Restaurant owners taking tips from staff—and not in a good way
The restaurant industry in Ontario struggled more during the recession than most other industries. The one-two-three punch of the economy slowing down, the reduction in expense accounts and a recent increase in the minimum wage has a lot of managers scrounging for money. But after their first reaction to the wage bump looked like it was written by Mr. Burns, the industry has settled on a new tactic: taking a bigger chunk of the staff’s tips at the end of the night—sometimes up to four per cent.
Reports the Star:
A tip-out to the business wasn’t common until a year ago. But when the economy slowed down, some restaurants introduced the concept. When the minimum wage rose from $9.50 to $10.25 about two weeks ago, some more restaurants started the practice.
Some protested, some complained, and one outraged server posted a riposte on craigslist.
She “warned” against working at a popular Toronto waterfront pub, saying that it’s now asking for a 4 per cent tip out of entire sales, including to the management.
The practice seems pretty sketchy to us. Because tips are off the books, even if a table stiffs the server, the server still has to tip the owners and split the tips between bar and kitchen staff. The Star quotes one anonymous waitress who begs to have the minimum wage lowered again, saying that she makes less money now than she did before the recent increase. A more realistic solution comes from a spokesperson for the restaurant industry, saying the practice is “unusual,” and if servers don’t want to give up a chunk of their tips, they should leave their job.
• Restaurant bosses take bigger share of the tip [Toronto Star]
23 thoughts on “Restaurant owners taking tips from staff—and not in a good way”
This is not new! I am glad that it is finally being chronicled that servers must tip out a certain amount every night, regardless of whether or not a table tips you. This means that if your table does not tip, you are literally paying to serve them. However, tipping out to “house”, as they call it, is not new; it’s been going on for at least the past 7 years, as far as I know, and it is definitely not uncommon. A 4% tip out is pretty tame compared to some places I’ve worked.
this is not new at all some of your ‘top’ restaurants actually have the servers tip out 5% and up.
This is not a new concept. It has been existent in restaurants for more than 10 years. A tip-out is used to spread the tips to the support staff as well as the front line servers. There are many people involved with a diner’s experience who do not get recognition, it is only fair to share with server assistants, bussers, service bartenders, dishwashers and hosts. As a culture magazine/website that should know the “ins and outs” of the industry it is a little immature that you aired this story from this perspective.
Perhaps the writer should have some experience in restaurants.
4 percent? I’ve been serving in the industry in Toronto for many years and most of the higher end establishments charge 7-9 percent!
I am a support staff who has been affected by this change. Yes its not illegal or uncommon for the house to collect a tipout but how about the fact they took that money from supportstaff. changing the amount of money we earn. I used to make 1% of sales. I now make .1% of sales, went from about 300 bucks a week in tips thats working full time 35-40 hours a week to now making 50 bucks a week. to take the house tip out out of our money while the owners ahve enough money to keep purchasing new restaurants, Change our uniformss every year, forcing us to keep buying new ones. But hey the bosses have enough money to take GM’s to las vegas for a week thats not like a 50 thousand dollar expense. oh wait it is.
This is what happens at middle-of-the-road restaurants (i.e., the majority of restaurants in Toronto) where the front-of-house, and back-of-house staff members are hired and fired as if they’re tools…
Quality restaurants truly respect their key staff members, and would never screw them over with such BS as quoted above.
I understand and agree with waitstaff tipping out to other members of the restaurant that help and support their ability to make that tip. BUT WHAT ABOUT THE RESTAURANT OWNER THAT CHARGES THEIR WAITRESSES A TIP OUT BUT NO ONE ELSE THAT WORKS BEHIND THE SCENES SHARES IN THAT TIPOUT? My daughter works in a restaurant and the tip out is pocketed by the owner or put back into his business. So these staff members actually get to pay the owner to go to work. Am currently searching labour laws to see what can be done
I work at a buffet restaurant in Northern ON. People tip on average if at all only 5%. 10% is common pratice at a buffet. We do not tip out to the supportstaff which I wouldn’t mind.I HAVE TO PAY THE OWNERS 2% OF MY SALES.I do not see how this is legal. I have never got a straight answer to were this money is going. I heard that it went to vacuums and other stuff that they needed..But we sweep the carpet with a broom. I usually end up paying them to work there. Plus I only get paid for 45 minutes after my last table is seated. Sometime I could be there for over an hour not being paid..sweeping carpet is time consuming.
I have not waitressed for too long and just can’t believe how waitresses get treated so unfairly. I wish that waitressing had some type of union so owners would have to smarten and stop taking advantage of their employees.
My son has been working in several restaurants in Vancouver over the past few years. The scenario is now standard – get hired and “trained” for an unspecified period of time during which time owners keep all tips he earns. This amounts to hundreds of dollars. If he complains or starts asking when he will receive tips, he is put off with “you’re not ready” and eventually his hours are cut back so they can hire someone else who will also go through this trial period of no tips. Only a very few of the servers, usually head waiters who are mature actually earn tips. Servers sometimes aren’t allowed to do their own “cash-outs” so they never see how much they are NOT getting tipped. Servers need to be protected from these predatory practices. As tips are not covered under labour laws in BC, they have no recourse but to leave. Even some top restaurants are now part of the problem.
i just got hired in a golf course and they have a fine dining restaurant open to the public, they are paying me 8.9 dollars per hour plus tips how does it works are they centralize tips meaning sharing it to all the staff. can u explain this to me….i’m starting monday, is this worth so how much will i be getting any idea? TY
Tips are protected in BC’s labour laws. In Ontario we are trying to pass Bill 114 to have the same protection. In BC the law says that tips are only for the low wage earners, not management or owners, however I am not sure if this protects workers from hoarding and not sharing the tips with other workers who are earning the server minimum wage. You should call the BC labour board and ask them. But that doesn’t sound right.
This tip out has gotten out of control. Servers should share their tips. I believe it should go right to the people who deserve it and them only. The cooks,bartenter, hostess, and bussers if you have them,and only if these people are doing there job good, not the owners or management period. It should be the servers descretion. Half the time they aren’t even doing a good job your paying them for what? and the server is bustin their ass. This is just a scam for a easy way to rip the server off. It should only be 4% if the server is in a high end restaurant and generally makes a great tip but other than that it should be less than 4 % 2 to 2.5% !!!!
Ask your server when you dine out if she pays for the privelage of working there, through her hard earned tips.
If she even hints at the fact (she may hesitate to nail her boss) get out of there. Ontario is a piece of crap province who’s government only caters to whoever is buying its campaign that week…but you the public can respond by not going to these places. PErsonally, I’m about to expose a restaurant in my hometown, although his tip out theft is legal, I live in a small town, and public opinion will kill him.
The issue is that the tip money is pocketed BY THE OWNER.
I’ve never met a server who had issue with sharing money with the support staff. I know servers who pay nearly 400.00 a month to the owner. If you think this is acceptable, you should get the hell out of Ontario, because you are an ignorant leech of a human being.
Regardless of how many years this has been going on, there needs to be a stop to it now! First off, to correct this article, the current minimum wage for liquor servers in Ontario is $8.90/hr. To everyone working in this industry and taking a cut to our hard earned tips and gratuities, I encourage you to support proposed bill 114.
I will never agree to pay my employer for the privilege to work and will do anything I can to ensure that I, and others in the hospitality industry are protected from doing so. Attack this problem at the root and do so legally. To show your support, sign this petition
To further take action and make a real difference, open a discussion with your employer regarding this wrongful deduction of our income. The E.S.A protects us from termination as a result of requesting such conversations and in fact encourages us to first attempt to solve matters with our employers directly. If you can’t get anywhere there, familiarize yourself with the Employment Standards Act and and if you feel your employer is in violation of the terms, file a claim. Write to your local MP expressing your concerns about house tip out policies and ask for their support on the matter. Alone, our voices are quiet, together, we can make a lot of noise and maybe change the Employment Standards Act to actually protect us from this theft. After all, what good is the E.S.A if it allows some to get wealthy at the expense of others. BE STRONG! HAVE A VOICE! MAKE A DIFFERENCE!
Is tipping out the kitchen/support staff that horrible? They help you make that money. I’m getting sick of the restaurant industry. I’m a barback/bus boy at a popular sports bar. The kitchen and I split 1% of the tips. Which is around $50 each per week, yet our servers and bartenders make around $250-$500 per day in tips.
Its not tipping out the kitchen or the hostess that’s a problem; its tipping out the “house” which is management. I would rather just give the money every night that I give to the “house” to the kitchen or the hostess that helped us run food if we were busy.
I would love to know how much major chain restaurants such as the Keg, Cactus Club, Earl’s etc make per year/restaurant net. My impression is tipping simply subsidizes the wages of the employees allowing the restaurant owners to pocket more. I don’t believe they all run on the low profit margins as the industry keeps saying.
I never knew this until my daughter starting working as a server during university. There are times she is paying out to work especially if she didn’t get the good shifts. SO HOW FAIR IS THAT. She says it is going to other people that she works with but why should she pay them if she gets a bad tip.
i am an 8 year old new waitress. i just started at a resturant where my boss is the cook. its a small resturant and so often nights there is only one wait staff and him in the kitchen. the “kitchen” gets 50 pecent on thoes night. of my (or what ever waitress is working) tips. i cannot find a law to stop this. if theres three wait taff 1/4 of tips (we pool them together then divied evenly) gos to the waitresses and 1/4 goes to the kitchen staff, if only two work then the two wait staff gets 1/3 and the kitchen staff gets 1/3. thats a lot as far as im concerned. i wanted to waitres to use my tips for nights out, lunches, things for me, and save all my pay or most of it for college. but with so much of our tips being taken its impossible. we will never see more then 50% of our own tips, and youll only ever see 50% when your the onlu waitress working. this is wrong. and furthermore, if say im workin and the owners cooking. NO ONE ELSE. he takes half my tip and give it to the dishwasher and other kitchen staff (who happens to be his son) when neiter of them were in the shif that I made thoes tips. why dont i ge tipped out on shifts i dont work if this is how its done. this is wrong!!! i dont know what to do, can anyone suggest help???
Alex, as a high volume nightclub bartender -Im all for tipping out support staff. We would never be able to do what we do withouth the proper support of barbacks and bussers. Tipping out to support staff is so important… What you and many others fail to see- is that when we tip out to “the house”, management/owners often take 1-2% of our tip out for themselves.
So, if we sell 10k in sales, and our tip out is 7% (which is pretty typical) the busser’s pool SHOULD get $700.. This doesnt happen. Busser pool might get $500.. and Mr. Big Boss gets $200 for his wallet. So- We all get screwed.
My son’s girlfriend has been working at Crabby Joe’s in Bellville, ON for well over a year and just recently the establishment was sold to an East Indian couple. The husband of this couple has been demanding 50% of the waitresses tips each shift. I am sure this is illegal and if anyone has any information regarding how much an employer can *legally* take from tips please let me know. I am going to call the Labour Board to check into this.
Its over 2 years since this article was published and its still going on, more then ever. I find it very difficult to accept that an owner of a well established restaurant can take money from the people that make his business successful, up to 4% of there tips!!! I as a server, will not tolerate this. If I have to turn down great paying jobs because of this, I will do so to protect my self respect.
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