Where I live in the US, mandatory minimum wage is $18.69/hr. Tips are on top of that. It has less to do with a living wage and more to do with the fact that the employees make less money with a mandatory 20% service charge than they do via tips.
What's a mandatory service charge even supposed to be? Are restaurant bills cost-plus contracts? Is there also a refrigeration charge, and an ingredients charge?
Yes, service is added as a 20% charge based on the total bill. This is to offset the absence of tipping. If you simply add 20% to menu prices, it has other adverse consequences that reduce employee income in practice.
