UnderCover Waitress: Understanding Tip Pools, Tip Credits, and Tip Outs

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Thursday, January 19, 2012

Understanding Tip Pools, Tip Credits, and Tip Outs

Discussing tips gets rather confusing. Someone unfamiliar with the nuances in the restaurant industry may assume that the waitress simply pockets the tips left for her. But nothing could be further from the truth.

Tip Credit 

First, let's clarify some restaurant language. A tip credit is not a tip. Most states in the union set a lower minimum wage for tipped employees. For example, the minimum wage for most employees may be $7, but for waitresses it is only $4. That means her tip credit is $3, the difference between $7 and $4.

Let's say the restaurant is slow. A waitress arrives for work, and two hours later is sent home. She took one table and earned a $5 tip. Her tip credit is $3 per hour and she worked 2 hours; $3 x 2 = $6. She only made $5 in tips; therefore, the restaurant owes her $1. It is illegal to let a waitress go home with less than the regular minimum wage. Most waitresses don't know this.

Tip Pool

Tip pooling used to refer to everybody putting their tips in one big pot, then dividing them up at the end of the shift.

The federal government now uses the language "valid tip pooling arrangement" when setting laws regarding who may receive tips.

Tip Out

Tip outs are not tip pools; however, laws regarding tip outs are often included in the umbrella category, "Tip Pools." Most restaurants that do not utilize tip pools require waitresses to pay a "tip out" to certain employees, usually bartenders or bussers.

All of this begs the question: "Why do restaurants utilize tip pools or require tip outs?"

* Waitresses are at the bottom of the restaurant hierarchy, and yet they are seen as a source of income for the restaurant. In other words, the workers with the least power are made responsible for providing income for poorly paid restaurant employees. This serves to save the owner money.

Labor laws have cramped the restaurant owner's and manager's styles by limiting who may pocket waitress tips. Only employees who interact with and serve customers in the front of the house may  "participate in the tip pool" = get tip outs from the waitress. A good example of this is the waitress being required to pay the bartender ten percent of her tips.

* Getting "in on" the tips is seen as incentive for other workers. A busser making a flat, hourly wage will not work as hard. To make tips, the waitress must "turn her tables." That means she must get them bussed, cleaned, and reset so she can serve a new group of people and make another tip. If the busser knows he is getting some of that tip, he will move a lot faster to get that table turned.

* In some ways, tip pooling is a heavier-handed way of requiring tip outs. Staff that are sharing the take are, theoretically, more likely to work together as a team. This teamwork may result in better service. Anybody who has ever been told, "I'm sorry, I'm not your server" understands this concept.

One of the most frustrating things is when a table views being catered to by more than just one person as a reason to tip less. Their logic is that their waitress did less work, so she shouldn't be paid so much. This logic is grossly flawed.

If you don't tip me because a food runner served you, then I have no money with which to tip out the food runner. If I am required to tip him out based upon my sales, not my actual tips, then I am paying to work.

The irony here is that the restaurant is more likely to enforce the tip out rule than the tip credit rule. For example, here is a "worse case scenario:"

If I serve a table that spends $50, I should receive a $10 tip (twenty percent.) Ten percent of that tip, or $1, is owed to my helper. But, because I have help, the customer only tips me $5. He doesn't think I should get twenty percent because somebody else was serving him, as well.

I still owe the helper $1, not 50 cents. If I don't pay up, the helper complains and I get in trouble for insubordination and breaking the rules. I could lose my job.

If I ask for a tip credit so I am at least making minimum wage, I am accused of doing a poor job. The logic is that the customer would have tipped if I were a good waitress. This is a veiled threat; I could lose my job.

So, as a waitress, I am the least powerful and am required to ensure that everybody else gets paid. If I don't play bank, I could be fired.

Next time you are in a restaurant and more than one person makes sure your desires are being met, please recognize that you received good service and tip the team twenty percent. Thank you.




72 comments :

  1. I have never understood the whole tipping the server less bc someone else helped them logic. If someone is helping me keep your drink full, running your food, etc., it is bc I am BUSY with other tables, and asked for help to make sure EVERYONE gets good service!! But if you like, you can wait the extra 5 minutes for me to get caught up, so I can personally drop off your now cold food, and "earn my money" ( eye roll )

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  2. Exactly! On slow nights, we don't have all the extra help because we don't need it and don't want to tip out on a slow night. (At least that's what we do.) On a busy night, we have help for the customer's benefit.

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  3. Thank you for this! I wish more people understood where exactly your tip money goes.

    I wanted to add a note about tip-outs. I have worked in kitchens (back of house) for years, and we got so tired of hearing the servers complain about having to tip out to the kitchen....despite the fact that most people are tipping both for good service AND for good food! At my most recent restaurant (a 5 star, very highly regarded restaurant nonetheless!) I was paid only slightly above minimum wage, and my tip out was usually about $80 every 2 weeks. Most servers were working just for the summer to make some money before going back to school, yet the cooks were actually career cooks. The money was nothing compared to what the waiters make, but I was thankful nonetheless. Could you image how paltry our back of house pay would be without a tip out?

    (It's bad enough though that I can't afford TO cook anymore. The restaurant industry is pretty sad, that the cook, skilled cooks have to move on to other lines of work where the wages can at least support us). I appreciate why the servers work the way they do, and they do work hard. But often, the premise goes that the tips are strictly for them, and not to support all the others behind the scene that are also paid crap and working for peanuts....without access to earning tips.

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    1. Tip out the back of the house? Are you crazy? What contact did you have with the guest? None! Did you contribute to helping clean up the spilled water glass on table 12? No, you were playing grab ass in the walk-in and smoking cigs outback. The law is plain and simple on this. If you do not have guest contact or work a job (cook) that does not regular and customarily receive tips, you don't belong in the tip pool. I waited tables for 25 years before going to law school. Now I'm a waiter with a law degree and way too busy law practice. http://www.kuvinlaw.com

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    2. Oh ok, yeah that is crazy to tip the people who actually MAKE the food. Because people come to restaurants to see your fake smile, not to eat delicious things. What contact do cooks have with the guests? They create, touch, and plate the things that go into the guests mouths....you just carried it over and filled some glasses. Anyone who believes that it is fair that servers usually make $10-20/hr more than cooks who are working their asses, getting burned, cut, cussed out, and working long hours to make artfully presented and delicious meals is probably a server.

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    3. Actually, it is illegal for the kitchen to received tips. If you don't want to pay for both food AND service, don't eat out. Order take-out.

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    4. Yes it is illegal to tip out the BoH. Don't be upset with the servers, be upset with your management/owners who are breaking the law. Cooks should be making a good wage, especially in a 5 star restaurant. It is illegal to force tipped employees to pool with anyone making more than minimum wage - this includes bussers or hosts making minimum wage.

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    5. Hogfather, where are you getting your information that is it illegal to tip allow FOH employees making minimum wage to participate in tip pools? I believe you are mistaken and would like to read your source. Thanks.

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    6. My cooks get paid a little over 10 dollars an hour. I work in a very small restaurant where we pool our tips between the 2 waitresses on duty. On a good day a really good day I'll go home with 50 dollars. But no matter what i make i have to tip the cooks 15 percent. How is that fair?

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    7. The FLSA has specific guidelines around who may or may not participate in a valid tip pool. The following occupations have been determined as eligible for tip pooling: wait staff, bellhops, counter personnel who serve customers, busboy/girls - server helpers, service bartenders. The following occupations have been determined as ineligible for tip pooling: janitors, dishwashers, chef or cooks, managers, laundry room attendants.
      Federal Law~

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    8. re: "no matter what I make I have to tip the cooks 15 percent. How is that fair?" It is not fair; it is also illegal. Contact the Department of Labor.

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    9. Our kitchen is soppose to receive 1% of sales but we never see it, we also are soppose to get 20% of service charge from banquets divided between 5 cooks. Serves and bar each get 20%. Their explanation is the extra 4 hours we spent prepping is like our tip. Its not fair but at the same time I don't want their tip I'm aware that most servers are not very good ( they don't upsell, they don't know the menu, they are texting all the time). A adaquete wage would be nice but the hike in menu prices would differ customers and maybe be the reason why our restaurant would close. We do a dollar increase and instantly I hear complaints on yelp. Really if the rest of the staff worked as hard as we do it would boost moral. The cash is not the issue its the work ethic. A GOOD hard working cook makes the same as BAD lazy server. When your a good server kicking the kitchen down a few bucks is no big deal.

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  4. I'm gonna have to agree with Under Cover here. I have worked in both the front and back of house for a number of years. While it seems to many BOH employees that servers are whiny and always complaining about poor tips, which is true and I have been guilty of it as well, it is the difference in how the money goes out.

    When I would be serving, my hourly rate was $2.63 an hour, and I had to claim my tips at the end of shifts as income (we were required to claim the total amount before tip-out). I can remember a few times when I worked 50-60 hour weeks and my paycheck from the company was less than $30 after taxes. For the sake of example, if a cook in the back worked 55 hours and was paid $8/hour (a pretty standard amount for beginning cooks, however, most get raises every 3-6months after performance reviews) they would make $500 before taxes so anywhere between $460 and $480 or so (if it is only taxes taken out) for the week, or just shy of 2K a month. I'm not saying that this is a huge sum of money, but its guaranteed income. I've worked an 11 hour shift straight through before and walked out of the restaurant with $53. It happens sometimes, but not always, we have good shifts and bad shifts, and at the end of the day, we just hope that the good shifts outnumber the bad, for our pocketbooks sake

    Now the cook made this much cash regardless of how busy the restaurant was, or the quality of the food that was put out. They can burn the food, take too long preparing the dish, or any number of other things that can cause the guest to be unhappy. Even though this has nothing to do with the quality of service the guest receives (which is what the tip is supposed to be for, not the food), the server is punished by a smaller tip, that they still have to give a portion of to their bussers/bartenders/hosts.

    As mentioned in the previous paragraph, the cook makes that much regardless of how busy the restaurant is. As a server, I only make money when a number of circumstances all line up, one: there are guests in the restaurant, two: they understand how to tip for service, three: their food is correct, four: I provide them with good service. Now of those four criteria, I only have a say in the last one, and a portion of the third. but my paycheck only happens when all four line up. Yes, you do hear a good deal about servers making really good money at the end of a shift, but stop to think for a second. We don't brag when we have a bad night and don't make much money. You could have a terrible night, burning all kinds of food, taking way too long to get it ready, whatever, but you still make the same amount of money, good days and bad days.

    Now, like I mentioned at the beginning, I have worked in the BOH a good deal of the time too, (actually where I started out) and there are times when I miss the steady paycheck. Yes, it is hard work standing on a line where it can be 100-120F for extended periods of time, but when I made a mistake, it didn't cost me my paycheck.

    Having seen both sides of the coin, I have to agree with Under Cover, and don't think servers should ever have to pay out cooks

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    1. Thank you so much for saying it so well. The grass stops always being greener on the other side of the fence when you've worked both BOH and FOH.

      I am compelled to respond to your statement that you had to claim tips before tip out. Was tip out required? You paid tax on somebody else's income. That is completely nuts; I am sorry that happened to you (if I have understood you correctly.) I wonder if that is illegal -- it should be.

      Also, it is quite true that servers have this reputation for bragging about and making big money. Not every restaurant, of course, and as you so eloquently pointed out, not every shift. If we could simply keep out tips, then the good shifts would even out the bad and waitress income would be better over the course of the year.

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    2. You are only speaking from the servers point of view on a slow night. What about that busy night when we still only make that finite amount we worked hard, stayed late, banged out more plates then we have plates and still walk out with the same $80 -8hour shift. My restaurant when we book a corporate event and we are running and prepping like crazy we still only make our wage. Not everyday is easy actually no day is easy in boh.

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    3. And I was a server too..pretty cushy compared to running a kitchen. Lots more down time.


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  5. I have been in the industry for years. You make some valid points. However you don't only tip 10% out to other staff member, you tip multiple people. On average depending on the place you tip 35-65% of your tips. Sometimes this is done according to sales. Other times it is based off tips. I will base this scenario off tips. Typically A bartender you tip 10% to, a busser 20%, a host 10%, a food runner 10%, sometimes you tip cooks 10% as well. That is 50 percent of my tips gone right there. So if I make a $100 dollars I am walking with $50. Now comes something else. Most places now make you claim a 100 percent of your credit card tips. Almost everyone pays with credit card. In fact most places will claim all your credit card tips automatically. A lot of places will not let you deduct your tip outs from your claimed credit card tips. So on top of giving half your tips out, you pay taxes on 100 percent of the tips. So you are paying other peoples taxes as well. Trust me I have had this problem at multiple places. The servers have a lot of people to tip. Not just one. On top of that like you mentioned a lot of states pay 2-4 dollars per hour. So you make almost nothing hourly. Which means you end up owing the IRS every year, not fun. A lot of corporate diners will pay for liquor and wine seperateley as well. And not tip near as good as the food. I have seen a big 10% average when this is done, sometimes 5%. Sometimes nothing. This is not always the case. It does happen though. It is as if they feel you did not work as hard as to bring them their wine and spirits.

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  6. Us waitresses have to claim our tips and we have to tip out 10% of what we make that day to other employees that are not waitresses.That money builds up for two weeks then they all split it cash money and they dont claim it whats up with that?

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  7. A few things here,
    -as far as the whole "tip credit" most states require that your hourly wage plus tips even out to at least minimum wage in any given week, not a given shift. Which is why that slow Monday night that you make 5 bucks, during a few hours of work is okay, because during busy times your making enough to even it out.


    - now for tipping out, yea a lot of servers do end up making more than the BOH employees that cook the food they serve, but cooks always know how much they're making and its consistent. A servers take home pay fluctuates greatly. It takes a certain type of personality to be a good server, one has to be personable and good at reading and interacting with people, yes, food plays a part in tipping sometimes but the way I see it, how a server treats a customer, and the service they provide plays the biggest part in how most customers tip. If you don't have to interact with the customer or play any role on the floor, there is no reason to tip you out. And as a server, it is not my issue if you agreed to work in a kitchen for what you consider shitty pay.

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    1. Restaurants are supposed to make waitresses who do not earn enough to make minimum wage "whole," meaning they must pay the server enough that she goes home with minimum wage. However, it is uncommon that owners do this. And many servers are afraid to call attention to the fact that they had a bad night; they are afraid of being blamed for doing a poor job.

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    2. unfortunately, the minimum wage tip credit is only applied for one work week, not daily. The employer has to make sure that for one week's work, you make at least minimum wage. That means on a slow Monday lunch, you can work 3 hours and leave with $8. It happens.

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  8. Here's a scenerio... If a server quits and still owes the service staff "tip out".. can the service staff employee file a suit in small claims court for money a server owes them

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    1. You could file a claim, but whether or not it is truly worth it is subject for much discussion. Issues include amount of money owed, cost of filing, ability to get the money awarded, and time spent on the whole thing.

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  9. We recently changed our tip pool policy where I work, and it doesn't seem fair/legal. The servers are now evenly pooling tips with the bartenders, but the bartenders make nearly twice as much per hour. This is pretty tough to swallow. It's not so much a pool anymore, more like a waterfall into the bartenders pocket. I've done a little research but haven't come across anything that fits this situation. Thoughts?

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    1. Delayed reaction here... I think it sucks! It is worthy of a blog post to discuss the various angles, but at first blush I wonder if wait staff complained about bartenders earning their own tips, better wages, and getting a tip out... now the wait staff are being punished, sort of, by a manager who doesn't like them...?

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    2. I work as a waitress and our bartender/manager has made it mandatory to tip out 10$ to him after every shift. It doesn't go to the hostess, or the bussers/dishwashers. It goes right into their pocket. So if we have 6 girls on the floor they get $60 plus whatever they make in tips. I feel like it's illegal! We can have a bad night and only make 30 and we are still required to give them 10', I can't afford to tip out all the people who ACTUALLY helped me throughout the night!

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    3. dinergirl: what state are you in? It matters.

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    4. Where I work the servers and bussers/foodrunners make the same base minimum wage, but (obviously) the servers get tipped more (bussers 8% and food runners 13%). It sucks because servers have less responsibility and us bussers/foodrunners are doing all the work -.-

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  10. I was just asked to start spliting my tips with house, I was told that half of my tips had to be given back to the house, is this legal?

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  11. In the states it is illegal for servers to be required to share tips with the back of the house.

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    1. I am the owner of a cafe that is having a hard time staying in business. Because i serve really good food and i often go out and say Hi to the customers, the tips are HUGE to my 19 yr. server who had never served food before. I see her making big money on tips besides her $8/hr. I keep track of the money so we can balance at the end of the day and i see that she is making up to $17/hr. Obviously, i am jealous and i feel like i should share the tips with her. This is in California. Does the law allow me to share the tips with her? I would love to. She turns out to make big money and i am even wondering if i should close the cafe since it is a town of 1000 people only. I think that because i have really good food - Gyros - and i am a personality to go out and talk to people, SHE is making all the tips that i am helping her get. Here is one example today:$77.48 and they left her a tip of $25! I am the one who talked to them and entertained them and connected with them. All she did was give them the food.If it is illegal for me to get part of the tips, then that really sucks:(

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    2. Call it what it is. You would like to steal from your staff because your business is failing. Get out now, you are in over your head.

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    3. Hire a cook pay him a wage you can handle and serve the tables your self. I'm telling you its easier to train a cook then a sever. You can regulate his hours and you know exactly what he deserves, if you pay more the minimum wage they will be excited and passionate.

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  12. Which states is it illegal to tip out the BOH?

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    1. All of them. It is against federal law, and considered wage theft. This, however, does not stop many chefs and restaurant owners from requiring it.

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  13. I start working in a restaurant as server... they make us stay after people leave to clean the restaurant, or in the morning to come early and clean if the night shift was crazy enough and they didnt have time to clean we servers have to do it at minimum wage... also they are making us pay 2 percent to the kitchen of the TOTAL sales, for example if in two weeks I sale 10,000 I have to pay 200 hundred to the kitchen, time that to 15 servers... ??? and that in florida is illegal... I told the manager and he said they are doing it anyways whether I like it or not.. also we get paid every two weeks and they wont let us take our tips home... the tip in the credit card its included in the two week pay soooo illegal... what can we do?

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    1. Complain to the Department of Labor in Florida, here is a link to local offices:
      http://www.dol.gov/whd/america2.htm#Florida

      Your employer is guilty of wage theft. You may want to consult with a lawyer, and have all of the wait staff sue together.

      Good luck.

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    2. Yes very illegal, but what's wrong with cleaning? The kitchen has an insane amount of cleaning to do (hopefully) the hoods, fryer, grill, stove, walkin weekly. Probably floors, walls, dishpit daily.

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  14. The restaurant I wait tables in is changing policy on paying out credit card tip's from the next day to only getting them on our paycheck, a bummer for sure but that's life. Now they are also going to start automatically taking out the tip's we usually hand pay to the busers, bartender etc... Let me first state that I am in no way trying to not tip out on what I make but I am concerned that I have no control over how much they are going to take out of my tip's to tip out. I'm wondering if this is legal

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    1. Awesome question; I just answered it in a new blog post, "Restaurant Policy Changes."

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  15. I manage a restaurant. where I am both boh and foh on a daily basis. servers do deserve a lot of the tip. but definitely not all of it. for example if I go out and eat I always tip twenty percent or more. but that tip is not just for the waitress. she had a very important part of my experience there but was not the only one to make it happen.

    someone had to buy the food, prep the food, make the food., seat people, answerphones, bus tables, setup tables, keep in charge of the reservation desk, seat guests, etc... most importantly its every member on that staff to provide excellent service, positive and supportive work environment, and fresh hot hot food.

    its a team effort and no one position or person could keep a restaurant running with out the help of the other members such as a host, busser, cook, dishwasher.

    in the end I believe you tip a fair percentage twenty percent to your staff up front and a solid fifteen percent to the kitchen to divide up evenly. there for you keep 65% for your self and that thirty five percent you tipped out, look at it as an investment that your teammates will show you more respect and will be willing to give an extra hand when you may need it. Don't be greedy be fair.

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    1. Hi Greg,

      Respectfully, the fact that you do not think it's fair that the BOH does not get tips is not relevant. It is against federal law for you, as a manager, to require or suggest that tipped employees share with the BOH.

      If you do so, you are breaking the law and your employees should report you to the Department of Labor.

      If "teammates" are unwilling to give each other a hand when needed, that is not much of a team. It is the kitchen's job to get the food out quickly and correctly; there is no justification for doing a poor job because your "teammate" does not bribe you.

      What you think is fair and what the law states are different. Instead of trying to require that food servers be responsible for compensating other employees, why don't you look at the pay structure in your restaurant? I would say the same thing to owners and those who control the pay of employees: Don't be greedy, be fair.

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    2. Hoping u can answers my question? Ive been working for a restaurant in Hawaii, as a bartender and waiter,for six years.. Earlier today I was tending bar,so I am responsible for the servers money drops n paid in. And alway check my server sales,and credit card tip.. And I notice that this service under tip me my percentage...so I called them out on it...so we jus got a new manager ,and over herd what I said.. And replied that tip out is not a mandatory percentage,And that it was a suggestive tip out ..that a business they cant make us tip out percentage ..wtf.. .. i feel as waiter or bartender,the money we make is just as much as my busser,.runners,hostess .money.. I didnt understand, and still dont understand..is it really law

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    3. Hi Greg-

      The Fair Labor Standards Act specifically states that the "tip" is the property of the employee, not the employer. Your scenario seems more like a way for owners to save money on other people's wages by taking it from servers than a way to foster teamwork. BTW, the FLSA specifically precludes tip sharing with non-guest service employees (i.e., back of house).

      In the interest of "being fair, not greedy," however, let's illustrate your suggestion that servers share 35% of their tips:

      Let's say we have a restaurant that on a given night has:

      10 servers making $2.13 in hour
      2 bussers making $6.00 an hour
      2 hosts making $8.00 an hour
      1 bartender making $4.50 an hour
      4 cooks making $8.50 an hour and
      2 dishwashers making $8.00 an hour

      Let's say everyone but the hosts works a seven hour shift. The hosts each work five hours.

      If each server earns $100 in tips and gives 20% to the FOH and 15% to the BOH, they will earn $79.91 that night ($65 in tips plus wages of $14.91), or $11.42/hr

      The FOH tipshare would be $200 (10 servers, $20 each). If we give 50% to the two bussers, they would each earn $92.00 ($42.00 in wages and $50 in tips), or $13.14/hr

      If we give 20% of the tipshare to the two hosts ($20 each), they would earn $60, or $12.00/hr

      Say the bartender gets 30% of the tipshare ($60) and earns $50 in their own tips. The bartender would earn $141.50, or $20.21/hr

      If the BOH tipshare is split six ways, each cook and dishwasher would earn $25 in tips in addition to their hourly rate. This means that your cooks would make $12.07/hr and your dishwashers would make $11.57/hr.

      Want to see that again?
      Bartender - $20.21/hr
      Busser - $14.39/hr
      Host - 12.00/hr
      Cook - $12.07/hr
      Dishwasher - $11.57/hr
      Server - $11.42/hr

      I agree with Under Cover. Why should the lowest-paid employees in the restaurant support the wages of other, higher-paid employees? It is the employer's responsibility!

      Be Fair. Not greedy.

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    4. Well said! Thank you for taking the time to write this reply.

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    5. This site has been so helpful! I am currently analyzing the new IRS tax code (to become effective in January 2014) as it relates to automatic gratuities / tips and the impact on our servers. It is clear that we need new Division of Labor Standards Enforcement (DLSE) legislation to make tip-outs from individual employee paychecks illegal. I agree that it is the responsibility of the employer to absorb this cost, not a server's obligation. I just became aware of the inequities this Friday (9-26-13). I am confident that we can change things for the better so that our servers are not paying taxes on involuntary deductions such as as tip outs. Oh my goodness. How has this been allowed to go on for so long? I will copy you on any correspondence I complete within the upcoming months. Great work Under Cover!

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    6. Thank you, and please do keep me in the loop. I look forward to reading your research and analyses. :)

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    7. In my restaurant the bartenders are the laziest. Bar manger took 2 days off this week kitchen manager hasn't had a day off since March..(not counting Sundays, we are closed). Bar doesn't mop sweep scrub and thus we have fruitflies (bar manager is also bartender). Kitchen manager will sweep out the bar to prove a point about how filthy the bar is but always ends up cleaning it up cause the bartenders seem stunned about what action to do next since they never clean..but they get away with it cause they are the only ones who deal with all the drunks no one else wants to deal with. Is that a fair trade..prob not but I'd rather be in the kitchen cleaning then forcing small talk with a lush.

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  16. we don't require any such rules. I am very aware of the laws and regulations. what I was saying in a fair world that would be the curdious thing to do. I do agree with you that what you make in tips is yours.

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    1. "courteous." ;-)

      I respectfully disagree. I think employers should pay employees, not require some employees to pay others.

      the expectation that waitresses bribe other employees to do their jobs is intrinsically flawed.

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    2. There is absolutely no rationale for regarging a tip as something that doesn't belong to one person and one person alone. If customers want several workers to have a tip, they have every right and ability to tip each individually.

      The confussion over tip pooling has actually resulted in some people believing that tip pooling is a way for someone who hasn't directly received tips to share or spend the customer's tip for them. Business owners who implement tip pooling are sharing and thus spending their customer's tips without any kind of authorization from those customers.

      Think about it. Isn't tip pooling the spending of the tips customers have presented. I can understand how tip pooling would make sense when say a waitress voluntarily shares part of her tips with other workers. This tip pooling would make sense because the customers who tipped her obviously wouldn't mind her sharing her tips with other workers. But it makes no sense what-so-ever for business owners to be setting up and implementing a tip pool. Customers aren't giving their tips to business owners so that the business owner can share and thus spend their tips.

      There should be no formula for how a tip pool should be divided up. It should be solely up to the person whom the customer chose to tip. Only that person, and that person alone, has been authorized to spend or share the customer's tip.

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  17. i live in florida. what amount do you go by regarding credit card tios. the total or whats in the tip line?

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    1. The tip line has your tip. The total is the total of the cost of meal plus your tip.

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  18. Can anyone supply a link or reference on tip laws {maine}? Can we just get to the bottom of this? Our establishment is going through a crisis where it is mandatory to pool tips. The owner collects all tips from every shift. Once a week we get a 'gratuity check'. Off the top, every shift she works, the hostess who also gets paid min wage (or more, no one really knows for sure), collects 15% of the servers tips. The back runner gets 10%. The remainder is split evenly between the servers and bartender. The house takes $3 from ea employee to cover shift drinks, meals etc per week. Our servers want change. Most shifts the hostess takes home more than the servers when including her hourly wage. The servers would like to have control over the tips. In order to make change, the servers need to have a plan that the owner can not deny. Your thoughts are appreciated.

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  19. Where I serve, we all tip pool 2% of our sales its automaticly figured in our sales cash out(cash/credit/credit tip/2%sales tax) sales tax/tip pool is what its demed. Anyway. Sometimes it eaquals 40% of our tips. For not every guest leaves 20% some doneven tip at all. Astonishing but it happens. Now. Listen the hosts get a percent to equal min. wage then the bartenders get 1.5% of tip pool left. Then astablishment collects what's left. So even if a 100$ table leaves me nothing I pay 1$ everyone including astablishment gets paid, but not me. Is this evan legal? Managment literaly told us if we don't sign agreeing we cannot continue our job so everyone caved and singed it. Only to regret it ... Can we fix this? I live in michigan if it makes a difference.

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    1. Its a at will employment they can't force you to sign but they don't have to hire you

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  20. Hi guys, I work for a small cafe in PA. Ive been having some issues as far as understanding my paystub and my adjusted cash tips (offset)? Reason being, if I get an hourly rate of say 8.50 and share tips every 2 weeks (including back of house...) is this legal? Secondly, the percentage of what I get tipped every 2 weeks is based off of how many hours I worked total, so essentially if I work less hours than the dishwasher in those 2 weeks could he be making more money than myself-both hourly and by tips!?!! Another question, my reported cash tips for a recent week said 80 but I never received the 80 not even one cent! I also don't know if the cafe is giving us all of our tips, I don't think ive ever received any credit card tips? Wouldnt the credit card tips still be recorded on my paystub with cash tips as well??? I would like answers from anyone who would know, so I can determine how I shall procede and if legal action needs to be taken! Thank you all for your help and advice in advance!!!!

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    1. Are you not receiving your credit card tips at the end of your shift..when you do an electronic checkout it will calculate how much you sold and you credit tips will be the difference in what you owe.(u sold $20 in cash sales $20 in credit and received $5 tip on both. You owe the restaurant $15 cause you keep the credit tip from the cash you have in your hand so you walk with $10 cash). Now your tips on your check is considered income( and you already received it at the end of each shift), you must be taxed on all income so they take the tax from the check (because they can't take the cash from your pocket). If you didn't claim it you could be audited. I've received checks for $8 for 90hrs but I took home lots of cash.make sense?

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  21. Here's a question, if the food runners are not paid hourly am I legally required to tip them out? They're wage is coming straight from the servers pocket. How does that figure when I do my taxes? I paid $650 to state last year, so I was wondering if that was somehow revelant?

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    1. Food runners should be paid their hourly wage, are they not? That is illegal. You employer may require you yo tip them out and its in your best interest to tip them if you want your food run.

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  22. I work as a cook in a small town,small restaurant... The tipping changed from everyone getting. a fare share to 15% share? Waitresses get all their own tips left on the table and they give cooks( myself and two others) 15% of their total tips of a6 hour shift. Is this legal ? Yesterday one of the waiters got $44 and 15% of that was $6.50.. We had to share that $6.50 in 3 people? Tell me that's legal!?:/

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    1. It is illegal but not for the reason you think. It is against federal law to force servers to share tips with the kitchen. Period. "Valid tip pools" are for the front of hours employees ONLY. No owners, and in many states, no managers may dip their hands into the tips. Back of house should never received tips. If you think this is unfair because you want more money, the appropriate thing to do is to ask your employer to pay you what you are worth. Your employer is breaking the law, and I hope the servers in your restaurant contact the department of labor in your state and file a wage theft claim.

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  23. I work in a Florida restaurant where we have to tip out at the end of the night to the Manager 3 %. I am a server and have no problem tipping out but I am told the 3 % goes towards paying for the cover band as the bartenders, busboys and food runners make more than min wage. Is this legal? or is the Manager stealing? One server was told the tip out goes to the food runners, etc. Sounds shifty to me. Any thoughts?? We do not turn over tables due to the fact we are a dinner show.

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    1. 1) I greatly doubt that the cover band is serving your tables. Therefore, they have no business receiving your tips via your tip out. This is wage theft. If customers wish to offer the band a tip, that is the customer's prerogative, but your boss is stealing from you to pay the band.
      2) Managers giving different food servers different answers to the question, "where does the tip out money go?" is extremely shift.

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  24. The company I am with requires a 3% tip-out of daily sales. 1% to bar, 1% to busser, 1% to host. During our busy season, not a problem for me, as every one gets their money. We are in off season now, so we only have a bartender. The bartender is only receiving 1% of this 3% tip-out. Question: Where is my other 2% going? Management says I shouldn't worry about that other 2% because I'll get it back with my taxes at the end of the year---I don't think the IRS has a "cash owed back" for tip-out box!!!
    This seems very shifty to me, I think I should see this money back on my bi-weekly pay-stub somewhere. I think the tip-out should automatically be 1% for the bar and I keep the rest of my money.
    Do you think my company is going to compensate this money or should I pursue this further legally?

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    1. Oy. Nothing surprises me anymore...
      1 -- you earn tips.
      2 -- they take out 3% and tell you it goes to other FOH staff. so far, so good.
      3 -- they take out 3% and tell you where 1% is going. WTF?

      Personally, I take great offense to any question asked being answered with "you don't need to worry about that." I tell people what I worry about, not the other way around.

      Legally, however, they had better be able to show what they are doing with 2% of your money. If they don't, they are open to tax audits that will hurt, and may be found guilty of wage theft.

      Yes, I think you need to pursue this via the department of labor. If you confront the managers directly, you may lose your job. If you contact the department of labor in your state, and they retaliate, you may sue them for retaliation.

      Best of luck.

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    2. What state are you in

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  25. My wife and I own a small restaurant. We work front of the house (take orders, deliver food, buss tables) three days a week and she shares front of the house duties with another two days a week and I share one other day a week. What to do with tips? Our FOH employees make $9 min (not my wife and I). We have a BOH staff that also delivers food to tables when we are busy....we are a simple cafe. Place your order at the counter and someone brings you your food...we currently have a tip jar for cash which we have been giving to all employees (not my wife or me) based on hours worked per week.
    We are just now starting to take tips on creditcards and are looking for the legal solution...

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  26. I work in a restaurant in Calif, and we are required to tip out at the end of the night. We have to tip the busser 20%, the hostess 10%, the bartender 10% and the dishwasher 10%. I'm sorry but that is 50% of my total earnings and I'm being taxed on 100% of my earnings. I don't think that's fair especially if you have a very slow night. Is that legal?

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  27. I work as a bartender in California. A fellow "bartender" is a part time manager. Can she pick and choose when she is a bartender and when she is a manager?

    Also, would waitresses tip her out if she is the only bartender on shift? Isn't that technically considered tipping a manager? She gets a higher wage and also makes the schedule

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    1. Are you sharing/pooling your money with her during a shift that you are both working as Bartenders? and does she have any Management authority while clocked in as a Bartender (for example voids/comps)

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  28. Since when do people go to restaurants to tip servers? If you got paid as much as the cooks in the restaurant, then you wouldn't do it :-)...
    Last time I checked restaurants were created for customers not servers. The only way to fix this is to pay the cooks and servers the same wages per hr. From there on each check delivered to the guest will be two extra lines beneath the tipping percentage. One line will derive from a percentage of the whole tip for the server. And the other for the cooks and dishwashers. This will put the power back in the hands of the people. Its about the experience as a whole. This would cause both the cooks and servers to work at a higher level. Thus giving the guest the optimal experience. Servers complain that when its slow they don't get paid. Ask yourself when its slammed, do the cooks get paid extra???? Noo
    So where is the incentive? I used to work at a hotel where the severs made 3 times as much as the cooks....

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