Restaurant Owners taking a portion of the Tips

[flamesfever]

Originally Posted by Dan02

tipout is based on the amount sold not the actual amount tipped.

I've always assumed that in most restaurants the waitress or waiter serving me got 100% of my tip, which is usually from 15 to 18% of the amount sold. What I am talking about is when you pay by credit card and include the tip on the card, it is probably easier for the establishment to take a percentage of the tip. Whereas if you pay the amount sold by credit card, put "0" in the place for tip, and pay the tip in cash, then it may be easier for the waitress or waiter to keep the whole tip.

Granted there may be some establishments that have a tipout policy in which the tip is pooled and shared among various staff members, e.g. waitress or waiter, busboys, kitchen staff etc. However, I don't believe this is the common case in Calgary.

Also, I seem to recall that, for tax purposes, it is assumed that the server receives 15% of the amount sold as a gratuity, and must include this in their income. Could any of you tax people out there confirm or deny this?

[BlackArcher101]

Originally Posted by Brick

They have labor laws in Alberta now?

huh ?

[burnin_vernon]

The restaurant I quit from 3 years ago (and almost any other restaurant I know of) works like this...

You tip out a percentage of nightly sales (4% for me) and it is collected and spread out to kitchen staff, bartenders, etc.. every month.

The managers at my job collected on this tip-out which I believe was total BS and I would love to see any employers get busted for this.

As for declaring tips come tax time, one could declare only tips received via debit/credit card as they are the only proof of gratuities. The government could never find out if someone gave me $20 cash.

[driveway]

As a manager at a restaurant, here's my take on it.

Restaurant Owners collecting portions of tip-out is complete BS, UNLESS the owners are in there busting their humps along with everyone else, in which case it's slightly reasonable, although pretty lame.

If the owners are just taking money out of the tip-pool without doing anything on the floor they are loser idiots who deserve to lose their business, which they will probably do, because they are making it more difficult to attract and keep good staff. I don't know of any servers who would stand for that kind of behavior. It's not standard, it's not appropriate, your friend should make a scene and quit.

Being a good server is hard work, it requires a startling amount of specific knowledge, good personal skills, not to mention work ethic and energy. It's a difficult job that deserves to be reasonably well compensated, and tipping is the system we've arrived at here in North America to achieve that. Would it be better to simply pay servers what they are worth and do away with tipping? Probably, but unfortunately no restaurant can afford to do that because people simply won't pay that much for food, even if they are willing to leave that money sitting on the table in the form of a tip. Why is that the case, I don't know, but it is.

[burnin_vernon]

Originally Posted by driveway

As a manager at a restaurant, here's my take on it.

Restaurant Owners collecting portions of tip-out is complete BS, UNLESS the owners are in there busting their humps along with everyone else, in which case it's slightly reasonable, although pretty lame.

If the owners are just taking money out of the tip-pool without doing anything on the floor they are loser idiots who deserve to lose their business, which they will probably do, because they are making it more difficult to attract and keep good staff. I don't know of any servers who would stand for that kind of behavior. It's not standard, it's not appropriate, your friend should make a scene and quit.

There were rumors at our restaurant that the owners collected tip-out. The owners there were millionaires whom we would see maybe 3 times a year. (They wouldn't even appear at the staff Christmas party). Only a few of us had heard this rumor and if it was true and everybody found out about it, I would predict some ugliness.

But as a manager, do you collect tip-out as well?

[FlamesFanInOilCountry]

Originally Posted by burnin_vernon

There were rumors at our restaurant that the owners collected tip-out. The owners there were millionaires whom we would see maybe 3 times a year. (They wouldn't even appear at the staff Christmas party). Only a few of us had heard this rumor and if it was true and everybody found out about it, I would predict some ugliness.

But as a manager, do you collect tip-out as well?

I'm also a restaurant manager. As far as the legality of tips, this is how I understand it...

Tips are protected by Alberta Employement Standards to a degree, I tried to find this legislation on their website, but I haven't been able to, yet. Managers are permitted to receive tips, but only on an equal or lesser scale as the other employees that receive it. So, the way most places conduct their tips are:

-Customer tips at table
-Server closes table off in computer and keeps tip
-Server runs cash out and regardless of how much they received in total tips they have to tip out a percentage of their total sales/ringout. Example being: 4% tip out rate on $1000 in sales would be $40 to tipout.
-This amount goes into a tip pool which is tallied up over a 2 week period.
-Staff that are eligible for tips (Cooks, Hostesses & bartenders) then receive a breakdown of this based on how many hours they have worked. Example being $1000 cash taken in for tips with 1000 hours being worked inbetween these areas would be $1/hr for tip pool. If person a worked 80 hours over two weeks, it would $80 cash over 2 weeks. (They amounts vary depending on sales volume and other variables).
-So a manager could receive a share within this, thus making them another componenet. So managers cannot claim an entire percentage of a tipout unless it was 25% managers, 25% hostesses, 25% kitchen, 25% bar; however if the kitchen was getting a larger component, they could, as well. Example... Kitchen 40%, Managers, 40%, Bar 10%, Hostess 10%.

Important things to note:
-Tips, just like actual wages cannot be withdrawn for an employee to cover: dine and dash; dish breakage; faulty or defficient product. Example, employee breaks a glass and then loses their tips to cover this, this is illegal.
-Tips can be withdrawn for documented behavioral issues, such as lateness or improper conduct. Example, employee shows up late for work, they lose their tips. Employee is a bartender and does not follow recipe standards takes too long etc, can warned and have their tips forfieted.

Just to clarify I do not receive tips or a share in tips, neither do any of my shift supervisors, we find that this is unethical and can be a foreshadow to clouding your judgement. Also, many businesses do not practice ethical procedures in the areas of tips and it is incredibly hard to prove it and to report it to big brother, especially because of the "voluntary" nature of tips and tipout.

Hope this helps, I will keep looking for that legislation, though.

[jolinar of malkshor]

Originally Posted by 7uongo

Psycnet, her friend cant quit as they've sponsored her with a work visa. The work visa only allows you to stay in Canada while exclusively working for that employer

She could find a new employer and get a new work permit for that employer.

[killer_carlson]

She's in a tough spot re the Work Permit.

I see this situation a lot at the pro bono clinic I volunteer at - low skill workers getting hosed with the prospect of replacement employment being low.

How is her english? Are the employers family friends from the old country?

[driveway]

Originally Posted by burnin_vernon

But as a manager, do you collect tip-out as well?

Shifts where I work the floor as a server I take a full share of tips. Shifts where I do paperwork, I don't take any tips.

We're a small place, certainly smaller than the situation FlamesFanInOilCountry describes, and we do our tips a little different.

[BlackArcher101]

Originally Posted by FlamesFanInOilCountry

I'm also a restaurant manager. As far as the legality of tips, this is how I understand it...

Tips are protected by Alberta Employement Standards to a degree, I tried to find this legislation on their website, but I haven't been able to, yet. Managers are permitted to receive tips, but only on an equal or lesser scale as the other employees that receive it. So, the way most places conduct their tips are:

Let me know when you find it, because AFAIK, tips are not included in the coverage of wages and earnings in the Emplyoment Standards. I have a friend in the restaurant biz that states he could get away with the tip out practice in this thread due to the lack of standards, but it's more of an industry standard of practice to do it the "right way". Legally, I think there is only a leg to stand on if there was an agreement when hired that tips were handled a certain way and it is changed without acceptance by all staff.

1(1) (j) “earnings” means wages, overtime pay, vacation pay, general holiday pay and termination pay;

1(1) (x) “wages” includes salary, pay, money paid for time off instead of overtime pay, commission or remuneration for work, however calculated, but does not include
(i) overtime pay, vacation pay, general holiday pay and termination pay, (ii) a payment made as a gift or bonus that is dependent on the discretion of an employer and that is not related to hours of work, production or efficiency,
(iii) expenses or an allowance provided instead of expenses, or
(iv) tips or other gratuities;

[cSpooge]

Originally Posted by burnin_vernon

The restaurant I quit from 3 years ago (and almost any other restaurant I know of) works like this...

You tip out a percentage of nightly sales (4% for me) and it is collected and spread out to kitchen staff, bartenders, etc.. every month.

The managers at my job collected on this tip-out which I believe was total BS and I would love to see any employers get busted for this.

As for declaring tips come tax time, one could declare only tips received via debit/credit card as they are the only proof of gratuities. The government could never find out if someone gave me $20 cash.

you'd be surprised what the CRA can prove. A couple years ago they went and audited the casinos in the city and were able to prove the amount of cash tips people were receiving.

[GGG]

Originally Posted by cSpooge

you'd be surprised what the CRA can prove. A couple years ago they went and audited the casinos in the city and were able to prove the amount of cash tips people were receiving.

The thing with the CRA is that they don't need as much "PROOF" as they a police officer were. In talking to a few people who have been audited for tips they say that the average person in your position would make X in tips and you didn't report that much so you can pay this or we are going to get into a detailed audit. Most people at this point pay because it is a better deal then fighting.

[Nage Waza]

I know some provinces charge a percentage of their income as tips. I think Quebec may increase a waiter's income by five to ten percent to cover their tips. I don't remember that well, since I now live in Alberta.

[Hi-Psi]

Originally Posted by Hack&Lube

This is another reason why I don't like the tip system. I don't like it in our culture. You don't tip in Europe. There is no haggling or scamming or confusion about gratuities and fluctuating tip amounts due to size of party, etc.

I've been through almost every country in Europe and a lot of the time tipping is included in a service tax that most don't even know about. On top of that, the service in Europe is horrible almost everywhere you go.
In a perfect world, everyone would do their job properly and to the best of their ability without wanting tips but unfortunately this isn't true and in societies where tipping isn't common, neither is good service.

[driveway]

Originally Posted by Hi-Psi

I've been through almost every country in Europe and a lot of the time tipping is included in a service tax that most don't even know about. On top of that, the service in Europe is horrible almost everywhere you go.
In a perfect world, everyone would be paid appropriatelyand wouldn't require tips to supplement their income but unfortunately this isn't true and in societies where tipping isn't common, neither is good service.

fixed

[GGG]

I think the arguement that tipping makes service better is false. I find service to be related to the un-employment rate. Being able to fire poor employees greatly improves service far morer so then some expected incentive. Quality service personel get better tips because they perform their job well. Not the other way around.

This is the same perverted logic that gives CEO millions of dollars in bonus's to ensure that they get performance out of the company and when performance is poor they still expect a bonus to be paid.

[FlamesAddiction]

I know other people who have had this happen to them. In fact, my sister worked in one where they used to keep 100% of the tips from staff that were not family.

[7uongo]

Thanks everyone for your input.

getting another workvisa as jolinar has suggested is easier said than done. There is a cost to the employer for a sponsorship and it includes some paperwork. Most employers dread having to do this

sorry bertuzzi, I wont say if it is or isnt, but i will say that the whole restaurant staff was hired based on a specific ethnic background. Because of this and how close knit their ethnic community is, she's afraid of the backlash from not only the employers but from the community as well. Unfortunately, most people tend to believe the story from a somebody (the employer) than a nobody

her english is alright. she could have a normal conversation as long as heavy slang and complicated words arent used. she met her employers here in Calgary, and they arent family/friends.

She wont be sent back if she quits. She could get a visitor's visa and still stay in Canada. However in order to eat and pay the bills, you have to have income and it's finding work that's the problem.

We're still undecided on whether something would be done about this. The ultimate decision is on her part, so we'll have to see.

I like the idea of having a CP blacklist of restaurants where we could identify Calgary restaurants with shady practices and awful dining experiences

[7uongo]

Originally Posted by ken0042

I feel for that person; having a 1st generation Canadian fiancee I have extended family who gets exploited a bit by various employers. But it would be worse if she gets sent home to make $5 per day because she made a stink about it.

Originally Posted by flamesaddiction

I know other people who have had this happen to them. In fact, my sister worked in one where they used to keep 100% of the tips from staff that were not family.

did your friends and family do anything about it?

[jolinar of malkshor]

Originally Posted by 7uongo

Thanks everyone for your input.

getting another workvisa as jolinar has suggested is easier said than done. There is a cost to the employer for a sponsorship and it includes some paperwork. Most employers dread having to do this

Actually there is no cost for the emplyer to apply for her to work for her. The easy part has already been done by her getting here. The new employer would not have to worry about transportation costs to Canada. There is no cost for a Labour Market Opinion application. There are more employers out there than not who know how to get this done now a days. In fact, there are probably a few employers who have open LMO's who can put her name into one of the empty positions. The only cost would be to your friend who would have to apply for a new work permit.

Your friend should know that she is not obligated to work for any specific employer especially since she is being mistreated. She just needs to make sure she does the proper paperwork for a new employer.

She wont be sent back if she quits. She could get a visitor's visa and still stay in Canada. However in order to eat and pay the bills, you have to have income and it's finding work that's the problem.

If she quits she would not have to get a "visitor visa". She can remain in Canada on the status that she currently has until it expires.