Tips for owners bar tending

[nateo]

I know lots of bar owners who work behind the bar and for the most part they take tips or split tips when appropriate.

I have no doubt some owners do this. My point was just that, depending on how you're "tip splitting" that might be illegal. Lots of people break labor laws all the time. You have to decide for yourself if that's "best practice" or not.

[nateo]

I just read an AP piece about the Starbucks tip case, where Assistant Managers were prohibited from participating in the tip pool with baristas and shift supervisors.

"Judge Victoria Graffeo, in writing the majority decision, said employees who regularly provide direct service to customers "remain tip-pool eligible" even if they have some supervisory responsibility.

"But an employee granted meaningful authority or control over subordinates can no longer be considered similar to waiters and busboys ... and, consequently, is not eligible to participate in a tip pool," she wrote."

Read more here: http://www.kansascity.com/2013/06/26...#storylink=cpy

[mmmatt]

mashpaddled, I would love to see any court cases that says that a manager or owner working as a bartender can't take tips. Please post some links. I believe you are fully misinformed and are confusing tip pool issues with the ability to work and act as a tipped employee.

Matt

***edit*** also in the starbucks article that nateo posted, it says that the shift supervisors were allowed to receive tips because they did a similar job. Not because they weren't owners, or were not financially tied to the company, and not because they didn't have higher levels of responsibility or authority, but because they did much of the same work as the baristas. It isn't because of a job title or a moniker, it is about the work you do, and an owner working behind the bar side by side with a bartender would be considered "doing much of the same work" as the non-owner bartender and would then be eligible for tips for a tip pool.

[nateo]

Matt, you should probably re-read that quote from that judge. As a shift supervisor at Starbucks, you don't have power to hire/fire, you don't have meaningful control over the employees, you can't assign them to different positions, you can't discipline/demote them, etc. As an owner, you can do all of those things. The assistant and store managers at Starbucks can do all of those things, which is why they were excluded from the tip pool.

AFAIK the owner can keep tips they receive directly, (the customer hands them tips directly) but they are not allowed to "split" tips with others. That would constitute an illegal tip pool.

I'm usually not a fan of arguing from authority, but in this case, I'm gonna assume the practicing labor lawyer knows more about the law in this situation.

If you want to set up an illegal tip pool at your business, go nuts, but don't say no one warned you.

[nateo]

I'm not arguing that an owner could not take tips if those tips are not pooled or split with any other employee and if those tips had been earned by any other bartender would not be pooled or split with anybody else.

OK, so if I understand that correctly, of the following scenarios, only #1 is legal, and #2 and #3 are illegal. Right?

1) Owner works as bartender, owner keeps tips given to him directly, all other bartenders keep their own tips with no pooling/splitting.
2) Owner works as bartender, owner keeps tips given to him directly, other bartenders pool/split tips.
3) Owner works as bartender, owner pools/splits tips with other bartenders.

[mmmatt]

OK. Well I will give you guys this much, this is absolutely NOT as simple an issue as I thought it was, because tip pooling is a far broader term than it should be and is now including traditional tip behavior such as splitting and tipping out. I guess we will be seeing much more of these kinds of things coming across the wire as businesses like Starbucks and other counter-retail service places expect tips. That is kind of new really, and not traditional to tip that type of person, so that is why these things are coming up. Those tips are not the volume that waitresses get or bartenders get, and yet the employer is trying to use these tips as a way to justify a lower than minimum wage. This is where "tip pooling" is coming into play. Tip pooling has traditionally been a scenario where after each shift tips are collected and every week total tips are counted and broken down to an hourly value and then paid to employees alongside their hourly under the guise that the hourly plus the tip portion must equal minimum wage and if it doesn't then the employer makes up that difference. None of that rubs me right as someone who has worked in bars and restaurants off and on for 25 years, and although I have heard of this happening in bars I have never (nor would I ever) worked in a place that did this. As a bartender I make more than most because I am a great bartender. Being attentive, and entertaining and providing an enjoyable experience are the keys to making money as a bartender. It is more than making a good drink or puring a pint with the perfect head. To base tips on just the hours a person was standing there is a bunch of crap and doesn't inspire or require bartending skills. That is for counter help, but in true one size fits all law making, it is being used to battle common sense. Ha! Well that's the end of the rant portion!!

The place where all this mess is getting really sticky is in the things that have been going on, without issue for many years. Both "tipping out" to bar or busboy or cooks and "splitting" tips among people sharing a single job are now being called (or in my opinion confused as) tip pooling. I was fully surprised to find these things all being lumped together and was the source of steam for my argument. These things are certainly all different, and hopefully as these issues come and go they will be defined as such.

Here are a few points from an article I found googling. This is from tipcompliance.com and I have no idea of their authority or source on this information, so see it for what it is.

http://www.tipcompliance.com/pollearningcenter.cfm?doc_id=89

Unfortunately the court makes no distinction between Starbuck’s fast paced retail environment and that of a leisurely restaurant with personal service. What about the small retailer whose manager also works the sales counter? Herein lies the most complex issue regarding tip pooling / sharing. This situation is not unlike the restaurant manager who takes a bar shift.


The law favors discretion in such matters, and continues to guide such supervisory staff not to participate in the pool unless their presence in that post is a regular part of their workweek. The incidental shift is viewed more as part of their responsibility to the house, and thus their wages should reflect these recommendations. If business necessity requires that they take such a shift, the remaining staff should either share in the tips or allow the previously defined sharing plan to prevail. In the case where a manager is a full-time counter staff, there still remains a grey area. Can the balance of the staff actually define the pool with or without this manager’s influence, free from fear of reprisals of guilt? Likely not. It is therefore recommended that these staff not participate in the tip pool creation or it’s distribution.

What this is saying is that if you take a scheduled shift you earn tips, but if you jump back behind the bar to help out or to cover a late employee or an absent employee (incidental shift), then you should not take tips. To me this is absolutely logical and fair, and a bold black line instead of the gray area that some see it as. Certainly with all the tip pooling issues that retail counter help is now stiring up, it is not as simple as it seemed to me at first.

To say that no supervisory help can take tips is nonsense and assumes that you have a gm or owner walking around directing traffic at all open hours. The reality is small to medium establishments give those responsibilities to lead bartenders who will be in charge of locking up, cutting staff when business slows, comping voiding and overiding tickets, checking people out when their shift is done to be sure their sidework is complete and often have involvement in employee reviews or money counting or setting banks or ordering and maintaining inventory. The only place I have ever worked where there was a supervisor on at all times that had no other job other than to supervise, was a Bennagans in the 80's. So that is probably more of a corporate thing, but in the other 15 or 20 places I have worked there was a gm or supervisor there during the day, but at night it was the head bartender that ran the restaurant. Maybe it is different in different locations. Certainly if you are rocking a 250 seat brewpub then you could likely justify supervisor at all times, but for most places smaller than that I can't image that is a justifiable expense.

My business model consists of 2 full time people who will have designated shifts as bartenders as well as other duties. One person is going to be brewing with me and will also be a working bar manager. Another is my office manager who will run the back office as well as bartend 3 or 4 shifts a week. One of the 3 of us will always be there to close and will be bartending and earning tips. I understand that there is currently some gray area in these matters but there is no unfair advantage to anything I propose. If anything, the person of authority wiull likely recieve higher tips because customers will know and see them more often. So that other bartender takes advantage of that in the split. If someone tried to challenge any of this in a court of law, it would be easy enough to prove that the person claiming injustice was actually seeking unfair advantage by attempting to be compensated for work they didn't do. Personally I'm not afraid of that type of legal battle because it is nonsense and the laws are not so cut and dry in this regard from what I can see.

[nateo]

If someone tried to challenge any of this in a court of law, it would be easy enough to prove that the person claiming injustice was actually seeking unfair advantage by attempting to be compensated for work they didn't do. Personally I'm not afraid of that type of legal battle because it is nonsense and the laws are not so cut and dry in this regard from what I can see.

That's not really how the legal system works. It's not "you only get in trouble if you break the law in an unjust way," it's "did you break the law or not?"

If you think the laws are unfair, you can write your senator about it. If you think the laws are ambiguous, I don't agree with your assessment, and it doesn't sound like the FLSA does either.

IMO, there's no reason to risk the cost and bad publicity of a trial, or the cost of a fine.

Really, you only have yourself to blame, as an owner, if you can't pay yourself a decent wage without breaking the law. You either need to find a better way to run your business, or don't bother owning your own business in the first place.

[mmmatt]

Really, you only have yourself to blame, as an owner, if you can't pay yourself a decent wage without breaking the law. You either need to find a better way to run your business, or don't bother owning your own business in the first place.

OK. It isn't breaking the law to take tips as an owner. But either way, it is less a concern of my own time behind the bar compared to people of authority behind the bar. I will always have a lead bartender running the show and those people will take tips just like any other bartender does. Somebody NEEDS to be in charge at all times and I can't imagine tap rooms and smaller brewpubs can afford a manager walking around doing nothing else.

Laws are based on words and words are negotiated and reinterpreted and then when appropriate, are used as precedence for the next case. There is no law that says owners can't take tips. There is a precedence that says that owners or "people of authority" can't take tips from a tip pool. The issue with all of this is the clarification of what a tip pool is. Traditionally, tip pooling is not the same as splitting tips or tipping out. Will a court ever make that clarification? Who knows, but to say it couldn't be effectively argued is silly. To say that a bartender, who worked side by side with another person of authority, could then argue in court that they deserve both halves of the tip jar because the other person has authority over them is also silly.

One way to cover oneself in these matters may be a simple questionnaire at hiring time as part of the employee handbook. Throughout what I have been reading on this subject, it keeps coming up that the employee's should make the rules in regards to tip pooling. So If you give a person a questionnaire about tip pooling with these types of scenarios, you can be sure not to put them on shifts where conflict might arise if they disagree with this thought process. I would however be willing to bet that most people would select the answers that show a fairness of equal pay for equal work regardless of a persons authority level.

[Discordia]

Taking tips as an owner is a can of worms, and even if you think you have your arrangment that is ethically fair, you are sure to have an employee that disagrees and good help is hard to find. A possible solution (with its own set of social and financial controversies) is to have an all-included price, and bartenders are paid a flat wage. In this way, any bartender gets a reliable paycheck regardless of who (owner/bartenders) are working beside them. If you are covering for a bartender, the tips essentialy go to you as you aren't forking over 15/hr for that other barkeep.

An all-included price is a dramatic choice that has very large effects on which style of employee and customer you will attract. The Black Star Co-op in Austin TX seems to do pretty well with it, but it definitely feels like a "different sort of place". It may not fly in Milwaukee.

Tip stress is something that can cost you good workers. I was at a restaurant where the managers coveted the service staff's tips and would hint at wanting a tipout if it was a good night. You don't want your managers (or your waitstaff) with that distraction when they are supposed to be memorizing the IBU and OG of your beers. I've turned down a management position because it would be a 7/hr pay cut from being a server (and then tried to open a restaurant where I ended up with 0/hr but that's another story). Furthermore, a tipped system makes the bartender an employee of the customer and not of you, which I'm starting to think is an inappropriate relationship. When I was a server, I would use my kitchen connections to make things better for "my tables", hide shared resources like linens/silverware to use as I see fit, add tables to my section if I felt like I could handle it, compete for good tables with other servers... and I made bank. But all of this is to the detriment of you, the owner.

Tips are the number one most important thing to a server, and anybody who intends on having a FOH needs a manager who can tread that issue in the correct manner.

[mashpaddled]

OK. It isn't breaking the law to take tips as an owner. But either way, it is less a concern of my own time behind the bar compared to people of authority behind the bar. I will always have a lead bartender running the show and those people will take tips just like any other bartender does. Somebody NEEDS to be in charge at all times and I can't imagine tap rooms and smaller brewpubs can afford a manager walking around doing nothing else.

Laws are based on words and words are negotiated and reinterpreted and then when appropriate, are used as precedence for the next case. There is no law that says owners can't take tips. There is a precedence that says that owners or "people of authority" can't take tips from a tip pool. The issue with all of this is the clarification of what a tip pool is. Traditionally, tip pooling is not the same as splitting tips or tipping out. Will a court ever make that clarification? Who knows, but to say it couldn't be effectively argued is silly. To say that a bartender, who worked side by side with another person of authority, could then argue in court that they deserve both halves of the tip jar because the other person has authority over them is also silly.

One way to cover oneself in these matters may be a simple questionnaire at hiring time as part of the employee handbook. Throughout what I have been reading on this subject, it keeps coming up that the employee's should make the rules in regards to tip pooling. So If you give a person a questionnaire about tip pooling with these types of scenarios, you can be sure not to put them on shifts where conflict might arise if they disagree with this thought process. I would however be willing to bet that most people would select the answers that show a fairness of equal pay for equal work regardless of a persons authority level.

You have a strange sense of what the law is and how the law operates.

[d_striker]

I think what clouds this issue is that many people in this thread are talking about a tip pool. A tip pool is such that all gratuities are pooled at the end of the night and tips are then distributed per whatever tip structure is in place. I have worked as a server at a couple different places with tip pools and I am strongly opposed to them. Tip pools penalize top performers and reward low performers.

Here is our situation. Our brew pub is going to operate like a restaurant/bar without a tip pool. We are going to hire a bartender or two and also servers. The bartender is the only one allowed behind the bar pulling taps.

Servers will ring in beer and the bartender will receive a ticket and pour beers/drinks accordingly. Bartenders keep all of their tips from patrons sitting at the bar and are tipped out a percentage of the server’s alcohol sales. This percentage runs anywhere from 2%-5% of alcohol sales in the dozens of restaurants/bars that I have worked at and also managed.

One of the managing partners will also be tending bar 4-5 nights per week. The partner will keep all of their tips from patrons sitting at the bar. I’m conflicted about whether servers should tip out the partner like they would any other bartender.

[nateo]

I’m conflicted about whether servers should tip out the partner like they would any other bartender.

They're not "any other bartender!" They're an owner. You can't make your employees give you their tips. In common language, that's called "stealing" and/or "extortion."

If you want tips, you need to sell your stake in the company, and apply for a job as a bartender.

[ChesterBrew]

My god, the partner has an equity stake, is keeping all of their tips made at the bar, and then gets to take some of the servers' tips?

I wouldn't work for a company where I was expected to give a percentage of my tips to an owner. Most servers get paid well below minimum wage as it is.

[d_striker]

Most servers get paid well below minimum wage as it is.

Most servers I know make $100 on a slow night.

[nateo]

Most servers I know make $100 on a slow night.

Interesting. The waiters that d_striker knows may make $100 on a slow night, Apparently d_striker's friends are near the top 10% of incomes for waiters. The waiters the Bureau of Labor Statistics knows: http://www.bls.gov/oes/current/oes353031.htm make on average $9.95/hr, or $20,710 annually.

Waiters are obviously rolling in dough, which explains the large numbers of BMWs in employee parking behind your neighborhood Applebee's.

In any case, they definitely make enough money that, as an owner, you should violate wage laws by forcing them to tip you out. Why not charge all your employees for the privilege of working for you? What's the point of having power over others if you can't exploit your position for personal gain?

If you want to steal from your employees, there's nothing stopping you, except the law. Don't be surprised when your employees steal from you, too.