UnderCover Waitress: January 2014

Tuesday, January 14, 2014

Not Tips, Not Wages, It's About Pay Ratios

I don't usually cross-post things here with articles published at PayScale. However, this is (in my not so humble opinion ;-)) important. Share this with your friends who work in the kitchen. I've often said that it's a bad idea to pit the kitchen against the dining room by paying poor wages to the cooks and letting them feel green over the amount of tip money we make on a good night. Yes, it is illegal to have to tip out the BOH, but I am also talking about the personal/work dynamics the situation causes.

No employee should be encouraged or even allowed to look to other employees (not to mention more vulnerable and expendable employees) for their wages. Some of the other FOH staff should not be depending upon servers to make enough money. Bartenders and hostesses are doing specific jobs for the employer; maybe the employer should pay them better than $8.50 per hour.

Employers pay wages. If your employer has to take the bus to work and has beat-up shoes, he may be telling you the truth when he says he can not afford to pay you more. Forget the shoes; look at what your employer drives.

If we stop getting distracted by minimum wage arguments and start talking about pay ratios we may eventually (am I an optimist?) reverse the problems of the working poor. It's egregious that people work full time for low wages while their bosses are setting six figure salaries for themselves. In the restaurant industry, those same flush bosses expect their waitresses and waiters to compensate other staff.


Forget About Wages, It's About Pay Ratios

Anyone who has ever had a boss plead poverty as an excuse for not giving raises, or even paying living wages, needs to read this article. The United States of America has no regulations regarding the difference between lowest and highest paid employees and CEOs of companies. That means people who pay minimum wages with no benefits to workers are free to set six figure take-home salaries for themselves, and it happens all too often. The fight to reverse this growing gap is starting.
Read more: 
http://www.payscale.com/career-news/2014/01/forget-about-wages-it's-about-pay-ratios

Wednesday, January 8, 2014

Pay Stubs and Tip Outs

Ask the Waitress!
I'm a bartender at a fine dining restaurant in Florida. The servers give up 3% of there total sales, 1.5% to the bussers, and 1.5% to the bartenders. It's automatically deducted out of their checkouts at the end of their shift. I'm told the total 1.5% to the bartenders is divided by the number of bartenders that worked that day, day shifts get day shift tip share and night shift gets night shift tip share.  The issue is this "tip share" is not itemized on our pay stub, so I never know how much tip share I'm getting each bi-weekly pay period. I'm told the servers do not declare their tip share and that it's taxed on my paycheck even though I have no idea how much the tip share I'm supposed to be getting is. Is this a normal practice? Management says this "tip share" is part of the reported tips on our pay stub. I don't understand why it's not itemized separately on our pay stub. Have you ever heard of this practice before?
It sounds like your employer is watching and controlling the tip sharing situation. This is a good thing, in my opinion. Servers are not paying taxes on money they gave to other employees, such as bartenders. Also, the employer is probably paying attention to whether or not waitresses are owed a tip credit. In other words, if they don't make minimum wage, the employer would know that and would supplement their income.

People are only paying taxes on the money they get to keep. That means you, as a bartender, will pay taxes on your share of servers tips.

Your frustration seems to be that the tips you receive from servers are lumped in with your own bartending tips on your pay stub. Therefore, you do not see the difference between what a bar customer left you and what a waitress paid you.

To the best of my knowledge, this is legal and there is nothing wrong. From your employer's perspective, and the IRS's perspective, there is no difference between tips you earned directly (from customers sitting at the bar) and tips you earned indirectly (via waitress tip share.) Tips are tips. Tips are also income, so they get reported and taxed.

A tip is a tip is a tip.

If you want to know because you think you are being stiffed by servers; it sounds as if management is already overseeing server tip outs. If you think the managers are stiffing you... If you have good reason to believe managers are pocketing tip money that belongs to you, you may quietly contact the Department of Labor. But if you don't have any other reason to suspect foul play, please understand that, based solely upon what you describe, your employer is doing nothing wrong, and you have nothing to worry about.

Hope this helps, and thanks for Asking the Waitress!

Monday, January 6, 2014

But Isn't It Strange... More On The Tip Out Debate

 Received a comment this morning on my last post. I would like to respond to his/her questions here.

This whole whether or not to tip out situation is very aggravating. As a manager of a restaurant, I've been at a cross roads with the tip out. When I was a server, I was always told we were required to tip out a certain percentage to both back and front of the house employees. I agree that it was unfair to force me to give a portion of my hard earned money to someone else, especially if I felt they didn't do anything for me. But isn't it also strange that servers only think that it's only the front that makes the restaurant successful? I've worked with other servers who were never at their tables, always short-cut their side work and then complain about everything no matter how much money they made. I've also worked in the back as a cook and can recognize the unfairness in giving money to the kitchen if they really are just standing around doing nothing. But doesn't a great dining out experience require a smooth running restaurant with great food AND great service? I have never forced my employees to tip out to anyone on either side but have given them a choice. If they choose to tip out they only need to tell me how much so that it can be accounted for in their reported tips, otherwise I don't ask or say anything. Is it illegal for me to do that? 

Okay, let's have a conversation:

 This whole whether or not to tip out situation is very aggravating.  I couldn't agree more! :-) And, based upon the number of comments and questions I get on this issue, tons of people agree with us on this point.

required to tip out a certain percentage to both back and front of the house 
Being required to tip out the back of house is against federal law. No state may require it, period.

Regarding "a certain percentage," that is complicated but in most states it is legal. In Kentucky, servers may not be required to tip out; it is voluntary. In Massachusetts, there is language about a reasonable percentage, and "reasonable" seems to refer to some sort of industry standard. It may come into play if most restaurants require 15 percent and one restaurant requires 30 percent. The employees tipping out 30 percent may have a valid (legal) complaint.

unfair to force me to give a portion of my hard earned money to someone else, especially if I felt they didn't do anything for me.
I understand your frustration. The problem is I've seen too many situations when support staff are stretched too thin, then servers complain and don't want to tip them out. Sometimes somebody isn't pulling their weight, but other times they are either in an impossible situation -- and we all know some servers are unreasonable.

But isn't it also strange that servers only think that it's only the front that makes the restaurant successful?
This one sentence is the reason I am turning your comment into a blog post. You are making an unfair and illogical assumption. The fact that the federal government has gone so far (but not far enough) to protect servers from exploitation does not mean that servers do not recognize the kitchen's contribution or accomplishments.

On a side note, I've worked with kitchens that think it's all about them, and I've worked with kitchen staff that appreciate teamwork and cooperation between them and the front of house. But it's beside the point.

The kitchen's envy of server tips is caused in part by a lack of appreciation of what we do, and also in part by employers underpaying them. Kitchen staff who have never waited tables are green with envy on busy nights when our take is high, but on slow nights when we get sent home and they get paid the same, consistent amount of money to make a few dinners they don't give us a thought. I've never had a kitchen employee call me on a slow night in the winter to make sure I could pay my heating bill, but G-d help servers if some kitchen staff sniff money on a good night. (Don't get me wrong; I have worked with some absolutely lovely cooks and chefs -- but I've also worked with some donkey butts. We all have.)

I've also worked in the back as a cook and can recognize the unfairness in giving money to the kitchen if they really are just standing around doing nothing.
Should the kitchen give servers money on slow nights? Depending upon your state, servers make less than minimum wage. So, to be "fair," the kitchen should have to supplement server incomes on slow nights if the servers have to supplement kitchen incomes on fast nights.

I'm not advocating we do this -- I'm trying to point out that it is silly to require employees to pay each other. It is the obligation of the owner to pay people -- and not underpay people.

I've worked with other servers who were never at their tables, always short-cut their side work and then complain about everything no matter how much money they made. 
If that is happening now, you are the manager. You know what to do -- have a private conversation and hold them to the standard of better behavior.

If they choose to tip out they only need to tell me how much so that it can be accounted for in their reported tips, otherwise I don't ask or say anything. Is it illegal for me to do that?
No, your behavior is perfectly legal. I thank you for being smart and responsible enough to not have servers reporting and paying taxes on tips that they paid to somebody else. (That seems to happen a lot.)

For the record, if tipping out is voluntary then the waitress may do whatever she wants. You are not breaking the law, but you should still tread carefully. Let's say some servers choose to tip out the kitchen; others don't. Some cooks start making food faster for servers who tip out. Now, there is pressure on the waitresses to tip out the kitchen. If a reasonable person would say that servers are forced to tip out the kitchen or suffer consequences, you may still find your employer defending himself against a wage theft allegation.

You sound like a thoughtful manager who wants to do the right thing. Thank you for writing your comment.

Wednesday, January 1, 2014

State Specific Questions About Tip Outs and Tip Pools

Happy New Year to all! Hope your 2014 is starting off with a bang and a great start. I am starting my new year with a little research about the thorn in all of our sides: the ins and outs of tip pooling laws.

It's a complicated area of the law precisely because of how difficult it is to spell out and mandate every possible situation in each and every individual restaurant. I think that lawmakers have shied away from this area partly because it's complicated or possibly because they simply don't care.

This came in recently from a fellow restaurant worker in the Cincinnati area:
Happy New Year,
Hello, I recently just quit a quaint bistro and the reason was NO BUSINESS and second I for some reason had to tip pool with the KITCHEN-no way. I have a feeling that this is illegal and only FOH may get my percentage. My question is as follows: Where can I find a list of Tip out rules and procedures for the states of Kentucky and Ohio?
Happy new year to you as well. It is against federal law to require waitresses and waiters to share tips with the kitchen. Anyone with a question about the legality of tipping out the BOH must read:

Against Federal Law

and

Department of Labor Fact Sheet #15

I would love it if the state governments would make their tip rules and regulations easier to find! :-) However, here is what I found for you:

Kentucky

This page of Frequently Asked Questions applies to all employees in the state of Kentucky. While it does not cover tipped employees specifically, it is still relevant to tipped employees. For example, in Kentucky you are entitled to a ten minute, paid rest break for every four hours that you work.

FAQ Kentucky

and this page tries to explain the state of Kentucky's tip credit:

Kentucky Tipped Employee Minimum Wage. 

According to the Nolo Press, Federal law and most states allow restaurant owners to require servers to participate in valid tip pools. However, this state of Kentucky does not allow employers to require participation in tip pools. Therefore, if you work as a waitress or a waiter in the state of Kentucky, it seems you may legally refuse to tip out other FOH staff.

Nolo Press regarding Kentucky.

The state of Kentucky does allow voluntary tip pooling. I can imagine how that plays out: three servers are asked to tip out a bartender. Whoever refuses has trouble getting her drink orders filled. Or there could be a guilt trip. For example, the employer won't pay the busser more than minimum wage. The employer makes it the responsibility of the servers to compensate the busser.

Ohio

In the state of Ohio, employers may only take a 50% tip credit. That means that the tipped minimum wage in Ohio must be at least half of regular minimum wage.

In Ohio, you may be required to participate in a valid tip pool. A valid tip pool is one in which only tipped employees participate in. (That is to say, FOH.) The state of Ohio allows employers to require servers to put a portion of their tips into a pool to be divided among other FOH staff.

 The following are two Nolo Press articles you may find of interest:

Nolo Press regarding Ohio

Nolo Press on Tips. 

Best of luck to you, and thank you for Asking the Waitress!