Why Tipping Should Be Outlawed (article) and interesting read.

Discussion in 'Food & Cooking' started by michaelga, Jun 24, 2013.

  1. michaelga

    michaelga

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    Not sure if this is the right place but it seemed to be the only place....... re-pasted in whole so you can avoid the adds and lead-out links.

    From Esquire.com | Shine Food   Jun 20 2013

    It was the coat check tips that did it, back when I was working for a restaurant company and became friendly with a woman who staffed one of our hostess stations. It felt strange and demeaning to go from chatting about our weekend plans one minute to pressing a couple of sweaty bills into her hand in exchange for my coat the next. But to abstain would be even worse - it would mean neglecting my contribution to a pool of money that I knew comprised her income. I get the feeling she wasn't too keen on the power dynamics, either.

    The friendships I've formed with restaurant employees over the years have made me think seriously about why hospitality workers are singled out among America's professionals to endure a pass-the-hat system of compensation. Why should a server's pay depend upon the generosity - not to mention dubious arithmetic skills - of people like me?

    So I was thrilled to hear that New York City's Sushi Yasuda recently decided to eliminate tipping altogether. Including gratuity for parties of six or more has already become relatively commonplace; in a few restaurants, like Thomas Keller's Per Se and The French Laundry, it's automatically added onto all checks. But Yasuda has gone one step further, dispensing with service as a separate line item - and implicitly, an "extra" - and folding it into their prices as a cost of doing business, along with the rent, and electricity, and ingredients.

    If I had my way, we'd take this idea to its logical conclusion and get rid of the practice of tipping altogether. Just outlaw it. Here's why:

    1. People don't even understand what a tip is

    If you are of the belief that a tip is an optional kindness you're doing for your server, you might be surprised to hear that you are not in France. Here in America, the practice is voluntary only in the legal sense of the word. You are not technically stealing if you don't tip the customary 15 to 20 percent, but that's probably the best that can be said of you. The tip you pay is a sort of wage: federal law allows tips to be used to make up the difference between a server's salary and minimum wage, meaning they can make as little as $2 to $3 per hour from their restaurant employer. Tips are absolutely depended upon to make up the shortfall.

    When you leave a bad tip, you are docking a person's wages. This may either be because you're confused about what's expected or because you're an asshole, and you really believe that your sea bass arriving lukewarm is justly punishable by making it a little harder for the guy who brought it to you to pay his rent.

    2. Doctors don't live on tips. Nor do flight attendants.

    Tip confusion is understandable, because it's not the way we choose to compensate most of our other people-facing professions. Imagine if when you went to the doctor, you decided how much he got paid based on how happy you were with the diagnosis; or if actors and musicians were paid discretionary sums by the audience, post-performance. Even within the context of the restaurant, some roles receive salaries and others rely on tips. Why do I tip the bartender who made my Manhattan, but not the line cook who grilled the excellent steak I'm eating with it? It's completely arbitrary. Servers, whose job demands are not fundamentally different than that of hard-working office assistants, or hotel concierges, or spin instructors, or flight attendants, should be paid the competitive wage for what they do and how well they do it, and that cost should be factored into menu prices.

    3. The percentage basis makes no sense

    Did a server work less because I ordered a $40 bottle of wine than if I had ordered a $400 one? Should I feel a little bit bad when I'm a party of three on a table for four, as the waiter is getting stiffed on 25 percent of his or her optimal tip? Is it less hard to work at a roadside diner than Le Bernardin, where the check averages are approximately ten times higher? (Although that one isn't entirely fair; a place like Le Bernardin is dividing the tip among a much larger staff).

    4. Better service doesn't actually beget better tips

    Diners love the power to bestow or withhold financial reward at their whim; servers, in turn, seem to be motivated by the idea that really excellent service could be rewarded by a monster gratuity. The trouble is, that's not actually how things pan out in practice. Michael Lynn, a professor at Cornell's School of Hotel Administration, has spent his career researching tipping behaviors, and found that perceived service quality only accounts for two percent of the variation between tips. Two percent! It's probably not even enough to be picked up on by the server, much less cause a significant change in behavior.

    5. It perpetuates racism and sexism

    Lynn's research also shows that tip amounts are affected by racial and gender discrimination. Female servers get larger tips than male servers; sexy women earn more than frumpy ones; white servers, more money than their black counterparts - regardless of what the perceived quality of service is. The system works the other way, too. Black diners tip less on average than do white diners, and research shows that servers provide black diners with inferior service as a result. The tipping system catches us all in a regressive cesspool of our own worst prejudices.

    6. Smart people have been trying to end the tipping practice for a century

    Backlashes against the tipping practice are not new. There was an anti-tipping movement at the beginning of the 20th century amongst Americans who saw it as an aristocratic holdover contrary to the country's democratic ideals. Between 1909 and 1915 six states passed anti-tipping laws, all of which were repealed by the mid-1920's as unenforceable or potentially unconstitutional. Samuel Gompers, who founded the AFL, was one political figure notably outspoken against tipping as promoting detrimental class distinctions.

    But despite all this, the country as a whole has been loath to abandon the tipping convention. If knowing all of the above, you still balk at the idea of a service charge being rolled into the cost of your meal, maybe you should ask yourself why this is. Are you unwilling to participate in what a restaurant judges to be the fair, market-rate compensation for its employees? Do you think that you are a pawn in a nefarious plot by management to grossly over-reward servers, those men and women who are on their feet for eight hours, ferrying your drinks and foods to and fro? Do you believe that you are in a better position than the restaurant manager to motivate and evaluate his or her staff and make the complicated decisions about compensation and employment?

    If yes, can I march into your office and adjust your pay depending on how well you do in our meeting? Or - more accurately - depending on your skin color, your breast size, or your age? Well, of course not, is the answer to that one. Because that would be barbaric.
     
  2. chefross

    chefross

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    I agree and have held this opinion most of my 40 years in the business.

    I've never understood the basis for underpaying an employee and using other people's kindness to make up the rest.

    I'd love to hear what my peers have to say on this..........

    I also would double dog dare anyone to come up with any pro's to tipping that are not self-biased. 

    The hardest part of all of this is convincing the public to change.
     
  3. chefedb

    chefedb

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    A tip is a compensation for something done for you out of the ordinary or for an extra sevice given you.   However the way our system is if tipping were abolished  restaurants would have to pay a decent wage and therefore price of your dinner would rise a lot. So its like a catch 22.
     
    Last edited: Jun 24, 2013
  4. kuan

    kuan Moderator Staff Member

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    Maybe we'll have better restaurants where professionalism actually counts and where eating out is actually a treat.
     
  5. foodpump

    foodpump

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    Hooo-boy.......

    I've taken part in, shall we say, "Colourfull" discussions on another forum regarding this very topic.

    Here's what I've learned:

    -I am a non American, (but, I am N. American) therefore my views are substandard.  So are the views from the French, Italians, Germans, Australians, N. Zealanders, etc., who are all lousy tippers, and who should do "as the Romans do when in Rome".

    -Many parts of the US have a "tipping wage" where the minimum wage is totally ignored and instead a bare-bones wage of, I believe, $2.80 in  some places, in enforced.

    -"Tipping wages" was an idea lobbied and brought into being by the NRA (nt'l restauranteurs ass'cn).  To date no one was opposed this, or even challenged it before it was passed.

    -No Union has ever challenged the tipping wages, which makes me very suspicious since Unions get thier dues in the form of a percentage of the employee's paycheck.

    -There are no standards or benchmarks for servers, therefore no pay scale can be established.

    -The server gets tips in the form of a percentage of the entire dining experience (total guest check).  How ever hard the server works, s/he is not responsible for the entire dining experience. This is not fair.

    -Tips are not a form of commission.  No discussions between the guest and server prior to the dining experience regarding tips are discussed, the tip is entirely discretionary and therefore not a commission.

    -No one really wants to do anything about the situation, but the whinging and moaning about how the rest of the world are lousy tippers is rife.
     
  6. petemccracken

    petemccracken

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    As a restaurant owner, which would you rather market?
    • A dinner for, say, $19.95 where tips are expected, or
    • A dinner for, say, $19.95 plus a service charge/gratuity/fee of $4.00, or
    • A dinner for, say, $ 23.95 where a 20% service charge/gratuity/fee is part of the price.
    As a FOH server, where would you rather work?
    • A "tipping restaurant" where the dinner is $19.95 and you get 5 covers/hour with an average tip of 10% (5x$1.95=$9,75) plus $2.50 tipping wage = $12.25/hour (and a chance to earn, maybe, double that if it gets busy or tippers are more generous), or
    • A non tipping restaurant where you get $7.00-$10.00/hour wage with no chance to earn more.
    When Thomas Keller replaced tipping with a "service charge", there was an outcry from the FOH personnel as their "pay" suffered a severe reduction, of course, as the "service charge", under Keller's direction, was shared with BOH personnel which made them happy.

    The point? Changing the business model will require substantial changes for:
    • the customer
    • the FOH personnel
    • the restaurant owner
    • the BOH personnel
    and will probably involve governmental intervention to accomplish.

    There needs to be an informed discussion at many levels and it will probably involve subjects such as
    • "living wages",
    • which job contributes what,
    • what the consumer is willing to do
    • what the government mandates
    • what the unions will tolerate
    • what the restaurant owner(s) are willing to do
     
  7. foodpump

    foodpump

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    This is the same conclusion I came to at "the other forum".

    It was NOT well recieved. However, owing to the fact that I am not American, it was easily brushed off and ridiculed for the simple fact that I am not American.
     
  8. meezenplaz

    meezenplaz

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    There seem to only be a handful of states (id have to look em up) who dont adopt the tip-as-part-of-your-wage

    mentality, legally and taxably speaking. (Here in) California being one of them, minimum wage of 8.00

    per hr is paid by law to secretaries and servers alike, with time and a half overtime, unless worker is an overtime-

    exempt manager. So here the FOH hiccadies and chicadees get their 8, plus tips, and taxes are based on wage

    plus an assumed 15% tips based on gross sales served, which is documented and reported.

    Most servers in full svc restaurants average more than that--so if they averaged 18%, then they get that 3% tax-free.

    The interesting thing is that by and large the mentality remains the same as you guys in tip-supplemented salary states,

    wherein most servers STILL consider that damn tip as part of their salary. And heaven forbid you be so rotten as to ...

    withhold.... it from them for whatever reason.

    In my book, tips are supposed to be extra, FOR extra, going the extra mile. Not for the server showing up to work,

    often wearing their whole life on their shirtsleeve, and doing the bare minimum, or a lot less than, the job requires.

    With that in mind, generally fair-to-midland service with say 15% tips, I fear that outlawing tips HERE would be

    rather catastrophic, especially from the perspective of the customer. Whatever negative or "granted" attitudes

    are prevelant now would certainly multiply from that event.
     
  9. brandon odell

    brandon odell

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    I'd expect a "no tipping" allowed mentality coming out a chef forum. Tips have always been a source of contention between front of house staff and back of house staff. The current "no tipping" policy push is nothing more than a veiled attempt by disgruntled people with BOH backgrounds to "even" the wage field. There is no real upside. Proponents talk about paying servers a "living wage", but there are already business models in place to make real life comparisons to invalidate that presumption. They're called "private clubs". MANY private clubs have no tipping policies and charge a service charge that becomes part of the revenue for the club. The reality is that the "living wage" is significantly less than an average server can make in an average full service chain restaurant, and ridiculously less than a great server can make in a good or great restaurant. Going to a "no tipping" model is NOT good for service staff. That's why you won't find service staff supporting this model. That's why you won't find unions supporting this model. The very people most greatly affected by this type of policy don't want it. I find most the arguments "for" this type of policy nefarious at best. Most of the supporting "studies" are poorly put together and set up to deliver a pre-determined outcome. They don't stand up to peer review. Most any owner or experienced general manager, even experienced server, can blow holes in most of the "points" made by people pushing "no tipping" policies.
     
  10. foodpump

    foodpump

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    Here's one:

    The server is tipped a percentage of the entire dining experience.  No matter how hard the server works, s/he is NOT responsible for the entire dining experience. Why does the server assume the entire tip is for him/herself?  You can't escape gravity on earth, and you can't escape logic.

    Here's another:

    Unions get their dues by garnisheeing or taking a cut from the member's paycheck.  If, in a 'tipping wage" State, the server earns under $3.00/hr. the Union is getting diddly-squat, they can't garnishee tips, since they don't come from the employer.  Something smells fishy.

    Here's the kicker:  How can you have a double standard?  On the one hand, a minimum wage, and then on the other hand, thumb your nose at the minimum wage, and install a tipping wage?
     

    And the last:  What standards or benchmarks are in place for servers?

    It's not just boh staff that are P.O.'d with his system, it's the customers too.  And they're the ones who have to fork out the tips.
     
  11. brandon odell

    brandon odell

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    What the server is tipped on is determined by the customer, not the industry, not the restaurant. That has nothing to do with this argument. The server takes the tip because the customer is leaving it for them. Its the customer's expectation that servers get the tip. They also do not keep the entire tip themselves. They split the tip with other service positions who also make a reduced wage supplemented by tip dollars, like bartenders, bussers and hostesses. How they split it is sometimes up to them and sometimes up to the house.

    As far as unions go, who cares? They can't push servers to want something that isn't in the best interest of the servers. Unions are very weak in the restaurant sector as a whole anyways. A very small percentage of servers are unionized. They don't push for "no tipping" policies because they can't. If they are truly in business to serve the best interests of the servers, they shouldn't anyways.

    If you think there is a "double standard" because of a "tipping wage", then you don't understand minimum wage law. The same minimum wage applies to servers as every other employee. The difference is, a business can include a server's tips in calculating whether or not they are making minimum wage, and pay them a lower hourly wage as long as their tips bring them above minimum wage. Either way, they still have to be paid above minimum wage. If they don't make enough in tips, the restaurant has to make up the difference.

    "Standards" and "benchmarks" for servers are the responsibility of the business, just as they are for cooks. Just because you don't know how server performance is measured doesn't mean it isn't. That whole comment just screams of blind bigotry against service staff and your next statement about customers having a problem with tipping confirms it. That is totally imagined. If you think customers have the biggest problem with the tipping culture, you haven't spent any serious time in the dining room.
     
  12. foodpump

    foodpump

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    Whoa, a lot of issues there.

    1) You forgot to split the tip with the boh, who are, partly responsible for the entire dining experience, as are the busboy and hostess.  Food is one of the main reasons for the customer coming to a  restaurant.

    2) My love for hospitality Unions hasn't been discovered yet.  However, most Hotels are unionized, and servers in those hotels are by default, are Union members. I think most servers would want to be paid minimum wage or above that, but certainly not below it.  As much as I hate the the Unions, it is their responsibility to get fair wages for their members, I belive this is the "reason d'etre" or main reason why Unions were created in the first place.  This is also why Unions have a legal right to taking a percentage of their member's paychecks.(and bbefore the employee even gets thier paycheck....but I digress)  Why, then, are there "tipping wages"?

    3) You're right, I don't understand minimum wage law.  I understand that the employer has to guarantee that the employer will be paid the minimum wage or above.  I understand that  in "tipping wage States" this is routinely ignored.  I understand that the restaurant owner has no say in how much a server gets in tips, I understand that the guest is not obliged legally or otherwise to tip.  And many don't.

    4)Standards and benchmarks have been used by most of the other trades and professions to base their salary scales on.  While the cooks have the ACF, this is by no means recognized by many employers or even culinary schools. What standards or benchmarks do servers have?

    5)  If you're ever in Vancouver, Canada, you come and visit me in my restaurant, and chat with me in my dining room.
     
  13. vic cardenas

    vic cardenas

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    Great discussion. I personally agree that we should do away with tips in the USA. But... I think it's too complicated an issue for it to be corrected in an intelligent manner. Brandon makes some very good points in the "for" discussion. I agree it would take government intervention on the federal level to accomplish anything. And I know they would bungle it sorely. Just imagine it now... every server gets paid $8-10/hour! There sure would be a lot more poor people in this country! There's no way in hell that everybody will end up making a "living wage" if there are any laws passed. And lets face it... if they do get paid more than my pessimistic estimate... is $12/hour really that much money? I know plenty of line cooks making $10-12/hour and not a single one owns their own home. 

    Excuse me, I'm going to get a bit personal here...

    I, personally, have been saved by tips. For the past 7 seasons, I've been working at a golf course cafe (with a few breaks). I line cook, cashier, dish wash, bus, serve, bar tend, banquet cook and I have a tip jar. I'm basically "The Chef" there... if I had an actual title. I get paid a decent wage, better than most line cooks and even sous chefs, plus I get tipped. Plus, if I have a banquet that day, I get a "banquet gratuity". In the end, I make pretty good money. As a result of the seasonal nature of the job, every winter I look for another job. I typically look for sous chef positions and try and gun for exec chef positions because I have the experience in managing smaller kitchens. There are NO exec chef jobs to be had here... ever. Usually, the sous chef jobs open are pretty awful. So, I usually just end up on the line again every winter. I've found that just about every winter employer I've had here has been willing to pay me $11-12 an hour to start. This is typically on the higher end of the scale here for line cooks as I have a ton of experience and I'd say, am overqualified. Sorry, but this wage is just not enough, that's why I always go back to the golf course. Sure, I'm confident I'd end up as the sous in a short period of time and get a raise. But it seems that sous' only make about $14-15/hour if they're lucky. This really isn't a whole lot of money either.  My wife, this year started working at wells fargo in their call center. She makes just over $14/hour and gets bonus' that are a few thousand dollars at a time for her performance. She doesn't really have any call center experience! Sorry, but I have to make more money than her. And I do. So, if I were to go back to a regular sous position. I'd make less money than her for sure. When I go back into all these line cook positions, I'm making far, far less than I need to be making! I own a house and I need to pay the mortgage! 

    My point is... A server here in utah makes $2.13 an hour! If they are good, and work for a popular, or busy restaurant, they should make about $15 an hour... at least. It seems the typical "veteran" FOH here can earn about $20/hour, if not a lot more on busy nights. This is what a good, skilled worker should be making! A good mechanic makes $20/hour (or more), why can't a good server who is busy? I'm certain the government and the general population won't have the same views as me. I'm guessing, they would deem a skilled restaurant worker should make about $10/hour!  That's a "living wage" for them. Even though it's far below average. Just ask any stinking rich person what they think a good wage is for a "restaurant person" is... They'll all tell you the same thing, $8-10 an hour. They think people can live fine off that! 

    I think as a whole, as a society working to get out of a recession that has lasted far too long; we should be working to make sure more people are getting paid more rather than the exact opposite.

    The weird thing was, when I owned my food truck, people would tip fat! Even though they knew I owned the food truck. The owner of my golf course cafe will work sometimes. And people know she is the owner. She doesn't make S#!& for tips! Why the double standard between a food truck owner and a golf course cafe owner?
     
    brandon odell likes this.
  14. brandon odell

    brandon odell

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    1. Being "part of the dining experience" doesn't mean you should earn part of the tip. Your Sysco delivery guy is also "part of the dining experience", as are the managers and every other employee or contractor that sets foot in the restaurant. They all get paid differently than servers do. They don't work directly with the customer, so they do not have the opportunity to build the relationship with that customer that most affects the tip. More importantly than any of that, the customer determines where the tip goes, and customers have the expectation that tips go to the people who provided them with service directly. More importantly than THAT, the Fair Labor Standards Act defines very specifically who is and isn't eligible to participate in a "valid tip pool", and the Act states that only service personnel can be included in a mandatory tip pool. It specifically forbids compelling service staff to split tips with cooks, dishwashers, managers, etc. Several recent lawsuits have reinforced that. Mario Batali's group just had to pay service-related employees more than $5M in back wages because they were taking part of server's tips to pay sommeliers, managers and cooks.

    2. Unions are more prevalent in hotels, but outside of tourist destinations, I still doubt it's "most hotels", at least in the US. Regardless, it's still a very small percentage of servers cross-industry, that are members of unions. If unions COULD compel servers to endorse wages over tips, believe they would. They can't though because servers don't want it. As far as the "tipping wage", there's no such thing technically. That's just a term that someone coined to use for this argument. There is a lower minimum wage that is mandatory to pay tipped employees, but it's just that, a minimum wage that is still just arbitrary because tipped employees must still make more than the regular minimum wage after tips are calculated in. Why is there a separate minimum wage at all? Follow the money. The federal government knows if there is no wage at all, they would likely not collect all they are due in payroll taxes from employees. (They still don't anyways because most servers don't report all their tips) The $3.25 minimum wage for tipped employees is usually just enough to pay their state and federal payroll taxes. Since the employer deducts the employee's share of payroll taxes from the employees check, based upon what they earn in wages plus tips, and pays those payroll taxes on their behalf, mandating that the employees are paid something in the form of a wage guarantees that the government gets their tax money from the employee.

    3. Restaurants paying less than minimum wage in states that allow a tip credit and have a lower minimum wage is certainly not "routine". I don't know where you got that, but it's completely wrong, it's illegal, and it is very easy for employees to report and act on restaurants that don't follow the law. Not only that, but the penalties are pretty stiff for those that get caught. Are there "some" that don't? Of course. I run across restaurant owners all the time that don't know the minimum wage requirements they are supposed to be operating their business by. They are a very small minority though, and most end up out of business and in trouble with the Federal Department of Labor, which then usually triggers an audit and more trouble with their state Department of Labor. Proponents of a "no tipping" policy are manufacturing a victim (the server) just to have an argument, inferring there are hordes of servers being paid less than minimum wage. You'll notice there is never any statistical evidence to back that up. It's true that there is no obligation to tip, but there is an obligation to pay the employee more than the same minimum wage that every employee in every other industry is subject to. There are some restaurants that occasionally do have to cover a shortfall in wages for servers because they didn't earn enough in tips. It happens mostly at low priced diners, at lunch, with older clientele. What usually ends up happening is that the restaurant owner ends up raising the base wage of the employee to make sure they make enough that the restaurant can keep employees. Unless they are stuck in a small town, good servers won't stay at a restaurant where they can't make more than minimum wage.

    4. "Standards and benchmarks" is just an arbitrary talking point. There are no official "standards" for any job, other than those that require licensing, outside of the standards set forth by the employer, or those negotiated with an employee bargaining unit. Nor should there be. It's no one else's right to say what a business should be paying their employee (outside the minimum wage) because no one else knows exactly what is required to do the job. It's no one else's right to say what an employee should know or what skill they should have other than the business owners because they are the ones who have to pay employees. Trade groups like the ACF can't tell employers what to pay. The only groups who have that opportunity are unions through collective bargaining, and there is a strong argument to be made that it does great harm to the overall quality of the service, product, and profitability of restaurants.

    5. If I'm ever Vancouver, I'll make it a point to visit your restaurant. I hope none of this comes of as "hostile" from me. It's not intended that way. It's just that I've had this discussion many times before, and the proponents of "no tipping" policies usually play very, very loose with the facts in order to have an argument, and are often completely unaware of what happens inside the restaurant anywhere outside of the kitchen. While I was managing food services, I despised the FOH/BOH rift that was so prevalent in most the operations I was charged with fixing. Wage jealousy and poorly designed incentive programs that pit cooks and servers against each other have sunk as many restaurants as bad food or service have. That's exactly what I see at the heart of this push for "no tipping" in the industry. That, and a veiled attempt by unions to work toward their agenda (big wages so they can have a big cut) without publicly acknowledging that they are doing something that can damage the very people they claim to represent.
     
  15. cheflayne

    cheflayne

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    The first sentence is conjecture. As to the second sentence and how tip pool sharing works in California 
    It doesn't say anything about forbidding sharing tips with cooks and dishwashers.

    A hypothetical scenario for friendly discussion:

    You go to restaurant with a bar for dinner. You never set foot in the bar however you do have a drink with your dinner. Would you expect some of the tip you leave to go to the bartender.

    Assuming the answer is yes.

    The waitperson has nothing to do with the preparation of the drink, it is strictly up to the bartender. The waitperson delivers the drink to the table. Now substitute the word food for the word drink and the word cook for the word bartender. Put in that light, why would anyone have an aversion to hourly BOH personal sharing in tips?
     
  16. brandon odell

    brandon odell

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    The first statement is certainly not conjecture. Its an established industry norm which has been referenced and upheld in several legal cases. It is the standard by which the courts decide on cases involving tip pooling. If the courts recognize the customer's expectation that tips go to the service staff, and the legislature that wrote the FLSA recognizes it as a fact enough to make it illegal for tips to go anywhere else without the consent of the server, then its well more than conjecture.

    On the California law, it doesn't matter whether it mentions cooks or not because the Federal law does. Both Federal and state labor laws apply, and when they contradict, whichever law most benefits the employee applies. I welcome you to call your state labor office and ask whether you can include cooks in a mandatory tip pool. Better yet, visit the DOL websites FAQ page concerning tipped employees. There is no ambiguity on this issue. There have been many lawsuits that have long settled it.
     
  17. brandon odell

    brandon odell

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    From the Federal DOL website FAQ page regarding tip pooling, a "valid tip pool" is defined as:

    "13). Tip Pool: The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), bussers, and service bartenders. A valid tip pool may not include employees who do not customarily and regularly received tips, such as dishwashers, cooks, chefs, and janitors."
     
  18. petemccracken

    petemccracken

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    OK, lets look at some typical numbers.

    First, the "givens":
    • Typical coffee shop/cafe, breakfast and lunch only, shift is 6 am to 3 pm, 1/2 hour meal break, two -15 minute "breaks, shift "paid time" = 8 hours
    • Typical ticket/cover: Breakfast = $6.00, Lunch = $8.00
    • Typical covers/server: Breakfast (6 am- 9 am) = 30 (10/hour average); Lunch (11 am - 2 pm) = 40 (10/hour average)
    • Target tip rate = 15%, actual tip rate average for calculation = 10%
    • Minimum wage = $8/hour, Server wage base = $2.50, 15% of sales may be credited to Minimum wage
    • Server gross sales: Breakfast = $6.00/cover x 30 covers = $180; Lunch = $8.00/cover x 40 covers = $320.00; Daily total gross sales/server = $500.00
    • Minimum wage/shift = $8.00 x 8 = $64.00; Server wage base = $2.50 x 8 = $20.00
    • Average tip credit towards Minimum wage = 15% of gross sales/server = 0.15 x $500.00 = $75.00
    • Average tips/server = Actual tip rate time gross sales/server = 0.10 x $500 = $50.00
    From the server's viewpoint, take-home pay per shift in a "tipping" establishment is:
    • Server wage base less payroll taxes and estimate income tax = $20.00 - $1.53 (SS&MC) = $18.47 PLUS
    • Average tips = $50.00
    • Total = $68.47 ( $68.47/8 hours = $8.56/hour TAKE-HOME)
    Compared to the server's take-home pay in a non-tipping establishment (minimum wage):
    • 8 hours x $8.00/hour = $64.00 LESS
    • $4.89 for SS&MC LESS
    • $9.60 income tax withholding EQUALS
    • Total = $49.51 ($49.51/8 hours = $6.19/hour TAKE-HOME)
    Thus a server in a tipping establishment takes home $18.96/day ($2.37 per shift hour) MORE than a server in a non-tipping establishment earning Minimum wage. "In the pocket incentive" goes to the tipping establishment. Not calculated is the server's requirement to report and pay income tax on tips. And, of course, any sharing of the service fee/gratuity charged by the non-tipping establishment.

    The employer saves $3.36 in matching SS & MC under the tipping establishment as long as there is no service fee/gratuity attached to the ticket. If the service fee/gratuity is taken into account, the employer is better off in the non-tipping establishment to the tune of $45.11, less any sharing of the gratuity with FOH, BOH, or both.

    Pretty clear who profits from each scenario.
     
  19. brandon odell

    brandon odell

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    Excerpts off the California Restaurant Association website about opinion letters written by the California Labor Board:

    "In an opinion letter issued in 1998, the Department of Labor Standards Enforcement (DLSE) stated that those employees who provide “direct table service” may include waiters and waitresses, bussers, bartenders, hosts and hostesses, and the maître d’. Employees who do not provide direct table service, such as dishwashers and back-room chefs, cannot be included in the tip pooling arrangement. Issuing a second opinion letter in 2005 regarding tip pools, the DLSE opined that tip pool participants may include anyone who contributes to the “chain of service bargained for by the patron, pursuant to industry custom.” This opinion letter described the “chain of service” to include bussers, bartenders, hostesses, wine stewards and front-room chefs (e.g., chefs at a sushi bar or who prepare food at the patron’s table). However, no employer or agent with the authority to hire or discharge any employee or supervise, direct, or control the acts of employees may collect, take, or receive any part of the gratuities intended for the employees as their own. In other words, notwithstanding the collective tip box for employees on a team as in Starbucks (explained below), tip pooling cannot be used to compensate the owner(s), manager(s), or supervisor(s) of the business, even if these individuals should provide direct table service to a patron. Employers and their agents cannot participate in any tip pooling arrangement. Labor Code section 351 provides in pertinent part: “No employer or agent shall collect, take or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron . . . Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given or left for."
     
  20. cheflayne

    cheflayne

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    "Most benefits the employee" comes down to point of view. If it benefits the FOH employees doesn't necessarily mean that it benefits the BOH. Could be that the complete opposite occurs. It would appear to me that if I were an hourly BOH employee and not allowed to share in tips I would certainly would feel that I didn't benefit from your point of view. So which employee's benefit trumps the other? Why the aversion to sharing tips with BOH?

    Any thoughts or opinions on the hypothetical scenario from my previous post?