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Archive for the ‘Tip Pool’ Category

Splash…into the “tip pool” we go!

Posted by gratrueities on March 1, 2010

Just last week, the 9th U.S. Court of Appeals ruled in favor of restaurants. The court found that restaurants have the right to create a “tip pool” requiring servers to share a percentage of their tips with kitchen staff  as long – and this is the important caveat – as the restaurant pays their servers at least minimum wage.

A Portland, Oregon waitress claimed that the pooling arrangement violated the Fair Labor Standards Act. Misty Cumbie  argued that because the tip pool at the Vita Cafe (sounds like a place to try soon based on Yelp reviews!) included employees who are not “customarily and regularly tipped employees,” it was invalid under the labor act.  The court did not agree.

This can all get a bit complex – but, to simplify, the restaurant owners wanted their servers to share with the “back of the house” and at least one server, Misty, was not happy with this arrangement.  However, because Misty and her fellow servers were paid at least the Oregon minimum wage (which was BTW $2.10 above Federal minimum wage!), the restaurant owners were not eligible for a tax “tip credit.” Hence, the servers were deemed to be compensated fairly  – the opinion of the court was that “Cumbie received a wage that was far greater than the federally prescribed minimum, plus a substantial portion of her tips.”

Tip pooling seems to be a hot litigation trend of late. This past year, Chili’s Grill & Bar servers won a large settlement against the chain’s parent company, which intends to appeal. Dealers at The Wynn Las Vegas are currently suing their employer for 35 million in back pay and penalties, also claiming that the resort’s tip pool violates state labor laws (we shall see how/if the Oregon case impacts this decision). The ruling for the Wynn case has now been delayed until May. If the Wynn employees are victorious, expect a flood rather than a splash! In fact, they may soon be hiring -if interested, you may want to check this out.

Whether or not legal action enters into the picture, there seem to be strong feelings – both pro and con – on tip pooling. We, at GraTRUEities, see both sides of the argument. It’s complicated because the server is ultimately the one with whom we interact (i.e. puts up with the customer), but we also appreciate clean plates, glasses, silver and a full water glass – and of course a delicious meal! We, therefore, feel that the people who make all that happen should be duly rewarded as well. Of course, in an ideal world restaurant owners could/would pay all of their employees enough that they did not depend on tips for wages, but with so many restaurants struggling to stay open, it seems that labor costs are a problem. And all this brings us right back to tipping! We, the customer/patron fills the void. More to follow on this topic…

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