Monday, January 3, 2011

Should Restaurants Enforce Tip Pooling?

Recent legislation in New York has provided rules regarding how tipped employees should divide the money that they make, effective February 1st, according to The New York Times. While businesses, including restaurants, are able to determine their method of fairly diving tips – pooling with the entire staff or having servers share a percentage of their tips or sales with bartenders, hosts, food runners and bussers, they are required to keep track of all tip sharing, and if investigated these records are subject to inspection. The law also defines which employees should be included in tip sharing (in a restaurant this is everyone with the exception of kitchen staff and management). This legislation is in response to the numerous lawsuits over restaurants not paying their tipped employees what they felt they were owed, including the famous Batali-Bastianich Hospitality Group.

Of course there are two sides to everything. Sharing tips encourages teamwork for those who view helping each other as benefiting them personally. Others view it reducing the motivation for individual employees, since they may be able to slack off, while still making the same amount as the rest of their co-workers. A friend and former co-worker of mine currently works at a local restaurant, where the entire front of the house staff splits all tips evenly after every shift. After working at many different Atlanta restaurants throughout his career, he described it as creating “a more positive work environment for everyone.” As anyone who has paid their rent or do pay their rent with the tips they earn know, there are plenty of gracious restaurant patrons out there who have no problem stiffing a server whether it is deserved or not. A table like that can ruin a server’s night financially (not to mention their mood) and tip pooling can alleviate some of that burden. Yet, it would be unfortunate for one server’s mistakes to negatively affect another server.

There is one other (illegal) option for restaurants – keeping all of the servers’ tips. I recently discovered that one of my favorite Indian restaurants do not let their employees keep tips. It is safe to say I will not be returning, and I certainly hope that this is an uncommon practice.

What do you think: Should restaurants enforce tip pooling or sharing? Should the government be getting involved?