Question of the Day - 05 May 2007

For this answer we turned to "Cocktaildoll," the alter ego of, in her own words, "a skeptical, sardonic, and over-analytical" veteran Strip cocktail waitress who goes by the name of Dollie. Here's what she had to say on the subject.

How much does a cocktail waitress make? Not enough!

All seriousness aside, it varies. How do you put a number on an income that's so volatile? The IRS thinks it knows. They send out "spies" every few years who do nothing but sit and drink and watch the waitresses do their stuff ... whoever said there were no perks to being a number-crunching nerd?

Waitresses are paid an hourly wage by the casinos and they also have to sign a tip allocation agreement with the IRS. It used to be optional to sign, but as far as I know it is now a condition of employment, at least at all the major properties. Also, I think waitresses are now allocated by the hour, as opposed to being allocated by the drink. The amount of the allocation is determined by a meeting among these said spies, plus the casino accountant, and select members of the beverage department, which may or may not include some cocktail waitresses. The IRS agents will claim they witnessed drunken idiots who showered the girls with cash, while the waitresses will cry that their customers complained that the drinks took so long they gambled their tips away. It's usually just a big negotiation game, as fun as buying a new car, only it takes about a week longer. After a group hug, the agreed-upon amount is then included on each waitress' paycheck as income.

Each waitress is allocated a different amount depending on her shift and station. For example, a swing shift pit would be different than grave shift slots or day shift pool, etc. And every casino has different allocations, so there's no set amount/rate.

Does the waitress end up paying for the free drinks she serves if a customer leaves or doesn't tip? Possibly. If she doesn't make in real tips what she is allocated in the hypothetical model devised by the powers that be, then yes, she will be taxed on money she didn't make.

So, how much should you tip? Generally speaking, when the drinks are "free," a dollar a drink is a good tip. Water, coffee, and sodas are considered drinks. If you want a glass of ice with your white wine, that is considered two drinks, because that extra glass is taking up space for a drink that could be given to another customer. If the waitress is nice enough to bring you two drinks (such as a shot with a water), tip for two drinks. The deal here is this: You're tipping for service, not for the drink. It doesn't matter what she brings you, the point is she brought it to you. You should never tip less than a dollar a drink.

And as to your question about how much do cocktail waitresses make? Let's just say that if I had a dollar for every time I was asked that question, I'd make a lot more than my tip allocation.

If you'd like to know more about Dollie and her thoughts of life, the universe, and the correct etiquette for dealing with your cocktail server, then check out her hilarious Web site: www.cocktaildoll.com.

Thanks to a Washington state-based CPA who wrote in with the following: "I'm a CPA who admittedly doesn't do a lot of work for Nevada tipped employees, but... Here's how it's supposed to work. Any tipped employee should keep a daily tip log in which he/she records the actual amount of tips made. If, at the end of the year, those actual tips are less than the allocated amount, the employee only needs to report the actual. In other words, he/she would make an adjustment to the W-2 amount to reflect the actual lesser amount received. "Of course those people who for some reason didn't/won't keep such a record will have to report the allocated amount and if it's too high, the only thing they can do is complain about how unfair they system is. And if the amount in your daily tip log is higher than the allocated amount, you would add that difference to your tax return (he, he). "The only Nevada tipped client I have is a bartender in Reno. He always works day shifts when the tips are usually lower. Every year I ask him if the allocated amount is reasonable and every year he says 'I'm happy with that amount.' And I know he keeps track in a daily log. I don't know for sure, but I suspect that even employees like him whose tip amount is on the low end will almost always make more than the allocated amount."