Tip Sharing

Factual Questions
41

I worked at a very nice restaurant in Cincinnati for a time where all the servers, bartenders and bussers shared in a tip pool. It was a pretty big place with quite a few employees and the tip pool worked well in the sense that it kept peer pressure on everyone to do as good a job as possible to encourage better tips.

Cash tips were placed into a slot in a table that went into a box. The only flaw in the system was the possibility of someone pocketing cash tips, but being in the pool kept us watchful of people we suspected of doing that.

Every day during our staff meeting two people were randomly selected to calculate the previous night’s tips. All the monies were divided by all the hours worked to calculate an hourly rate. Bartenders and servers made a full hourly rate, bussers would get half of that (but they got paid more per hour). The hourly rates were almost always $20/hour or more (in cash), and this was in the mid-1990’s.

42

I’ve worked in service for most of my life, everything from beer halls and pubs to swish fine dining and high end catering. I’ve seen this kind of thing before. Places like this don’t attract the best skilled servers and there is usually a high turn over of staff.

The evolution of such exploitative practices was probably innocent enough but many owners have just run with the opportunity to reach into the servers pockets.

There was a time when the servers alone got gratuities and the rest of the staff was paid a decent salary. Good servers, in good restaurants made a lot of cash.

Some sharing of tips is quite natural, think of a busy bar with 3 bartenders working. Should they each keep the tips only on the tabs they collect? That would quickly impact service negatively, bartenders would be more interested in collecting tabs than serving drinks! So they, of course, pool their tips and then divide them equally at the end of the shift, it makes a lot of sense.

Now throw in some underpaid bus boys and barbacks. The owner doesn’t want to absorb the cost of paying them a decent wage, and the servers need them at their beck and call. So they tip out, for being there to help when someone spills something, for helping turn tables and increase their income. Ditto servers tipping out to the bar, it’s quite possible for the restaurant to be busy but the bar not so much, the servers need fast service from the bar to make decent tips, so it’s a natural evolution.

When restaurants start to feel the financial crunch, instead of paying the kitchen staff a decent amount it’s very tempting to take a cut of the servers tips, and pay the chefs. In my opinion, it’s not right. The only people who should be getting tips are the people on the front line, sweetly smiling while taking grief from obnoxious JQ Public. But it’s becoming more common all the time. It usually leads to high staff turnover and the best servers moving on to more lucrative arrangements.

More and more, it’s common to have to pay a ‘kick back’ to the house. Usually not a full share, but 2 - 3 %, of sales, seems common where I live. Is it right? No, it’s not. Is it illegal? No, actually, it’s not, at least where I live.

It is not without cause that the restaurant business has a reputation as being exploitative of staff. There are very few regulations covering this sort of thing. Same with charging staff for ‘breakage’, either per item or some small percentage per shift. Technically, where I live, it’s illegal, but the owners just call it something else and suddenly it’s okay. It’s still not right. I always said if I worked in a place that charged me, every shift for breakage, I’d be damn sure I broke something every damn day! Truth is I wouldn’t work in such a place. Period.

Some servers simply pocket their cash tips and only own up to the charge ones. For myself I’m not willing to do that, so I don’t work in places that do these things. Auto grats, server to kitchen staff or bartender are counter productive in the same way auto grats for all service would be. Why would I be happy and cheery and accommodating of your every picky need if I was going to be tipped the same regardless? With an auto grat why should the bartender/busboy/cook be responsive or accommodating to the servers, if they are getting the grat either way? It’s flat out not a good system.

In the best places, the percentage of tip out, to the house, is low or non existent. The tip out to busboys/barbacks/bartenders is a suggestion. And the front of house staff doesn’t subsidize the wages of the back of house staff.

All of these things are on the ragged fringes of legal. I think you’ll find that agencies, charged with regulating such things, unwilling to act for this very reason.

The bottom line is that if an owner who can’t turn a profit, without reaching into the servers earnings, his place is probably teetering on the brink of going under.

I hope this helps cast some light on why it’s this way, why it’s not more carefully regulated and what can/cannot be done by the server in such cases.

43

I bartend at a place that gets a lot of service staff from restaurants, so I hear a lot of stories and gripes…and this one takes the cake. At this classic “institution” of a steakhouse that’s been around forever, the gratuity on party rooms is split IN HALF with the “house.”

So if you reserve a room for a large party, and your bill is $800 bucks, and the auto-gratuity is $160, $80 of that money goes to the steakhouse. Not the waiter. They consider it a “room rental fee” or some such nonsense. Rather than passing on that cost to the customer, they steal half the waiter’s gratuity for the night.

And if the waiter tells the customer about this practice–perhaps hoping for a bigger tip on the side–they will be fired.

This takes “tip sharing” to a whole new level…

44

Update: My daughter sat down with the owner and explained her concerns, showing how the tip-sharing system was a violation of both state and Federal law. The owner said, “It’s fine. Everyone agreed to it as a condition of taking the job, therefore everyone’s okay with it.” My daughter tried to explain that things don’t work that way (imagine hearing, “All of the 12-year-olds working here for half minimum wage agreed to it, so it’s fine”).

She said, “I can’t work in a place that’s knowingly breaking the law,” and the owner said, “bye.”

This is a small town. Everybody knows everybody. The owner of that restaurant has been here for decades (and used to work for me). If my daughter makes a big fuss, it’ll blow back on our family businesses in town, and she’ll have a harder time getting work elsewhere.

So, she’s out of a job and nothing has changed.

Yes. It is illegal under United States Federal law (unless it’s a transaction fee for credit card processing). See the first quote in post #27.

45

Good for her. It’s bad enough that they blatantly rip off their employees this way. Who knows what other laws they decide to ignore, like health and safety regulations.

Life is hard enough.

46

Wait, did she QUIT, or was she FIRED? Firing someone because they blew the whistle on your illegal activity is a BIG BIG no-no.

47

She needs to covertly nark them to the department of labor. The owner is blatantly breaking the law, and cheating his employees.

If the shit does hit the fan in the town, a simple "he is breaking the law and cheating his employees. What is friendly and neighborly about those actions. So you think you should pay your employer for the privelege of working at <name of location>?

48

I was summarizing.

The owner said, basically, like it or leave. You agreed when you hired on.

She decided to stick it out, but got yelled at the next morning and decided to give two weeks notice. She was walked out immediately.

49

Well if she’s no longer employed there I’d file a complaint. Now she’s got nothing to lose. My old employer required a tipout to other employees and failed to pay us for breaks and was forced to compensate us for them. My own check was ~$350, so it wasn’t chump change.

50

You must have missed the part where he said that making a big stink in their small town would be bad for them. There isn’t much they can do unless they’re willing to martyr themselves over what, in the grand scheme of things, is a rather minor issue.