Mandatory tip entry fees deemed illegal - Cleopatra strip club ruling

 
For decades certain bars, parties and other events have charged an informal entry fee of $2 or $5 or so in exchange for being allowed inside.  

   The cover fee is described as a sort of mandatory tip, so the customer is not given a receipt and no tax is paid on the transaction. 

   This means, of course, that a customer could simply say that he wishes to enter without paying the tip and the bar would be forced to oblige although that might lead to some friction.

   After long turning a blind eye to the practice, the Quebec government decided to crack down on the practice, so it sent undercover inspectors to Cafe Cleopatra strip club on the Main to investigate in November 2019. 

   Cleopatra's is a venerable old-style strip club that has withstood intense pressure from various levels of government attempting to eradicate all traces of the old sexiness of St. Lawrence. So it might be suspected that the target of the government raid was politically motivated.

   When the undercover inspectors attempted to enter Cleopatra's, the doorman blocked them and asked them for $5 to enter. They tried it again the next day and the same thing occurred.

   Revenue Quebec hauled Cleopatra's in front of a judge on 11 March 2021 to charge the bar with tax evasion. 

   Johnny Zoumboulaki, who has owned the bar since 1985, explained that they have a sign clearly posted explaining that there is no entry and a tip is at the discretion of the customers. The bar brass said that they are not required to report the tips because they are not an official transaction involving the club. 

   Zoumbalakis argued that the tip represents a sort of appreciation for the protection that the burly doormen offer to patrons inside the club. He mentioned that customers who spend a lot of money on video poker machines are not asked for a tip because they're already spending a lot in the club.

  A regular named Morrie Eisenberg, who has visited the club two or three times a week for the last 18 years, testified that the doormen, who include Shawn Denny and Martin Delorme, don't ask him for tips.

   Judge Julie Laliberte ruled against Cleopatra.  Another meeting took place on 17 September to figure out how much to fine the club.  

  So be warned: the practice of asking for an informal cover charge, whether it be for a beer bash, or a party or any sort of event, is now officially considered illegal.