BAKERSFIELD, CA - Local restaurant owners and servers are frustrated after a new policy went into effect.
At the beginning of the year, the IRS changed automatic gratuity to a service charge, which for many in the food industry is hard news to swallow.
The owner of Goose Loonies says the restaurant welcomes the new policy. But for many servers around town, they say not adding an 18 percent gratuity to large parties, is frustrating.
At RJ's Bar and Grill in northwest Bakersfield, servers say the IRS ruling is affecting them.
"That's how a lot of us make our living. We feed our families on those tips," said RJ's server Julie Smith.
But when serving a large party, gratuity won't be automatically added anymore after an IRS ruling went into effect January 1.
"It makes people not want to take large parties whenever they come in anymore. People are like, no I don't want to take that table, you know," said RJ's server Alisa Caldwell.
The IRS has now made gratuity a service charge that will be taxable in a servers regular paycheck, which would mean more paperwork for restaurants.
But many restaurant owners are choosing another route, eliminating the automatic gratuity altogether, which is bad news for servers who rely on those tips.
"We don't get paid very much on our regular salaries and a lot of that is taxed really highly because we are tipped employees so our paychecks really don't cut it for us," said Smith.
But for waitress Ashley Buys at Goose Loonies, she agrees with the IRS ruling.
"I don't feel comfortable adding gratuity, but for some servers in other places it may be harming," said Buys.
Buys says she agrees with the IRS ruling and feels servers need to work their hardest for tips, not depend on an added 18 percent gratuity charge.
"It's California. People know that it's the customary thing to do to tip your server and usually your service speaks for itself and people will tip you if they feel like you deserve it," said Buys.
Restaurants say instead of a gratuity charge, a suggested tip is now on the bottom of your receipt.