San José, Costa Rica, since 1956

Lawmakers Serve Up a Slice of Tipping Bills

Oscar Cortez is not a political junkie, but he knows lawmakers are discussing bills that could affect how much money flows into his pocket on a daily basis.

A server for the past five years at Nuestra Tierra restaurant in downtown San José, Cortez has heard the bills would reinterpret a three-decade-old law setting the standards for tipping.

He acknowledges, however, he is not sure what the bills mean.

Tipping in Costa Rica should be a rather traightforward affair, as a 1972 law requires that a 10 percent servicio be tacked on to every restaurant and café bill.

But confusion abounds as to whether the tip should be considered part of the servers’ salaries. If so, as the Labor and Family Branch of the Supreme Court ruled in 1995, restaurants owners would have to include tips with salaries in the total compensation upon which payments to the Social Security System (Caja) are calculated.

Restaurant owners cover two-thirds of that payment to the Caja. Employees pay the rest.

Servers make a minimum daily wage of ¢5,472 ($10.60), according to the Labor Ministry. Some servers can earn three to four times that in tips.

The Libertarian Movement Party and the Citizen Action Party (PAC) are pushing legislation that would call for an “authentic interpretation” of the 1972 law, which, they say, never intended tips to be considered part of the servers’ salaries.

The bill is in first debate in the Legislative Assembly.

Meanwhile, the Social Christian Unity Party (PUSC) presented legislation that would enforce the Supreme Court’s 1995 ruling, which defines tips as part of a server’s salary.

The PUSC bill is before the assembly’s Social Affairs Commission.

Proponents of both bills say their legislation is in the best interest of food industry workers.

The Libertarian and PAC bill sponsors say theirs will prevail.

“Tips have never been (factored in as) part of salary,” said Ovidio Agüero, Libertarian leader.

Should tips suddenly be included, Agüero predicted, unemployment would increase as more restaurants buckle under the weight of extra Caja payments.

His colleague, Mario Enrique Quirós, said the party’s call for an authentic interpretation was meant to “set the record straight” with the 1995 court interpretation.

Quirós said PUSC’s bill would punish servers because wait staff would have to pay a greater portion of their earnings to the Caja as well.

PUSC lawmaker Jorge Eduardo Sánchez called the Libertarian-PAC legislation an “atrocity” and a “step backward” in labor rights.

“They (Libertarian and PAC legislators) want to defend the restauranteurs’ rights,” said Sánchez. “I want to defend workers’ rights.”

Less money flowing to the Caja means less available funds for pensions, year-end bonuses, unemployment pay and workers’ compensation claims for servers, PUSC members and their supporters argue.

Should the coalition’s bill succeed, they fear servers will have no proof of payment that they received their share of the 10 percent slice of daily sales.

“(The 10 percent service tax) won’t show up in the Caja,” said Alvaro Oviedo, of the Regional Campaign Against Labor Flexibility.

“There’s no proof that (servers) received 10 percent.”

Erick Gutiérrez, general manager of Gran Hotel Costa Rica and former president of the Costa Rican Chamber of Restaurants, said servers’ tips are three to four times more than their salary. Paying that extra amount to the Caja could break businesses financially.

“No restaurant has the economic ability to do that,” he said.

Edgar Marín, current president of the restaurant chamber, thought servers and the Caja would benefit unjustly under PUSC’s bill.

“If the tip were salary, (restaurant owners) would not have to pay a salary,” Marín said.

Oviedo doubted all servers shared Gutiérrez’s view. The only union for that sector, he said, was no longer functioning.

“That’s why it’s been really easy to speak in the name of someone who doesn’t exist,” Oviedo said.


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