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Why Tipping Should Be Outlawed (article) and interesting read. - Page 2

post #31 of 48
Quote:
Originally Posted by MichaelGA View Post

What do you do as an employee that earns $3 / hour and you get a crappy new Chef that screws everything up?  

How do you pay the bills until he is gone? because you won't be making much in tips>.

In the USA, no tips = minimum wage, In California, it is not legal to pay less than minimum wage, period.

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post #32 of 48

A little light reading;

 

http://www.nypost.com/p/news/local/chef_mario_tips_over_dInWVOVgD5Y4zdLYtoEz4K

 

 

http://www.dnainfo.com/new-york/20100304/manhattan/iron-chef-bobby-flay-fork-over-800k-restaurant-workers

 

 

 

http://ny.eater.com/archives/2012/05/lidia_bastianich_offers_to_pay_employees_not_to_sue.php

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I think the most wonderful thing in the world is another chef. I'm always excited about learning new things about food.
Paul Prudhomme
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post #33 of 48
Thread Starter 

So it seems that Tips are crippling the industry vis-a-vis law suits, whether real or imagined.

 

I guess in these situations... pay everyone minimum wage and return all tips?

Kind of hard to imagine anyway of doing things that won't land the owners in trouble.

----

 


"Plus, this method makes you look like a complete lunatic. If you care about that sort of thing".  - Dave Arnold

 

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"Plus, this method makes you look like a complete lunatic. If you care about that sort of thing".  - Dave Arnold

 

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post #34 of 48

Just a couple of points from a country where tipping is supposedly included in the bill. 

1. the restaurant owners almost all (illegally) confiscate the service charge. 

2. waiters are paid so little they can barely afford to eat at home, never mind out.  I know waiters who earn 500 euro a month for more than 40 hour weeks.  (a single bed shared in a room in an apartment on the outskirts of town can be 200 or 300 euros.)   Because of the service charge, patrons will give maybe a euro max for a 20 euro meal.  They say "it;s included in the bill" but that's a bunch of crap.  It goes to the restaurant owner.

3. most people working as waiters don;t even get paid on the books. 

4. restaurants don;t have turnover - the client has the table for the night.  Rarely are there two turns.  So income from tips is even less. 

 

A decent wage is important.  Tips can be extras that a good waiter can get if he does a good job. 

 

p.s. i always tip generously.  I know too many people who work as waiters, what they earn and how they;re treated.  If i can;t afford the tip i don;t eat out

"Siduri said, 'Gilgamesh, where are you roaming? You will never find the eternal life that you seek...Savour your food, make each of your days a delight, ... let music and dancing fill your house, love the child who holds you by the hand and give your wife pleasure in your embrace.'"
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"Siduri said, 'Gilgamesh, where are you roaming? You will never find the eternal life that you seek...Savour your food, make each of your days a delight, ... let music and dancing fill your house, love the child who holds you by the hand and give your wife pleasure in your embrace.'"
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post #35 of 48

Wow! I'll remember to not follow that "While in Rome..." saying while in Rome. In other words, I'll be tipping fat. 

post #36 of 48
Quote:
Originally Posted by MichaelGA View Post

What do you do as an employee that earns $3 / hour and you get a crappy new Chef that screws everything up?  

How do you pay the bills until he is gone? because you won't be making much in tips>.

If you are a good server, you go to a better restaurant where you can make more money. How much do you think that restaurant owner is going to be able to afford to pay that server when their revenue drops from that same bad chef if there is no tipping? Probably minimum wage, which the tipped server has to be paid at a minimum anyways. The tipping policy doesn't change that situation at all. Lowered revenue means everyone makes less money and your better talent will move on where they can make more money. That's the glory of a free market. Employment is not a right, but rather a contract which you can get out of at any time without ramification if you are an employee.

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post #37 of 48
Thread Starter 

So essentially if the kitchen is complete crap the servers have no choice but to leave in order to earn a living.

 

Kind of a catch 22 situation - servers can't make a living because they can't make tips... the restaurant can't pay a living wage because it would bankrupt them with reduced revenue from crap kitchen. (and traditionally BoH gets no tips... kinda weird as the entire operation is in their hands)

 

It seems to be a big strike against the tipping system as it stands.  (not talking about areas where servers get - min wage + tips)

 

Anyone know of any jurisdiction that works along the following lines? 

 

- all tips / gratuities / service fees are pooled separately and then divided out per employee / shift... probably a bit of a headache unless BoH and FoH are on the same schedules.  (just brain-storming here)

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post #38 of 48
Quote:
Originally Posted by MichaelGA View Post

So essentially if the kitchen is complete crap the servers have no choice but to leave in order to earn a living.

 

Kind of a catch 22 situation - servers can't make a living because they can't make tips... the restaurant can't pay a living wage because it would bankrupt them with reduced revenue from crap kitchen. (and traditionally BoH gets no tips... kinda weird as the entire operation is in their hands)

 

It seems to be a big strike against the tipping system as it stands.  (not talking about areas where servers get - min wage + tips)

 

Anyone know of any jurisdiction that works along the following lines? 

 

- all tips / gratuities / service fees are pooled separately and then divided out per employee / shift... probably a bit of a headache unless BoH and FoH are on the same schedules.  (just brain-storming here)

That situation exists whether the servers are tipped or paid a wage instead. How they are paid makes no difference at all if there is no business, they'll still have to leave in order to earn a living. You don't expect that an owner is going to keep giving the same number of hours to the same number of servers when the business volume has decreased, do you? If they did, they would soon be closed and everyone would be out of a job.

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post #39 of 48
Thread Starter 
Quote:
Originally Posted by Brandon ODell View Post

That situation exists whether the servers are tipped or paid a wage instead. How they are paid makes no difference at all if there is no business, they'll still have to leave in order to earn a living. You don't expect that an owner is going to keep giving the same number of hours to the same number of servers when the business volume has decreased, do you? If they did, they would soon be closed and everyone would be out of a job.

Not talking about volume - there are a lot of places that have crap food but high-volume (tourist traps namely).   I was just wondering about the whole - tips making up a portion of your hourly wage and if there was any recourse.

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post #40 of 48
Recourse is already part of the system. The server still has to make paid minimum wage at least, and the owner has to make sure their servers are making as much or more money than they can at their competitor, or they'll go somewhere else to work. Business owners that can't or don't go out of business, expecially in the restaurant world where 60% of new restaurants fail any given year.

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post #41 of 48
Thread Starter 

So if a server makes 2$ an hour and can show he/she doesn't make any tips the owner has to make up the difference?

THat sounds like a planning nightmare.

...

How is the owner obliged to make up to minimum?

Straight wage or cash or paid-less-taxes, etc?

 

Is it calculated as part of the taxes?

or is It just calculated on 'faith'?

----

 


"Plus, this method makes you look like a complete lunatic. If you care about that sort of thing".  - Dave Arnold

 

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"Plus, this method makes you look like a complete lunatic. If you care about that sort of thing".  - Dave Arnold

 

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post #42 of 48

MichaelGA,

 

IIRC, the employer is entitled to credit 15% of sales/server to the minimum wage calculation for those states that permit a less than minimum wage for FOH personnel.

 

Example: Minimum wage =$8.00/hour, Server wage = $2.00 + tips. For each hour worked, gross sales must be greater than $40 ($6.00/.15) or the employer must make up the difference, i.e. if gross sales = $20, then tip allocation is $3.00 ($20 * 0.15) and the employer pays $2.00 minimum PLUS $3, regardless as to what actual tips are. The employee MUST be paid $8.00/hour gross pay MINIMUM.

 

Now, as I understand it, the calculation is not done for each hour but is done for the shift. Say a four hour shift, gross sales must exceed $160 or the employer pays $8.00 ($2.00/hour * 4 hours) PLUS 15% of the difference of $160-gross sales as long as gross sales is less than $160/4 hours.
 

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post #43 of 48
Quote:
Originally Posted by PeteMcCracken View Post

MichaelGA,

 

IIRC, the employer is entitled to credit 15% of sales/server to the minimum wage calculation for those states that permit a less than minimum wage for FOH personnel.

 

Example: Minimum wage =$8.00/hour, Server wage = $2.00 + tips. For each hour worked, gross sales must be greater than $40 ($6.00/.15) or the employer must make up the difference, i.e. if gross sales = $20, then tip allocation is $3.00 ($20 * 0.15) and the employer pays $2.00 minimum PLUS $3, regardless as to what actual tips are. The employee MUST be paid $8.00/hour gross pay MINIMUM.

 

Now, as I understand it, the calculation is not done for each hour but is done for the shift. Say a four hour shift, gross sales must exceed $160 or the employer pays $8.00 ($2.00/hour * 4 hours) PLUS 15% of the difference of $160-gross sales as long as gross sales is less than $160/4 hours.
 

 

You must live in a state with a different process that the U.S. Wage and Hour Division. By the federal law, it's a lot more simple. The employer must simply make sure the employee makes at least the federal minimum wage, paying at least the minimum wage for tipped employees of $2.13. Therefore, there is a cap of $5.12 of tips earned that the employer can credit toward the calculation, but no requirement that the employee must use a percentage of sales. States, even cities, can always adopt labor laws more strict than the federal laws.

 

The calculations are based on the length of their normal pay period. If they pay weekly, then they have to calculate based on the tips earned that week plus their wage pay, divided by the hours worked that week. Any difference between that amount and the amount they would have earned at minimum wage has to be made up. If they pay bi-weekly, then the tips and wages for the whole two weeks is added up and divided by the hours worked those two weeks. Overtime pay is different. It is always calculated by the work week.

 

Here are some good reference links:

http://www.dol.gov/whd/flsa/FLSAProvisions-Tips.pdf

http://www.dol.gov/whd/regs/compliance/whdfs15.htm

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post #44 of 48
Quote:
Originally Posted by MichaelGA View Post

So if a server makes 2$ an hour and can show he/she doesn't make any tips the owner has to make up the difference?

THat sounds like a planning nightmare.

...

How is the owner obliged to make up to minimum?

Straight wage or cash or paid-less-taxes, etc?

 

Is it calculated as part of the taxes?

or is It just calculated on 'faith'?

 

Yes, the owner has to make up the difference, so servers are guaranteed to make at least the federal, state, or city minimum wage, whichever is higher. San Francisco has a minimum wage of $10.55 per hour, the highest in the country, and no allowance of a tip credit, meaning that there is no different minimum wage for servers. Washington DC is voting on a bill making the minimum wage for large store retail workers $12.50 per hour.

 

The owner makes up the difference on the employee's paycheck. All employees get a paycheck, even tipped employees. The makeup pay would be a separate line item from anything else. The restaurant can "name it" whatever they want on the paycheck. The name has no consequence. Just like all other wages, makeup pay is subject to payroll taxes for both the employee and the employer. For an employee, all they have to do is add the wages paid with the makeup pay and the tips, then divide it by their hours worked to see how much they were actually paid per hour.

 

There are also reporting requirements for businesses that use a "tip credit", meaning any that pay less than the federal minimum wage and use tips to make up the difference. They are required to supply certain information to the employee to verify the employee is making more than minimum wage. In most cases, the paycheck stub alone meets those requirements.

 

Is the process to calculate makeup pay burdensome? Not for a reasonably organized business owner. A lot of payroll softwares will automatically alert the business owner if a tipped employee's wages dropped below the minimum, and tell them what they have to make up. It is just messy enough though that very few restaurant owners will go through the hassle of calculating makeup pay every week. What they do instead is to offer higher than minimum wages to make sure the employee always makes more than minimum wage and they don't have to do any extra work. This is better for everyone. Very, very few servers make minimum wage. Where you find minimum wage earner servers, you'll find a restaurant having trouble keeping help and getting ready to go out of business to boot.

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post #45 of 48

I stand corrected, I believe California does not allow tip credits.

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post #46 of 48
Quote:
Originally Posted by PeteMcCracken View Post

I stand corrected, I believe California does not allow tip credits.

 

True. Neither do Alaska, Guam (territory subject to federal rate), Minnesota, Montana (for businesses with annual sales over $110K), Nevada, Oregon and Washington.

 

Many other states that do allow tip credits have state wages higher than the federal minimum wage, and there are a lot of different ways they allow it to be calculated. For example, North Dakota doesn't allow more than 33% of a server's claimed rate of pay to be made from tips, so effectively, their minimum wage for tipped employees is $4.86 per hour.

 

Here's a good list of all the state minimum wages and their allowances for tip credits. You can click on the map for individual states or just scroll down to see them all in list format.

http://www.dol.gov/whd/state/tipped.htm

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post #47 of 48

I want to resurrect this thread again because the tipping issue has been in the news lately.

 

The amusing scene this past week of those people who were on strike as fast food workers, wanting $15.00 an hour was a joke.

Turns out, that very few of the people that were holding the signs and protesting, were actual workers.

The unions that want a piece of the action bused in these people to protest.

The issue was more of getting people to join the local union then the desire to see a better wage.

When the local newscaster on the street posed the question to a protester......

" How do feel about the prices going up to meet the costs of labor going up?"

The person said, and I quote: "I don't care and it's not my problem."

 

I know that the tipping issue is not going away anytime soon.

post #48 of 48
I don't understand this.., I make 17$ per hour as a chef.. The servers I work with walk at minimum on slow nights with 100$ for max 4 hr of work.

On busy nights I've seen them leave 4 out of six shifts with 400+ cash in their pockets for 4-5 hr work.

They make way more than me on average our servers makes around 55k a year. I'm at 35k max with overtime and tons of hours.

They need their tips but at the same time I hate the ones who don't claim it. I know plenty who do not claim their cash money which is wrong if you make it you should claim it.
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