Rack 'em up

It's traditional for waiters and waitresses to share a portion of their tips with bussers or other "service helpers." But is it mandatory? Who gets the money? Who makes the decision? What are the rules?

Here's an overview based on foodservice tradition and information from the US Department of Labor and the California Restaurant Association:

What are the stakes?
The percentage of tips that waitstaff share usually relates to the level of service in your restaurant, the contribution of non-tipped staff, and the performance of the individual. State and federal regulators have permitted employers to require their directly tipped employees to share up to 15 percent of their tips. Some restaurants use a Ïpercentage of gross sales system, where the tipped employee contributes up to 3% of gross sales for the shift. Employees can share more than the designated amount, but management can't enforce these arrangements. In addition, employees can't be required to contribute a greater percentage of their tips than is customary and reasonable.

Who can play?
Employer-mandated tip pools or tip sharing can include servers, counter servers, server helpers (bussers or back waiters), and service bartenders. Tipped employees can't be required to share their tips with janitors, dishwashers, chefs, or cooks. Also, restaurant owners and their managers can't share in the proceeds from tip pools, even if they acted as a server or busser.

Let the games begin
If your service staff hasn't tip shared up to this point, you'll want to ease into this gently. As always, we recommend asking your employees about any subject which directly impacts them BEFORE you implement a policy.

One way to ease introduction of a policy of this nature is to have a trial period with before and after measurements. For example, can you show a measurable improvement in sales volume or faster table turn (translating to tip volume) due to server helpers?

Other legal stuff

  • The California courts have permitted employers to terminate employees who would not participate in legal tip pools.
  • Employees who receive tips — either directly or indirectly, via tip pooling arrangements — are required to report those gratuities as income for federal and state tax purposes.
  • If required "tip outs" bring down the hourly wage to below minimum wage, the employer must make up the difference.

To clarify and/or confirm the legal ramifications in your area, you can contact your state restaurant association, your local US Department of Labor office, or the DOL web site at www.dol.gov.


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