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Teo9969
04-01-2016, 08:10 AM
Jersey, to answer your original question:

The employer must make up the difference between hourly+tips and minimum wage if hourly+tips is less than minimum wage. However, this takes place over an entire pay period.

If John works from 4:00 to 10:00 and makes $22 in tips and $13 in hourly, he makes $35 all day or $5.83/hour
The next day he works from 4:00 to 9:00 and makes $39 in tips and $11 hourly, he makes $50 for the day or $10/hour.

Averaged together he makes $85 over 11 hours for $7.72/hour. So the employer would not need to make up anything if he repeated this exact scenario 5 times over a two week period.

Assuming only 75% of the time you're clocked in you are taking care of tables, you would still only need to sell approx. $70/hour and average 13%-15% in tips (depending on tip-out to bus/host/bar/event staff) to make minimum wage and you'd have to do it over and over and over again throughout the pay period.

I could maybe see the problem in a super small town, but overall, there really shouldn't be an issue in any decently populated area for a server to average minimum wage over a 2 week period.

dankrutka
04-01-2016, 08:39 AM
Btw, there is a more recent Freakonomics episode (March 9th) that should be listened to alongside this episode. The No-Tipping Point - Freakonomics Freakonomics (http://freakonomics.com/podcast/danny-meyer/)

This was a very good listen. Unfortunately, I listened to an episode on education too and I was disappointed in their lack of research or perspectives. They generally do great work.

AP
04-01-2016, 10:10 AM
I listened to this one yesterday and I thought it was really good: Preventing Crime for Pennies on the Dollar: A New Freakonomics Radio Episode - Freakonomics Freakonomics (http://freakonomics.com/podcast/preventing-crime-for-pennies-on-the-dollar/)

jerrywall
04-01-2016, 12:13 PM
It wasn't customary until somewhat recently.

Don't know how that industry operated for so long and the workers didn't starve to death until this changed.:p

What do you consider recent? I've tipped when getting haircuts my entire life, so going back 40 years. Depending on the place, many hair stylists are paying booth rental fees or are working primarily for tips.

Uptowner
04-01-2016, 01:22 PM
This was a very good listen. Unfortunately, I listened to an episode on education too and I was disappointed in their lack of research or perspectives. They generally do great work.

As I mentioned in an above post. Pretty much any statistic can be skewed or improperly cross-referenced, taken from a biased sample group, too small of a sample group, etc. Freakonomics just uses these tactics to grab the attention of the user and rattle their cages. I took 2 calc classes, micro and macro economics, and statistics from one professor at university because I liked his style. He would spend entire lectures debunking stats articles from the 2005 Freakonomics book, then explain why they were skewed. I trusted his reaearch, he was Ph.D. Math, statistics, CPA and bar certified.

ctchandler
04-01-2016, 01:28 PM
What do you consider recent? I've tipped when getting haircuts my entire life, so going back 40 years. Depending on the place, many hair stylists are paying booth rental fees or are working primarily for tips.

JerryWall,
I'm glad you mentioned this. I had thought about posting, but decided not to (too lazy I guess). I was tipping in the early 60's and I'm not the exception. I happened to be in California at the time and it was customary and expected for a good haircut and good conversation. That's over 50 years.
C. T.

dankrutka
04-01-2016, 04:22 PM
As I mentioned in an above post. Pretty much any statistic can be skewed or improperly cross-referenced, taken from a biased sample group, too small of a sample group, etc. Freakonomics just uses these tactics to grab the attention of the user and rattle their cages. I took 2 calc classes, micro and macro economics, and statistics from one professor at university because I liked his style. He would spend entire lectures debunking stats articles from the 2005 Freakonomics book, then explain why they were skewed. I trusted his reaearch, he was Ph.D. Math, statistics, CPA and bar certified.

Sure, but on complex economic matters, there is almost always disagreement. Freakonomics often brings on top experts in their field. On the education episode, they didn't bring on any education experts (in particular teacher education experts), but that's the norm for the media.

Jersey Boss
04-07-2016, 05:10 PM
Teo, thank you for your response. I am going to guess that you have experience in this area. One of the questions I posted was have you(collective) ever known a business to supplement a server who after paying the others with tips fell short of minimum wage? How does an owner even know how much a server makes if some tips are cash versus some on plastic? You mention that the server is responsible for also paying the host/hostess, bar keep, event staff. Do these folks also get 2.35 an hour? I am one who believes that at a minimum everyone gets at least min. wage as a floor. While some claim to know folks making 50k as servers I would be willing to wager there are a lot more single moms trying to make it work for them working at Denny's than servers at an upscale steak house making 50k a year.

jerrywall
04-08-2016, 09:04 AM
When I waited tables, they used CC and check receipts to track, and for the tip pool (for the bussers and such). You were "supposed" to also report in your cash tips, but most folks didn't, or under reported, and it was sort of understood. Now, I never had a chance when waiting to make less than minimum wage (in fact, waiting tables in the early 90's was good for 20+ an hour even at a cheap mexican restaurant), but they would have used the reported tips for calculation.

Teo9969
04-08-2016, 10:08 AM
Teo, thank you for your response. I am going to guess that you have experience in this area. One of the questions I posted was have you(collective) ever known a business to supplement a server who after paying the others with tips fell short of minimum wage? How does an owner even know how much a server makes if some tips are cash versus some on plastic? You mention that the server is responsible for also paying the host/hostess, bar keep, event staff. Do these folks also get 2.35 an hour? I am one who believes that at a minimum everyone gets at least min. wage as a floor. While some claim to know folks making 50k as servers I would be willing to wager there are a lot more single moms trying to make it work for them working at Denny's than servers at an upscale steak house making 50k a year.

I have never known such a case to happen...usually if the restaurant is dead enough that you are at risk of making terrible money you get cut early in the shift. Getting cut means you no longer take any tables and you begin to do whatever "closing duties" you might have to be able to clock out and leave. So you have a terrible few hours, but you more than make up for it in your next shift. Additionally, most restaurants know what times of year are busy and what times of year are slower, so they schedule less servers in order to avoid over-staffing. Also, if it does indeed happen, I imagine it's on the employee to bring it to the owner's attention. and it's hard to see a situation in which a server in that position would either say anything or even realize their rights.

A server's wages are determine by their hourly rate + their claimed tips. There is no recourse for an owner to force a server to claim all of their tips, but given the ubiquity of credit cards in today's market, most Point-of-Sale systems keep track of tips and force servers to claim at least what they made on credit card tips. That will generally be enough to bump a server up to $7.25/hour over a 2-week pay period even after tip-out.

Most restaurants don't have event staff, and if they do, nobody working full-time in the Front-of-House is making poverty wages. Most restaurants do have bar/host/bus staff. Bar staff generally also makes $2.13/hour, but they make their own tips, and unlike servers, generally keep all of their tips (i.e. they don't pay a "tip-out"). Bartending is generally the best job to have in a restaurant, and they often make more than any base level management.

Hosts and Bus staff are usually apart of the pool that is called tip-out. Tip-out is a % of sales that every server pays to the pot. Most places this number is between 3% and 5%. If it's higher than 5% it's usually a nicer restaurant. But every restaurant has their version and it ends up generally being in that area. Some make you tip-out on sales+tax some only on pre-tax sales.

So if John sells $500, and he tips out 4%, then he contributes $20 to the tip-out pool. If he averaged 20% on $500 in sales, he walks home with $80. If he averaged 10% tips on $500 he walks home with $30. Either way, he contributes $20 to the pot.

A super-shady business owner could exploit his staff, but on average, that simply doesn't happen. And there are so many restaurant jobs in the world that the average server won't put up with shady business owners.

As to the demographics of the staff in the restaurant industry: The vast majority are non-married, under 40 individuals who are trying to figure out what they're doing with their life. There are career servers, professionals trying to make some extra money on the side, single-parents trying to make ends meet (the latter is usually in the kitchen more than the FOH), and other demographics, sure...but the vast majority (I'd guess over 75%) are young people either in school or who don't know what career path they want to take and they're hanging out in a low-responsibility, incredibly flexible*, reasonably paying job. Most host/bus staff make minimum wage or a little more. Most servers probaby average $9-$14/hour in the OKC market.

*This is the thing that as a server most pains me about the idea of going to a set-wage. I have worked in the industry for 10 years, and you just can't beat the ability to take off whenever you want and still have a job. The downside is you're working when everyone else is not, and you are committed to working most major holidays. But to be able to decide you want to go to the movies tonight and find someone to replace you in a relatively hassle free manner (or potentially be able to say "can I have the night off?" and get a "yes" response) is amazing. You just can't do that as an office manager. You also can't do that if you move to an hourly-wage based system where people start counting on their shifts to make x amount of money. You also can't have an incredible week that enables you to say "screw it...I'm going to Vegas in 2 weeks".

It's a delicate eco-system and more often than not, it works to the "advantage" of the demographic working in the industry. It's far from perfect, but once you get the hang of it and you decide it's for you, the benefits outweight the negatives...ESPECIALLY when you get to the professional level and you're working in upscale environments. It's quite nice to have a $35k/year job where you work 30 hours a week, 44 weeks a year...that's just not going to exist in 10-20 years when we've done away with tipping. It'll be a $40k/year job working 35 hours a week, 48-50 weeks a year. At that point, I'm out, because there's very little upward mobility in the industry.

Urbanized
04-08-2016, 10:40 AM
^^^^^^^
Perfectly described. In these discussions, people who would like to do away with tipping have usually not spent much or any real time in the industry. I also think you will rarely find an experienced server who would agree with the idea of straight wage, no tipping.

jerrywall
04-08-2016, 10:55 AM
The other thing I've seen, for tip pool, minimum wage, and tax reporting, is some restaurants working off of the assumption of 15%. So they'll automatically assume the waiter got 15% of the sales for their tables, and use that to calculate their share of the tip pool and to report. What this means is that if you tip say 10% (or even less), you're not just giving them less money, you could be costing them some of their tip money from other tables.

Teo9969
04-08-2016, 02:15 PM
The other thing I've seen, for tip pool, minimum wage, and tax reporting, is some restaurants working off of the assumption of 15%. So they'll automatically assume the waiter got 15% of the sales for their tables, and use that to calculate their share of the tip pool and to report. What this means is that if you tip say 10% (or even less), you're not just giving them less money, you could be costing them some of their tip money from other tables.

In many casual dining restaurants, paying to wait on a table probably happens at least once every other week, if not more frequently. It's one of many tables, so it's not the end of the world. But it's frustrating. You learn to not care and move on to the next table. You learn pretty quickly that your service only matter marginally and that people are going to tip what they tip regardless of the service you provide. I've given piss poor service to tables and gotten 25%, and I've given amazing service to tables and gotten 8%. What matters more is your ability to make the most out of each night you're there in terms of sales and getting people in your section.

And a bit of info: the "industry standard" (expected tip) is 20%, but the average server probably walks home with 12% to 15% most nights. So the hope is to sell no less than $600. That should land you at least $10/hour.

Jersey Boss
04-08-2016, 03:04 PM
As to the demographics of the staff in the restaurant industry: The vast majority are non-married, under 40 individuals who are trying to figure out what they're doing with their life. There are career servers, professionals trying to make some extra money on the side, single-parents trying to make ends meet (the latter is usually in the kitchen more than the FOH), and other demographics, sure...but the vast majority (I'd guess over 75%) are young people either in school or who don't know what career path they want to take and they're hanging out in a low-responsibility, incredibly flexible*, reasonably paying job.

nm- embed chart will not post. Chart was in this article: http://www.epi.org/publication/waiting-for-change-tipped-minimum-wage/ Charts in article show demo of tipped workers by age , maritial status etc. Also another chart showing gap between service worker min and other workers min. To be clear I am not against tipping but do feel the min. wage should be applied to all workers.

Thomas Vu
04-08-2016, 11:36 PM
And a bit of info: the "industry standard" (expected tip) is 20%, but the average server probably walks home with 12% to 15% most nights. So the hope is to sell no less than $600. That should land you at least $10/hour.

Holy crap I thought average was maybe 15. Guess I'm being average the entire time.

sooner88
04-09-2016, 03:09 AM
I would say, for me at least, that I tip 20% 99% of the time. It would have to take an extraordinarily bad experience to tip less or a huge party or exceptionally great service to go over. 20% is really an automatic reaction and an expectation for me when I eat / go out. (It's also the amount that almost all bars tip out on a walked tab.)

Teo9969
04-09-2016, 08:49 AM
nm- embed chart will not post. Chart was in this article: Twenty-Three Years and Still Waiting for Change: Why It?s Time to Give Tipped Workers the Regular Minimum Wage | Economic Policy Institute (http://www.epi.org/publication/waiting-for-change-tipped-minimum-wage/) Charts in article show demo of tipped workers by age , maritial status etc. Also another chart showing gap between service worker min and other workers min. To be clear I am not against tipping but do feel the min. wage should be applied to all workers.

The problem comes in the massive increase to FOH labor hours that this would cause to many restaurants. I detail this more thoroughly in this thread from November: http://www.okctalk.com/current-events-open-topic/41420-joes-crab-shack-dropping-tips.html

Teo9969
04-09-2016, 08:54 AM
Holy crap I thought average was maybe 15. Guess I'm being average the entire time.

when I say "the average server probably walks home with is 12% to 15%", that's to say that after tip-out, that's what they're making. In terms of average tip received, it usually runs 15% to 18%. Bump that up a little higher for nicer restaurants.

CCOKC
04-09-2016, 11:25 AM
I also tip at least 20% the majority of time with a minimum of $3. We eat breakfast after mass on Sundays with a group of people at Nina's on Portland. The meals are incredibly cheap and our party sits at our table for an hour and a half (not because the service is slow but because like to savor each other's company). The wait staff is attentive and does just as much work as someone who works at a high priced restaurant. They end up getting less pay for the same amount of work and that just makes me feel badly.

dankrutka
04-10-2016, 11:06 AM
^^^^^^^
Perfectly described. In these discussions, people who would like to do away with tipping have usually not spent much or any real time in the industry. I also think you will rarely find an experienced server who would agree with the idea of straight wage, no tipping.

It's not just about the server though. For example, if a restaurant has a busy night then servers' are rewarded why kitchen staff -- who are often highly trained professionals -- reap absolutely no reward from their increased efforts. It's my understanding that a number of states have laws that do not allow those tips to be shared with kitchen staff. Getting rid of tipping also allows restaurants to reassess overall wages to all staff, and at least theoretically (some restaurants are doing it), would not necessarily lower server wages.

But, to be fair, I do not work in the industry. But I would think that there is always give-and-take when it comes to servers determining when to take off and when not to, right?

Teo9969
04-10-2016, 12:05 PM
It's not just about the server though. For example, if a restaurant has a busy night then servers' are rewarded why kitchen staff -- who are often highly trained professionals -- reap absolutely no reward from their increased efforts. It's my understanding that a number of states have laws that do not allow those tips to be shared with kitchen staff. Getting rid of tipping also allows restaurants to reassess overall wages to all staff, and at least theoretically (some restaurants are doing it), would not necessarily lower server wages.

I think in your average restaurant, going to a wage based system probably works out better for the average employee. In most restaurants you have a few servers/bartenders who do quite a bit better than others in the restaurant and that's just how it is. If you go to a wage-based, you can give raises as earned to any staff who earns it, and that will probably fix just about every problem. Whenever this revolution takes hold and sweeps through restaurants, there will be a lot of veteran wait/bar staff that will leave for greener pasteurs (many into new labor markets) because their earning potential is going to sink. Most will take a pay-cut and still be expected to be a stalwart of the service staff. Of course some will adapt, but there are many who stay in the field specifically because certain advantages exist.

One of the reasons for this is because a lot of the servers who do very well in any given restaurant have the regulars who come through and tip absurd amounts of money. There are some people who leave $100 tips on $200 tabs everytime they go out. If those people regularly sit in your section, you make exceedingly more money than the person who is taking care of the average guest. Perhaps those people will continue to tip on top of a service charge, but that's certainly not guaranteed. In high-end dining, this is precisely the reason you have servers in Oklahoma City making $75k/year and up. They're generally not selling $500,000 a year in product all by themselves.


But, to be fair, I do not work in the industry. But I would think that there is always give-and-take when it comes to servers determining when to take off and when not to, right?

It depends on your staff. If the bulk of the staff is good, then it doesn't really matter who is working. So as long as there are enough people working, then it's fine. When I say felixiblity, I don't mean that servers dictate their hours by any stretch...I simply mean that they have a lot of leeway to get out of a shift or take off for a moment on short notice. And when FOH labor is literally an afterthought, that's possible. But that's a lot harder to do when Server H can't pick up Server B's shift on Saturday because Server H already has 35 hours on the week and a 7 hour shift means overtime. If a server worked 80 hours in a week right now that would cost the restaurant a whopping $213.00.