Tips taken under the table

May 22, 2009

While restaurants automatically add a 10 percent gratuity charge to bills, Costa Rican waiters will soon be counting tips as under-the-table transactions.

With the passing of a new law, waiters can no longer count their tips as part of their salary – an action that will affect the benefits and pension plans of all waiters across the country, according to a Legislative Assembly news bulletin.

The money will be untaxed by the government, which may sound like a plus, but the implications are far larger in Costa Rica. At the end of each year, Costa Ricans receive an extra month´s salary, depending on their average monthly wage. So, with a smaller official salary comes a smaller year-end bonus.

Sergio Huertas, a waiter at the San José restaurant Nuestra Tierra, said he liked the idea of the government keeping its hands off the tips, but the reduced salary means a smaller pension.

“When your salary is bigger, you have to pay more official charges,” Huertas said. “Right now, it´s a fictitious salary because it´s not officially registered.”

His fellow waiter, Duclos Villarecía, was happy with the changes.

“For me, it´s excellent,” he said, “because the government and the bank can´t mess with my money as much now.”

But Huertas said in the long run, their pensions will be smaller for the move.

The law drew harsh criticism from the Social and Christian Unity Party (PUSC).

“What´s certain is that this project will create a great injustice that will directly reverberate in families´ incomes, not in the accounting systems of the business owner,” said PUSC legislator Jorge Eduardo Sánchez, according to the news bulletin.

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