I suppose technically the employer could create an invalid tip pool, make the servers participate, then fulfill its legal requirements by refunding the servers’ contributions and paying them the full minimum wage. But this would be much more complicated and expensive than just paying the back of the house workers more money and not creating the tip pool at all.
Well yes. I don’t know what drives restaurants to do it. Maybe it’s the “assign 1 server to a party of 20 and charge a set gratuity”. Maybe the idea is that some customers are cheapskates and don’t tip well regardless of service. Maybe it averages out to them paying out less in making up the difference to minimum wage, so they don’t care if it’s fair, it helps their bottom line. In fact, that’s probably the reason.
It’s illegal because to do so you have to take money someone else earned. It’s not money the restaurant has earned, they got theirs. It’s the servers money. Period.
Would you let someone take some of your earnings to top up the lowest paid workers where you work? Would “well we don’t pay them enough”, change your mind? I thought not.
Realtors work on commission, do you think it would be okay to take some of that money from the top earners to pay the office staff? I think not. It’s unethical, that’s why.
This sounds like an argument against front-of-house pools, in which the lower-tipped wait staff are given money taken from the better-tipped. That apparently is legal.
Meanwhile, pooling with the kitchen staff that actually makes the food–whose competence and hustle, one would think, is essential to the front staff getting any tips at all–is illegal? I am not seeing the logic here.
The back of the house is paid a wage. The servers where tips are expected are paid a smaller wage with the expectation that their tips will make up the difference. If they don’t, the restaurant has to meet minimum wage.
Tip sharing with the back would, therefore, take money that is calculated as part of the servers’ wage and give it to the back of the house, who are already earning at least minimum.
Now you have a point that much of the experience the customer sees is controlled by the folks the customer doesn’t see. If you wanted to tip them, I’m unsure how you would do that. But the customer interface is the server (and perhaps busboys, though very tangentially).
Tip pooling from just the servers acts to reduce the restaurant’s expenses. Theoretically, it could be used to cover cases where, for instance, a cheapskate party stakes out a table for several hours, getting refills and such, then leave a small tip. Or even a regular tip, if they didn’t keep buying food the whole time, will lead to a smaller total than rotating two or three groups through.
It also helps with shift changes. Customers start with one server and end with another. Who gets the tip?
It’s not the house’s money to disperse. It is money that the server earned from the customer. Period.
All those kitchen shows exist for a reason, professional kitchens can be hotbeds of tyranny and servers have to suck up abuse more often than you imagine. Often in attempting to meet special requests of the customer.
I’m not going to say this never happens, because I’m sure it does. But I’ve been hearing this for my entire adult life (at least since 1980), and I just can’t figure out why these servers who don’t manage to get at least minimum wage over some period of time don’t move on to minimum wage jobs.* I understand that being a server at some mom-and-pop diner isn’t going to help you get a job as a server in a high-end restaurant - but I was hearing this back when anyone who could breathe could get hired at a fast-food restaurant and those folks tried to get hired at Sizzler because the tipped servers there made more than minimum wage. What am I missing?
I can understand how someone who makes less than minimum wage on their weekly Tuesday shift might stay if their Friday and Saturday shifts bring them above minimum for all the hours worked that week, but I don’t think that’s what you’re talking about.
I’d argue that what they said actually implies the exact opposite. They made a big point of saying 9% will not be going to the servers. So it won’t be going towards increasing their salary. Heck, the implication in the note is that they were already paying their servers a living wage, not that they suddenly chose to do so.
Now, I know that’s not necessarily the whole story. If I were the OP, I’d ask for an explanation since they like the place. And, if what they say isn’t that, I’d explain why what they said sounds bad.
But I as a new customer would just feel uncomfortable eating there because of the message this notice sends.
That’s one way to read it - but it’s not the only way. They might just be trying to let the customers know that it won’t be going directly to the servers in the same way that even mandatory gratuities do- maybe it’s going to fund an increase in their set hourly wage, but the 9% collected on the Tuesday dinner shift isn’t going to be split among those working that shift , while the 9% from Friday night goes to those working that shift which is how mandatory tipping and tip pools often work. ( which is another reason why they might be doing this- with tipping, certain shifts are more lucrative than others, and the restaurant collecting a 9% service charge allows them to pay each shift the same wage rather than the Friday dinner shift ending up with twice as much as the Tuesday lunch shift)
Given the literacy, clarity and truthfulness of most such signs, even the most expensive engraved ones on marble walls, I don’t know that you can read all that much into the text. I don’t have trouble reading it as “we’re jacking our prices 9% to pay better wages without tips” but that the owners want to stress that this is not a substitute route for some kind of fixed tipping scheme.
But as I said, we have two claims - no tipping and the 9% surcharge - and the fact is we have no idea what else is going on in that restaurant, or how (or even if) the two items are connected.
That’s it. As a culture, we tip, and we don’t pay surcharges. This place is swimming up a rather strong cultural current trying to do either, much less both. I think in the medium run it’s going to degrade their business, as regulars move on and new customers are put off by the unusual demands. It’s not about financial sense; it’s about diner expectations and comfort, and both of these moves are against normal expectations and slightly uncomfortable to deal with.
Because it imposes two odd requirements on patrons. I guess you could argue that it doesn’t matter to anyone who isn’t a patron, but if discussion here was limited to personal, shared experiences there would be about 1% of the postings…
It’s an interesting situation to consider, both in the OP’s case and in a general sense. What if we did away with tipping, knowing that waitstaff got as good a wage as any worker in a similar situation?
If I ran into a restaurant stressing they pay their waitstaff a living wage so no tipping, I’d welcome that. I might ask my server the details if they didn’t mind sharing, but I’d have no problem with that.
The 9% surcharge that is not a forced gratuity would annoy me, however.
I recently went to a restaurant that had a sign on the door that, due to recent egg shortages, the prices for meals with eggs would get a 50 cent surchage. This was expected to be a short term effect due to chicken slaughters from illness, which I had heard about on the news. I had no problem with this, because the intent was short term and the hope that their prices would return to the menu prices in the near future. They informed me up front.
I get somewhat annoyed by mandatory gratuities in larger parties, but I understand the impulse there to protect the waitstaff since that is considered part of their wage from the restaurant’s perspective, and cutting the “gratuity” means the restaurant has to cover the shortfall. It irks, but there’s not much I can do since it’s fairly widespread and I’m only subject to it when I’m with a group, which probably decided where to eat collectively.
Being told there’s a surcharge added to my bill not in the listed price is more annoying, since there’s no reason for it to be expected to be short term. Ergo, just adjust the menu prices and be done. If I know I’m not tipping, I can mentally adjust a slightly higher menu price against other restaurant prices with tips.
Whether or not they are stealing from the waitstaff, it feels like they are stealing from me.
Bumping this thread to link to the article below about famed NY restaurateur Danny Meyer eliminating tips at all his restaurants. He makes many of the points I made above about eliminating tips and raising prices to better compensate the back of the house.
He also points out a few things I didn’t mention – raising the prices may increase his costs in other ways. His rents are tied to gross receipts, so when he raises prices, his rent goes up. He also has to pay FICA taxes on the higher wages when he didn’t pay them on the amount of tips. He’ll also pay more in credit card fees because when people tipped on a credit card, he could deduct the amount of the credit card fee that was attributable to the tip from the amount he actually gave to employees.
Finally, the article notes that minimum wage in New York is rising for tipped servers, for the back of the house, and for fast food workers, but it is rising much more quickly for the servers and fast food workers. Meyer needs skilled chefs and they are already less compensated than the servers in his restaurant. He needed to make a change to retain good back of the house help. Eliminating tips and raising prices gives him a pool of money to work with while he revises the compensation schemes for the front and the back of the house.
I don’t see how eliminating tipping is really part of that, except that I suppose it makes raising prices an easier sell. At first. He’s going to have to make sure his service is really impeccable at all times, though.
That’s part of it- whether I pay $50 for a meal and leave a $10 tip, or pay $60 and leave no tip, the cost to me is the same. And if I pay $65 and leave no tip, it’s only gone up five bucks. But that’s not the biggest part of it. The biggest part is that if that 20% is a tip, it belongs to the server(s) as soon as the customer leaves it. There can be a tip pool, but only tipped employees can participate, so not one cent of that tip can be used to compensate the other staff. If it’s included in the price, or is a service charge it doesn’t belong to the server(s) as soon as the customers leave it- it’s the restaurant’s revenue and can be used to raise the pay of the cooks and dishwashers as well as the servers.
Might it decrease the server's pay? Maybe- but there are always people who will pay the 20% price increase or service charge and *also tip*. Even if it does decrease the servers' pay, none of this is going to happen at restaurants where servers aren't making way above the regular minimum wage. Because the disparity becomes a problem when the servers are making far more than the cooks, not where the cooks are making $8/hr and the servers make $10/hr including the tips. And in Danny Meyer's case, he's going to have to raise prices anyway- once the fast food minimum wage in NYC goes up to $15 an hour, he's going to have to raise the wages of his kitchen staff to exceed that.