Employers taking percentage of servers' tips

[mgspaz23]

What is the name of your state? Illinois

Here is the situation:
Our GM was just promoted to Director of Operations for all three restaurants in the Chicago area. He oversees all managers/operations only: he is NOT out selling private parties or events. (Up until three months ago, we had a private party planner who DID hit the pavement and sell private parties at our restaurant.)

The issue is this: when a customer calls our restaurant now and wants to book a party, he handles that. He also tags on 20% gratuity and then takes 3% out of total sales for himself. However, he takes the 3% of total sales out of the 20% gratuity, dropping our revenue down to 17%.

Second part of this issue is this: when these parties are booked, he makes the servers pool tips, so that "everyone wins".

We all feel that it is illegal for a Director of Operations (who earns salary and benefits) to take a percentage of our tips. He is not out selling these parties (more often than not, he will just create a food & beverage minimum, and it is up to US to sell), and he is not working them...sometimes he is not even there for the parties!

Please help me understand if this is illegal, unethical or both.

Thank you!

 

[ArmyRetCW3]

Any service charge imposed by the employer to a costumer, is not tips, the money belongs to the employer he may wish to do what ever he wants with that service charge. Service Charges: A compulsory charge for service, for example, 20 percent of the bill, is not a tip. Such charges are part of the employer's gross receipts. Where service charges are imposed and the employee receives no tips, the employer must pay the entire minimum wage and overtime required by the Act.

http://www.dol.gov/esa/regs/compliance/whd/whdfs15.pdf

 

[akwaitress]

Dont flame me simple question. Would it make a difference if it is billed as an automatic grauity as opposed to a service charge?

 

[justalayman]

if it is a mandatory charge, it is not a tip, regardless what anybody calls it. If the customer has the option of not paying it, then it can be considered a tip.

 

[mgspaz23]

Employers taking percentage of servers tips

The bills that the guests see read as follows:

Food = $x.00
Wine = $x.00
Beverages = $x.00

Tax= $x.00
20% Gratuity = $x.00

Basically, the food, wine/beverages are itemized. The food & beverage minimums are exclusive of tax and gratuity. Always.

So, when the tax & gratuity are added, the guests see it exactly as I wrote it above. Nothing is specified as to how much goes to the servers (17%) and how much goes to the party planner (aka our Director of Operations).

I've heard conflicting opinions on the legality of this in Illinois. I know Charlie Trotter was sued by his servers for doing something similar, and they won. I don't want to sue, I just want what is rightfully ours and to understand the legal side of this.

Pleeeeease help!

Thanks!

 

[justalayman]

I would suggest calling the Illinois department of labor and asking the to give an opinion. In this situation, it does appear to be represented as a tip. Any idea if any customer has ever argued the "tip"?

here is a fed dol publication on tips. cruise down through it and find tip pooling.
http://www.dol.gov/esa/regs/compliance/whd/whdfs15.pdf

http://www.dol.gov/esa/regs/compliance/whd/whdfs2.pdf

I'm having a pain of a time finding anything specific to Illinois.

 

[xylene]

I don't get you math....

Also

Your math is not quite right.

If he is taking 3% of the total, and the tip surcharge is %20... then after he takes 3%...