MYRTLE BEACH, SC (WMBF) – The next time you take your family and friends out for dinner, you could see some big changes when it comes to your bill, as a new IRS law in affect changes the way automatic gratuities for large parties are processed.
The change will have a big impact on the Grand Strand, where thousands of people make a living in the hospitality industry. The IRS now requires all restaurants that have automatic gratuities for large customer to run tips through the company's payroll system.
That could mean waiters or waitresses will not get that money until their next pay check as the IRS works to keep track of underreported tips.
Percy and Willie's General Manager Rob Hodges said the service staff will feel the biggest impact.
"The server wants to take that cash home, and they depend on it," added Hodges. "They are budgeting it for that time they work, not two weeks from now."
As for customers heading out to eat at restaurants, they could see large party tables split into smaller groups to keep so many customers from being on the same check. Restaurants could also just do away with the automatic gratuities all together.
Laurie Schatz works in the food service industry, and hopes more restaurants opt out of the automatic tipping.
"I hope so - I thought it was a call to gratuity," added Schatz. "It was your desire or choice to pay what you wanted."
The new requirements just went into effect, but the actual IRS ruling was issued in 2012, leaving restaurants with the past year to prepare for the changes.