For Less Than a Dollar a Day, You Can Give Your Cruise Ship Crew a Raise

[Jason]

Cruise lines are increasing their daily tip charge, offering a modest boost to some of the industry’s lowest-paid workers, as U.S. fast-food, retail, and airport workers push for raises of their own.

Two of the three largest cruise lines are raising their automatic gratuity charges by 95¢ a passenger. Royal Caribbean Cruises, the second-largest line, said it will add $12.95 per guest per day for all Royal Caribbean and Celebrity sailings that depart July 1 and after; cruisers who stay in suites are assessed $15.95 a day. Norwegian Cruise Line Holdings imposed a 95¢ increase effective March 1, with the charge for guests in suites rising to $14.95 a day. A couple on a weeklong cruise in a balcony or inside cabin would pay $181, with a family of four paying $363.

Customers on the cruise brands that charge a default gratuity can choose to raise or lower the amount before they disembark, while upscale lines—including Regent, Crystal, Seabourn, and Silversea—incorporate the staff gratuity in their fares. The gratuities add up to an estimated $200 a week for crew members. A seven-day cruise aboard Royal's massive Allure of the Seas, which carries 5,400 passengers and almost 2,400 crew, could generate roughly $450,000 in gratuity income. The three largest cruise lines say they distribute all the tips to crew members who staff eligible positions.

Since 2013, the Service Employees International Union has been coordinating a national “Fight for $15” campaign to increase wages and union representation for workers in fast food, retail, and home health care. Wal-Mart Stores recently began paying about 500,000 of its workers at least $9 an hour, spurring TJX, the parent of the T.J. Maxx and Marshalls retail chains, to match that wage starting next month. Seattle and San Francisco have both adopted a future minimum wage of $15 an hour, compared with the federal minimum wage of $7.25, with similar campaigns in at least eight other large cities and four states.

The cruise industry, in which the lowest-paid workers don't belong to labor unions, has been attacked for years over its wages and work schedules, which can stretch to more than 80 hours a week. The cruise lines don't disclose the terms of their staff contracts. Norwegian said its gratuity increase was the first in nearly six years.

The industry's wages “are in high demand because they are not only competitive with the international pay scale but often exceed compensation in crew members’ home countries,” according to the Cruise Lines International Association, the industry’s trade group. Americans generally don't staff the service jobs on cruises.

This fall, Norwegian’s Oceania line will boost its daily gratuity charge $1, to $16 and to $22 for those in penthouse suites or above. The largest cruise line, Carnival, adds a flat $12 daily gratuity on its eponymous brand for all guests age 2 and older. Of that amount, the company says dining room staff receive $6.10 a day, stateroom staff $3.90, and other service crew $2. Royal Caribbean has five levels of gratuity distribution, ranging from $7.75 a day for employees in dining and food service to $1.35 for some housekeeping roles.

Those who work in dining rooms and as cabin stewards, along with what Norwegian calls “behind-the-scenes support staff,” rely on the default gratuities as an integral component of their income, which is typically based on six- to 12-month employment contracts. Tabs at ship bars, spas, and specialty restaurants usually include a surcharge of 15 percent to 18 percent for staff who work in those venues.

In the U.S., food preparation and food service have the highest concentration of workers who earn less than $15 an hour, the National Employment Law Center said in an April report, which found that 42 percent of workers make less than that amount. The center is among those campaigning for higher wages. On Friday, 18 U.S. senators wrote President Barack Obama requesting that he issue an executive order giving preference on federal contract awards to “model employers,” citing Costco as an example. Last month, Democrats introduced a “Raise the Wage” bill aimed at increasing the federal minimum wage to $12 by 2020. The NELC report didn't research cruise line wages.

The mix of salary and tip income on the high seas is more complex. Carnival’s Legend, which carries 2,124 passengers, will generate about $178,000 a week in gratuities this summer on its weeklong cruises in Alaska. The Legend has a crew of about 930, although many of those, such as senior officers, aren't eligible for the tips. Lines with larger ships, such as Royal Caribbean and Princess, and those that assess more per day for suites, would be expected to generate higher gratuity totals.

By Justin Bachman, Bloomberg Business

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[jacketwatch]

I wonder as practically all of these workers are foreign what goes on with taxes. Does the cruise,line provide income information like in the US or is it up to the employees to do this to their respective govts.

[Jan115]

It's my belief that In most cases, it's up employees to report their income to their respective governments, but I think it comes down to the tax requirements for that particular country. If anyone knows anything to the contrary, please correct me.

[DebbieandJerry]

My guess is that the ship's registry correlates to the country of origin for employment and there are no taxes to report if your country doesn't do that, which is why the pay can be for so little and the hours for so long.

[jacketwatch]

Next time we cruise I'll just ask some of the crew.