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Article on tipping out from The Orlando Sentinel

Waiters can keep the change – but not all of it

By Sandra Pedicini, Orlando Sentinel

12:28 a.m. EDT, March 14, 2011

When you leave your waiter or waitress a tip, chances are they don’t keep all of it.

It’s common in the restaurant industry for servers to share part of their tips with other workers, sometimes voluntarily, but often because they have to.

But many workers have balked at what they describe as unfair tip-sharing policies, and some have sued. Starbucks, Chili’s, Outback Steakhouse and Orlando-based Hard Rock Café International are among companies that have faced lawsuits.

Restaurant workers often depend heavily on tips because in many states, employers can take “tip credits” and pay regularly tipped employees less than minimum wage — in Florida, as little as $4.23 per hour.

Read the rest of the article here:

http://www.orlandosentinel.com/business/os-law-and-you-tip-sharing-20110313,0,1299262.story

Tipping out is something that most waiters grudgingly tolerate. Afterall, we are told upfront what we are required to tip out. Problems generally occur when tipout policies change, and several companies who have changed their policies are discussed in the article, mainly because their staff went to court against them.

In states where there is no “tip credit”, i.e. hourly wage is at least minimum wage such as Oregon, there really aren’t too many restrictions that can be made to the tipout. Kitchen personnel are often part of the tip pool in those states. In states that have a tip credit, or allow sub-minimum wage, tipouts are restricted to personnel who directly serve the public.

As much as I respect the work that line cooks and dishwashers do, I’m against the mandatory sharing of tips with them. Their positions are production positions and they are paid a commensurate hourly wage. While they generally make less than waiters overall, they also get raises periodically and have the benefit of a steady and predictable income. And, while generosity is a good thing, I also don’t like the idea of voluntarily sharing tips with them, only because it sets up the possibility of unfair delivery of the food. It’s only human nature to wash the hand that feeds you and it feels a bit like extortion to be forced to pay to get your food in the order that it was sent to the kitchen, or to have someone who’s greasing the kitchen get a better plate than someone who isn’t.  Having said that, if a waiter ever goes out for drinks with a kitchen person, I feel like they should buy at least a couple of drinks for the kitchen person, if not pick up their tab. After all, it’s a fact that waiters generally make more money than kitchen personnel. And they work very hard under hot and dirty conditions. Of course, they are doing what they want to be doing and many of them are working toward the goal of being a chef one day. Waiters really don’t have any upward mobility in their profession, except to work at another restaurant that offers a higher tip income.

Most tipouts take between 15 – 40% of a waiter’s tips. The average that I’ve seen is more like 25 – 35%. Many waiters, including myself, usually grease our backwaiters a little extra as well.

Tipouts can be done two ways – they can be based on sales or they can be based on tips. My current job is the first that I’ve had that has based it on tips, and I definitely prefer that way. That way, everyone benefits or suffers from how well the guest pool has tipped. With sales, you’re stuck at a percentage regardless of how great or poor the overall tip percentage has been. I guess I understand the idea behind tipping on sales. You don’t want the possibility of a waiter hiding cash tips from his or her support staff. But I highly encourage restaurants to consider basing the tipout percentage on tips, not sales. It’s a much fairer system. A waiter can’t complain that they’re tipping out on a stiff.

Anyway, I’ve discussed tipout in the past. If you want to revisit the topic, go here:

https://teleburst.wordpress.com/2009/06/15/tipout-pt-1/

https://teleburst.wordpress.com/2009/06/16/tipout-pt-2/

https://teleburst.wordpress.com/2009/06/17/tipout-pt-3/

One bit of disturbing “news”, if you will; something that was discussed in pt. 2. The Department of Labor used to have “fact sheets” on how tipped employees are treated. Those fact sheets have disappeared from the DoL website. Here is what it said about tipping out:

“Tip Pooling: 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), busboys/girls and service bartenders. Tipped employees may not be required to share their tips with employees who have not customarily and regularly participated in tip pooling arrangements, such as dishwashers, cooks, chefs, and janitors. Only those tips that are in excess of tips used for the tip credit may be taken for a pool. Tipped employees cannot be required to contribute a greater percentage of their tips than is customary and reasonable”.

I don’t know if they have just changed the website and haven’t added the old worksheets back in, or whether because of states like Oregon that specifically allow kitchen employees to share in the tip pool, they can no longer make that statement. And, with other court rulings that have impacted on tipouts, perhaps the governance of tipouts is in flux now. Therefore, it’s best to discuss with your local Wage and Hour people or with a local attorney that specializes in labor law what the current thinking on tipouts is if you have concerns about how your tipouts are being handled.