PHIL HARDWICK
How much did you tip the server the last time you had a good meal in a restaurant? Who do you think gets to keep that tip? Would you change the amount you tip if the server did not get it all?
The answer to these questions depends on several things, not the least of which is a U.S. Labor Department proposal to change the handling of tipped income for restaurant employees. The proposal would roll back a 2011 provision that made tips the property of the employee who received them. The rule would only apply to employees who receive at least the federal minimum wage of $7.25 from the employer. There are currently 29 states that have a higher minimum. Under federal law, workers who earn tips as part of their compensation can be paid a lower minimum, $2.13 an hour. As always, one’s perspective determines how the issue is viewed. Let’s take a peek at the perspectives of the customer, the server, the “back of the house employees” and the employer.
Customer Perspective – Many, if not most, customers tip based on the quality of the service received from the server. There have been countless articles written about how much to tip. Some restaurants even provide guidelines right on the check itself. And they are making it easier to add the tip of your choosing. The check received after the last two meals I had in restaurants were presented on an iPad. All I had to do was touch a spot on the screen to add the tip. How convenient.
Server Perspective – Many servers now have to share their tips with the “back of the house” employees, i.e. the cooks, the dishwashers, et al. The server knows that many customers don’t know this. The server might rightly wonder why better service is rewarded if they don’t get to receive all the award. They may also look at other servers who are less professional and less efficient and wonder why those servers are going to get the same tip. When all tips go into a common jar what does it matter? They may even fear that if the server doesn’t receive all the tip then the server will make less money.
Restaurant Owner Perspective – Owning and managing a restaurant is a tough business. Hiring, training and keeping good employees is a critical part of the business. Controlling costs is paramount because profit margins are razor thin. Shared tipping is a way for the owner to reduce costs. Indeed, if tips are shared by all employees it would be possible in many cases to increase the income of the non-server employees who do not have customer contact. By giving tips to the employees, the business itself does not have to report tips as income.
Back of the house employees – These are the cooks, the dishwashers, the ones who bus the tables and those not directly involved in serving customers. They point out that they are an integral part of the overall dining experience. Therefore, they should receive a portion of the tips. They work hard and even aspire to one day be servers so that they can take home more money.
Now for my personal bias. My mother worked many years in a very nice restaurant. She was a professional. So much so that prominent and frequent customers asked for her by name. She even had a signature dish of the restaurant named after her. She worked a so-called split shift six days a week. When she came home at night she emptied her pockets and I helped count her tips. She made enough to raise two kids and buy a house as a single mother. She preached the value of good customer service to me and said that good tips were the evidence of that.
When I heard about the issue of some restaurants requiring servers to pool their tips I began asking servers whether or not they had to share their tips. It seemed the more upscale the restaurant the more likely the servers were required to pool their tips. Sometimes they shared with all other employees, sometimes with only the bartender if drinks were part of the order and sometimes with only the other servers. Apparently, each place had its own policy.
One day last summer while on vacation my family of seven went to breakfast at a popular local restaurant. Our server was fantastic. It seemed no problem for her to handle five adults and two small children. She made us feel welcomed to the area, gave us suggestions on what to do and did a few other niceties to make what could have been a chaotic meal adventure into a most pleasant experience. I thought about how hard she worked. I thought about how hard my mother worked. I left a very generous cash tip. I did not ask if she had to share her tip. As we collected ourselves to leave, I saw that server pull the cash out of the check holder and throw it in a big glass jar beside the cash register. She never even glanced at it. Because I had left an extra tip because of her good service you can imagine how I felt.
With these different perspectives, it will be a Labor Department proposal to watch.
» PHIL HARDWICK is a regular Mississippi Business Journal columnist. His email is phil@philhardwick.com.