all leave years ago.  The purpose of what they are doing now with DSC and other types of tips they are collecting,  reflects the way cruises have changed.  You no longer have the same waiter the entire time.  Over half the ship opts for the free at sea therefore they had to come up with a way to collect extra tips for the drink package portion and the specialty dinner portion.  

 

The new system is more than fair in terms of tips left for services provided.  

 

 

[cruiser2015]

7 hours ago, seemoreroyals said:

 

I have not read through all of your posts put I have read enough of them to realize that you are adamant in your position regarding DSC.  That implies to me that you think that the $280 collected from 2 people in steerage on a 7 day cruise goes to something other than tips to cabin stewards, waiters, and other NCL employees that provide service during your stay.

 

So where exactly does the $280 go in the example I am using?  Going back to before NCL employees used to collect envelopes with tips in them at the end of the cruise and coming up with this ingenious idea of at first charging $12 pp per day and now $20 pp per day ($25 pp suites and haven).  DSC replaced this process of leaving envelopes with suggested amounts for the waiter, room steward, and others at the cruisers discretion.  Therefore the term came to be called discretionary service charge (DSC).

 

The genesis of the DSC is the envelopes we used to all leave years ago.  The purpose of what they are doing now with DSC and other types of tips they are collecting,  reflects the way cruises have changed.  You no longer have the same waiter the entire time.  Over half the ship opts for the free at sea therefore they had to come up with a way to collect extra tips for the drink package portion and the specialty dinner portion.  

 

The new system is more than fair in terms of tips left for services provided.  

 

 

However, do not forget that the DSC is distributed only in part as a "tip" would be expected to be done. The rest is used for various programs benefiting crew - but not money in their pockets.

[PATRLR]

16 hours ago, Minnesota Rookie said:

RocketMan:

Since you weren't there, of course, you had no way either of judging the credibility of the steward, nor of my ability to do so. I made it plain in my contribution that it was a matter of judging the steward's credibility whom we had come to know over longer than several weeks. The reasons I made that plain was that I knew that there was a chance that he could be playing me to increase his gratuity. I think Norwegian low-balls on initial price and then pads their profits significantly in two ways: by taking what they call gratuities for the bottom line, and by excessively charging for excursions, etc. I am a pretty good judge of character and of situation given my life and experiences as well as my expertise. What you think is irrelevant to me.

What you completely skipped over in your response is this part of RocketMan275's post:

17 hours ago, RocketMan275 said:

The cruise lines have contracts with their crew that stipulate how the DSC will be distributed.  These contracts prevent the cruise lines from doing what you've reported.  

These contracts have been described here fairly well by people who these boards have come to trust. 

So your ability to judge character may be excellent, but in this case you were played.   

[seemoreroyals]

4 hours ago, cruiser2015 said:

However, do not forget that the DSC is distributed only in part as a "tip" would be expected to be done. The rest is used for various programs benefiting crew - but not money in their pockets.

 

Hard to say what portion of the $140 per person we gleefully pay as DSC formally known as prepaid gratuities actually make their way into the pockets of our room steward or waitstaff or other NCL employee for services rendered on our week long cruise.

 

Let's start with an example for  the Prima and assume they have 3000 passengers on the ship for the week we are on it.  $420,000 to split between primarily room stewards and waitstaff at restaurants.  I know not too long ago they were only collecting $12 pp per day or $84 tips for a week long cruise. So not long ago they were collecting just over $250,000 with these discretionary fees.  Quite a bit of difference in less than 10 years.  No wonder they have room left in the budget for parties etc.

 

I know my math is not perfect.  Prima in a normal week sails with more than 3000 passengers.  And Haven folks pay $25 pp per day instead of $20.  So the money they collect for DSC is actually quite a bit more than $420,000.  When I googled number of employees on Prima the number was 1506.  How many are waiters and stewards maybe 500?  If we allow $20,000 for various parties and benefits to crew that leaves $400,000 to split between 500 mainly stewards and waitstaff.  That is $800 per person.  Not bad pay if you add that to the standard wage they are being paid by NCL per week.

 

I know the example I am using is probably quite a bit different than what actually happens with the money divied up after collected as DSC.  The point I am making is NCL room stewards and waiters are well compensated.  NCL has even stated that there is no need to tip extra.  

[cruiser2015]

11 minutes ago, seemoreroyals said:

 

Hard to say what portion of the $140 per person we gleefully pay as DSC formally known as prepaid gratuities actually make their way into the pockets of our room steward or waitstaff or other NCL employee for services rendered on our week long cruise.

 

Let's start with an example for  the Prima and assume they have 3000 passengers on the ship for the week we are on it.  $420,000 to split between primarily room stewards and waitstaff at restaurants.  I know not too long ago they were only collecting $12 pp per day or $84 tips for a week long cruise. So not long ago they were collecting just over $250,000 with these discretionary fees.  Quite a bit of difference in less than 10 years.  No wonder they have room left in the budget for parties etc.

 

I know my math is not perfect.  Prima in a normal week sails with more than 3000 passengers.  And Haven folks pay $25 pp per day instead of $20.  So the money they collect for DSC is actually quite a bit more than $420,000.  When I googled number of employees on Prima the number was 1506.  How many are waiters and stewards maybe 500?  If we allow $20,000 for various parties and benefits to crew that leaves $400,000 to split between 500 mainly stewards and waitstaff.  That is $800 per person.  Not bad pay if you add that to the standard wage they are being paid by NCL per week.

 

I know the example I am using is probably quite a bit different than what actually happens with the money divied up after collected as DSC.  The point I am making is NCL room stewards and waiters are well compensated.  NCL has even stated that there is no need to tip extra.  

You've got some highly speculative numbers there.

The gross take (there are also some who will reduce/cancel) but, ballpark, okay.

I wouldn't assume that the direct distribution portion is that high (just saying).

The DSC is going to others besides wait staff & stewards (no clue here as to how many). The more that NCL has added to this category, the less they have to pay them directly out of their corporate pockets.

 

Crew generally work their butts off, with long hours and little time off for months at a time.

 

Yours is the first comment I've ever heard that staffers are well compensated.

Notoriously, the opposite has always been the norm.

As for that increase to the ante, at least in part, remember that inflation has been a killer.

lastly, the hike in the DSC may be an offset for NCL to hold back on salary increases, further impacting the grand total that the employees end up receiving.

 

Bottom line, I suspect you overstate what the troops are getting.

As to tipping additional - yes, optional; not required; don't feel guilty if you don't  give extra (my opinion).

However, when  my next cruise ends in 7 weeks, if I think that my steward has done well, I will give him/her some additional cash.

[d9704011]

50 minutes ago, seemoreroyals said:

When I googled number of employees on Prima the number was 1506.  How many are waiters and stewards maybe 500?

Well, since there doesn't appear to be a hard boundary on the amount of speculation permitted on this, I'd say the number of employees in the tip pool is more likely 1,000, not 500.

[pete_coach]

Wow, certainly a lot of responses and deep feelings on tipp0ng.

I do not have any numbers or statistics or contract wherewithal but I do believe the staff get the DSC and I consider DCS tips. Giving extra is a personal choice, just as it is in a shore based restaurant where you get options of 18, 20 and 25%.

 

I am not sure what folks give at a land based all inclusive resort? Same type of discussions about a "DSC" and extra tips?

 

Having said that, I am pretty sure tips and DSC are now the most talked about subjects since the dress code debates of a few years ago LOL