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Law regarding tipped employees

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I am a waitress at a large privately owned restaurant chain (about 65 stores in at least 5 states) Wait/waitress pay 3.5% sales to "tip pool" which is designated in a computer-generated report at the end of each shift. "Tip pool" is distributed among bussers, hosts, bartenders and platers. I recently discovered that our "tip pool" money pays an hourly salary to these employees, not tips over and above a base. No matter how much is paid in tip pool, these employees make the same money. And even if we have less than the usual help (short bussers or platers -- which can hurt out tips)we pay the same percentage of sales to tip pool. It states specifically in the server training manual that we are never to discuss seating with the hosts, yet technically we pay their salaries. Is this salary arrangement legal? How can a company legally use the wages of one set of employees to pay the salaries of others? This seems exploitive to me and a way for company to save (make) money off our backs.




Your situation is not really different than others in the sense that all companies use the profits of one group of employees to pay for the salaries of others. To my knowledge there is no unlawful activity of your employer in this matter.

Mark B. Replogle


While I accept your explanation of how all companies distribute gross profits as salaries, I
would argue that companies which utilize tipped employees are different. Tipped
employees are inherently entrepreneurial, since our performance impacts, constantly and
immediately, on our wages. Since the amount of money that we make is directly
dependent upon the performance of those others in the restaurant--bussers, hosts,
bartenders and platers-- the large part of whose compensation we pay, I would argue that
our situation is not the same as employees of other companies, who draw a regular and
consistent salary not dependent on the performance on their co-workers.

If the money the we contribute to the tip pool of the restaurant is not going to be
distributed as tips over and above a base salary that the other employees receive, rising
and falling as a function of performance, so that we all have an incentive to work harder,
and bearing a direct relationship to each particular shift worked, then the servers who pay
the salaries of other employees from the money that we have earned as individuals, not
from the profits of the restaurant, should have the right to see a regular reporting of how
our money is distributed.

If we pay the same amount of money no matter for three bussers as we do for 6, but the
three bussers do not receive any additional monies, where does that money go? And if the
income of bussers, hosts, etc, do not rise and fall with those of the servers, where is the
incentive for them to work hard?

I have no problem sharing the wealth with other employees, but I lose money every day
from insufficient personal, either in numbers or performance, while the company that I
work for, a highly profitable company, takes the same percentage of my sales to pay these
employees. I lose, the other employees whose salary I pay lose, and, it would appear, the
company wins. If it is legal for a company to be making money by taking money from its
employees, it should not be.



I work in a restaurant as well. As a server, I am expected to tipout 1% to the busser, and 1% to the foodrunner. When I had first started working there, the company started changing it to where the bussers and runners would receive these tipouts on paychecks (somewhat similar to your situation). The next thing that happend was that all of a sudden we were shorthanded and losing our best employees (bussers and runners). So they changed it back to where the bussers and runners collect the cash tipout the next day. So on a busy night they make more, just like servers do based on the percentage of sales. It works out. And sometimes we as servers, tip a little more based on the work that was done. I suggest you talk to your bussers, etc. It seems to directly affect them, and if something was done like at my restaurant, you might be able to get it changed. Just my 2 cents!

Love, Peace & Happiness!!

Ex HR Guy

While I agree with Attorney R that is the way it is often done, I'd discuss that with a labor union person if you want to find out. It sure sounds like a rip off, but it may be a term and condition of employment, that unless outlawed by your state, is legal.

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