When servers are lucky enough to get a tip, it's not all theirs
Do you ever wonder what really happens to a server’s tip?
Often, tips are placed in a pool and allocated proportionately to each staff member at end of the shift.
In larger restaurants, servers' total sales are tracked electronically. The shop owes the server credit card tips, while the server owes the house the total of what customers paid in cash, plus a percentage ranging from 3 to 5% to split with backroom staff.
At other places, servers kick in a generally agreed upon portion of their tips to share among the kitchen, bar, bus and shosts staff – and, often, salaried floor managers.
Because tips are off the books, even if a table stiffs the server, the server still has to split the tips between bar and kitchen staff.
For the most part, all this is done on the honour system, backed by the fact that servers who treat their coworkers poorly will quickly find themselves ostracized – which, of course, costs them money.
Orlando-based Darden Restaurants, however, is now standardizing how waiters and waitresses at Olive Garden and Red Lobster share their tips under a new policy that's really seems part of a larger plan to trim labour costs. And more chains are likely to follow.
Could the same thing happen here? Quite likely, as recession-weary eateries look for ways to trim expenses, particularly in light of continued upward pressure on the minimum wage. Some, for instance, are now passing credit card fees on to servers.
How are tips shared where you work? Are you kicking back to the house? Do you have pay the processing fees on credit card tips?
By Gordon Powers, MSN Money
Posted by: SavingMentor | Sep 26, 2021 10:16:59 AM
Wow, passing credit card fees on to server is just wrong!
I think it's good that other restaurant employees get a share of the tips, but it's tough that it isn't very standardized and that if no tip is left, the server is still responsible for paying up. I'm sure it averages out decently well over the long term though.
Posted by: Elmo | Sep 26, 2021 4:24:57 PM
Obviously restaurants must pay 3-5% to the issuing credit card company on any credit card transaction. I'm quite certain this is absorbed into their "cost of business" evaluation since it is logical to assume that their clientele numbers would be reduced if they didn't accept credit cards. I'm also certain that the 3-5% also figures in their pricing structure. However, has anyone ever had their total meal bill REDUCED by 3-5% when paying cash ? Probably not... and if not... wouldn't it be fair if cash transactions and the resulting 3-5% "savings" to the establishment be added to the staff tip pot.
Posted by: Alyre | Sep 27, 2021 6:58:16 AM
Last place that I worked as a waiter the owners kept most of my tips while they sat on their large behinds. I estimate close to $5000 within 8 months. I filed a complaint with the provincial department of Labour Standards 5 months ago and the owners are very uncooperative.
Posted by: Bobbi | Sep 27, 2021 12:44:08 PM
I absolutely disagree with tips being shared with other wait staff OR with management. It is WRONG! I use to work in this industry and worked hard for my tips, where other staff just seem to do their job, a job which incidentally they were being paid for. It is time that the employers started paying a decent livable wage to people in this industry. Tips are for GOOD SERVICE, which in my opinion has taken a dive in recent years, most likely do to the fact that no one longer has to work for tips, they just take it for granted that they deserve it. And expecting employees to pay for the businesses credit card charges..OMG...I think it is time for employees in this sector to get a backbone and stand up to their employers...It is definitely time for a Union in this industry..
Posted by: Alex | Sep 28, 2021 4:07:19 AM
bobbi, i think you are incredibly ignorant to think that a server deserves 100% of the tips, especially considering most cooks work longer hours then servers, and work just as hard as a server - if a server is rushing around, it is certain the cook is working just as fast to keep up. Secondly, 50% of the costomers tip is based on how much they enjoyed the food. ( this really only applies to proper restaraunts, ie. not boston pizza or other such heat and serve places) I have worked every aspect of a restaraunt, a cook, server and in the dishpit, and i think its pethetic that servers almost always feel they deserve it all, 3 or 4 % to the back of the house is incredibly inconsiderate. Although i do agree it is rediculas that managment soemtimes get there greasy fingers in the pot.
Posted by: Terri | Sep 28, 2021 10:37:35 AM
The absolute truth is that restaurant owners have, for several years now, been increasing the pay of "back" of the house staff to a competitive level in order to retain good, clean, competent people. "Front" of the house staff have not received the same increases because the industry domeheads DO factor in the tips that front of the house people will be receiving if customers feel they deserve it. Front of the house staff SHOULD keep 100% of their own tips because tips are simply the public bringing the servers' wages up to the same competitive level that back of the house have had their wages increased by owners. It is a way for owners to save a little money (cheap buggers) and for servers' pay to fall more in line with back of the house wages.
Posted by: B Gourlay | Sep 29, 2021 10:57:27 AM
I think the public is "expected" to automatically provide a 10-15% tip when the bill arrives. For the most part the servers are doing what they are paid to do as well as the cooks and quality of the meals. After all if the restaurant provided inferior food and poor service they would lose customers. I believe the management should pay their staff adequately to run a business without depending on TIPS. Rarely can I say I have received exceptional service but seem to automatically payout the tip.
Posted by: PETER | Sep 29, 2021 1:04:33 PM
i think that if a person has to rely on tips to get by look for a higher paying job i dont get tipped if i do a good job !!!!!!
Posted by: Val | Sep 29, 2021 1:53:37 PM
I tip if the service is good, not for the quality of the food being served/ if the food is poor I don't go back....
Posted by: Jonny | Sep 29, 2021 3:49:32 PM
Sounds like the problem lies within management and their factoring the tips as part of the servers wage. The moment a server is expecting to get 15-20% is like the CEO of a big corporation living off his Christmas bonus. What happens when that "bonus/tip" doesn't come around? If your in the restaurant industry to make a living "or trying to get rich" you should be using it to go back to school and get a proper job.
Also the tips in my mind are for the full experience of the restaurant. Serving is a large part but quality of food and atmosphere play a part. If a spoon is dirty is that the servers fault? No its the dish pit. If the food is terrible is that the dish pits fault no it the cooks. You have to base your tips on the entire meal and experience. A manager puts a lot of work into the restaurant as well. You assume they are making a decent salary, what if they aren't why not tip them? go to a small mom an pop shop and the whole experience is based on them. I'm directly tipping the managers.
It's a fine line between the folks at Tim Hortons making my coffee the way i like it and me not tipping them to the Greek food place that brings a plate out from the kitchen and smiles, and I'm expected to give the server 20%?
Posted by: Lee-Anne | Sep 29, 2021 4:14:45 PM
In one place I worked you had to pay the credit card percentage just on the tip you made. To me, this is fair. Why should the boss pay 2% on money he didn't make. In this day and age that ads up to a lot of money in a day. In other places I have worked there is an unfair practice of the house using the servers tips to pay their staff, but I have only seen this in large francises. The smaller mom and pop places understand the value of their servers and treat their tips accordingly. Servers should be mindful that they are given an enormous amount of help from bussers and cooks as well and these people deserve a little of those tips. Think about when that drink spilt and you couldn't clean it and the busser did or the time you forgot to punch in an order and even though the kitchen was swamped they got right on it and had it too you pronto. Servers for the most part make good money and in some places others take advantage but if everyone is fair, everyone will be ahead in the long run and the server will still make a great living. Bosses who don't realize the value of a great server who knows how to sell, and keep the people coming back for more won't keep good servers which will keep customers away.
Posted by: Dana | Sep 30, 2021 1:29:25 PM
I have served for three years and do believe that we should tip out to our back of house, hostesses, and bussers. That is fair. Something to make note of though, is that kitchen staff do make a higher hourly salary and they also tend to have more regular hours. As a server, unless you are closing the restaurant, you are only working a 3-4 hour shift. So you make $50 in tips and about $30 in wages, totalling $80. A kitchen staff will work their 8 hour shift at lets say, $11 and recieve maybe $5 in tips totalling about $95. The pros to serving: it averages out to a high hourly wage, you get cash in your hand the day of your shift. The cons: You never know what you'll walk away with. Could be $5, could be $70. Pros to working in the kitchen: more consistent hours and consistent wage. You know what you're going to leave with when you go to work. The cons: You won't experience the peaks of cash from the good tippers, everything is based on sales. You have to work longer hours.
All in all, tipping in the industry is all about restaurants saving every dollar where they can. If they had to pay servers better hourly wages, you would find the cost of menu items would increase significantly. Our menu items went up 5 cents because minimum wage went up 25 cents. I think you would find that restaurants would run understaffed and the service would suffer....and you'd be paying the wage anyways. Who knows which situation is better really?
Posted by: Isabelle | Oct 1, 2021 11:37:30 AM
At our restaurant we tip pool equally by the number of hours the person has worked. Most servers work 6-7 hours. Kitchen works 8-10 hours. For instance, a pool of $400 might be split into 32 total hours which would mean 12.5/hour on top of the hourly wage. If you worked 8 hours you would get $100 tips (ie line cook or dishwasher). If you worked 5 hours, you'd get 62.50 tips (ie server). Tip pool closes when restaurant closes which means the closing server and cooks do not get tipped for hours spent cleaning and closing the restaurant, or opening the restaurant before it is open to customers.
Hourly wage is between 9-14 dollars. So you could be making between 19-29 dollars an hour depending on how long you've been there and how good the tips are.
If it were split between servers only, the servers would have taken $200 each (two servers on the floor).
Posted by: David Letham | Oct 4, 2021 12:27:36 AM
I always tip 15% and 20% on the food when service is excellent. In cases where I suspect that my server has to share tips I do 15% on the food and "slip him/her some cash and say this is not a tip, it is a gift". However I abhor the whole system of tipping and relate the story of the server I had in Berlin, Germany, who turned back the tip with thanks and told me "This is not America, we are well paid over here!".