How Tips Distribution in Restaurants Might be different (Tip Pooling)

Updated: March 13, 2018. 

There has been no major changes, the process is still ongoing.

House of Democrats offered a bill to protect workers’ tips.

Updated: February 17, 2018. 

Update: The public responses, judging by reading comments is all over the place as the rule will kick in or get opposed, so it is hard to tell what will happen at this point but we will know soon. I will keep this post updated as more news roll as well as final decisions. I wanted to share some comments people shared that will hopefully help you see the opinions people have.

Original Post Starts from Here

If you are working in a restaurant or have worked in the past, you must be aware about how tipping works and how it is distributed. Currently, for waiters is to tip 15 to 20 percent of the pre-tax bill from their tips. Under this new regulation, the tip you leave for your server (who provided you with service) will end up in a pocket of the business owner.  The New Tipping in a Restaurant will bring the system more different for service that are actually serving and dealing with the customers.

As of now, the rule is that the owners of the businesses do not have much control over how tips are distributed.  After doing some research it looks like that The restaurants have been asking for this change for a while now with Obama’s administration but now they have found one that can do this rule for them.

The primary change is that restaurants want to change how tipping works by stabilizing the incomes between kitchen stuff and Servers. They know that kitchen wages start at around $13.50 an hour where tips for servers can actually earn two, three, or even 4 times of that if calculated per hour. The rule will pretty much make the servers share the money with dishwashers and cooks.

What happens when this new Labor Department Rule kick in?

The restaurant owners will have more control over tips and will be able to redirect more money to the kitchen workers. The major kick away I see in this is that owners will now be able to control the tip money and it is only a matter of time where small restaurants will start taking certain percentage out of it for themselves. So, as long as the business owners pay to the kitchen people the minimum wage, the employers could do whatever they want to do with the rest and even just pocket them.

See where I am going with this? You might trust your owner and have developed a great relationship with them but that the owner will take control of them will really cause some outcomes in the long run and distrust will form eventually. Then, the new rule will take effect, it is just a matter of time.

What do servers think about this new rule?

Found some replies from Servers about this change

“The issue that I have with tip pooling is not that I’m sharing the tips,” says former waitress. “It’s that the owner would have control over the tips.”

– Misty Cumbie

“I think in general people assume that the money that they’re leaving is for the server or the person behind the counter,” – Cumbie says. “And definitely not for the owner.”

– Misty Cumbie

This person has worked as both in the kitchen and server and believes that cooks and dishwashers do need a higher pay because they are the motor in the restaurants but this money should not come from the pockets of the servers.

What do I think?

I do agree that kitchen stuff should receive better pay but it should not be taken from servers pockets, there should be another way to do this. The servers are the ones who make the sale and bring the money to the restaurant and yes, cooks make the food. I believe there should be stem set up like Yelp where the kitchen stuff can get reviews on their performance and therefore get bonus. Otherwise, it would be another way for owners to get money.

Bottom Line

I do agree with this new change but I do not agree with the owner taking control over their tips. I worked in a restaurant and do agree that those hard working dishwashers should be getting a better pay based on the establishment and how busy it is of course. Surely as soon as this rule kicks in, we will start seeing stories about the restaurants closing because they did some unethical action.

What do you think about this new New Tipping in a Restaurant change?

The link to the actual page on the Labor Department if you want to read it for yourself.

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Richard Barnett is a student majoring in finance, entrepreneur, marketer, content writer, budget traveler, and financial blog “Student Money Adviser” owner. You can read more about me here.

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