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Nov 20, 2002 09:56 AM

Restaurant owners taking tips from waitstaff

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Just got a very disturbing call from a friend of mine whose niece is a server at an upscale restaurant in downtown NYC. She said the owner demanded half of the young lady's tips for the night. I have never heard of a restaurant owner getting a percentage of the tips. Is this done? Is it legal? Is it ethical? (Doesn't sound like it is). Should my friend's niece complain to someone? (She's not a member of any union).Or should she just quit? Or is this standard operating proceedure? Sorry for all the questions.

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  1. Did she say why it was being taken? Is it to tip the rest of the staff, i.e. bartenders, busboys, etc?

    1 Reply
    1. re: AlanH

      There is not much I can add except to echo the fact that it is illegal, unethical, and not standard practice procedure for a restaurant owner to take any percentage of a servers tips. It is wrong, wrong, wrong, not to mention disgusting. You can bet your bottom dollar that this low-life character has got other shady dealings going on besides skimming tips. It is only my opinion, but if this happened to me, I would quit, report the crook and go find a job with a boss who is honest and fair. A good, fair boss=happy waitstaff which=happy customers which=good $$$ for everyone all around.

    2. I've never worked in NYC, but it sounds bad. NY may or may not have laws against this but I'd ask the rest of the servers if they get the same thing. If he is collecting tips from the staff I'd quit and I'd also give the IRS (state and federal) a call to make sure he's reporting all his income.

      Before assuming this guy is the scum of the world, did she tip out the bartender and bussers? Was she training and didn't tip the trainer? I'm not saying it is the case, but this could be a misunderstanding and the owner wasn't shaking her down. I've seen tribal law enforced before (though never by an owner or manager as where I'm from there would be legal consequences) where a new server whose never worked in a place where the bartenders and bussers get tipped out are strongly encouraged to do what everyone else does. However, the owner, even when working, never gets tipped.

      1. j

        Management/owners taking tips or precentage of the tips is illegal and is not by any stretch of the imagination an accepted practice. Depending on how far she wants to go with it, she should report it or quit. There have been lawsuits against restaurants on this issue. Contact the organization Chinese Staff and Workers Organization for mor information on their campaing against the practice at Chinese banquet halls. There is also a lawsuit against Michael Alexander Entertainment (a high-end service company that providees waiters to Cipriani-catered events) for this same practice. I don't know what the status of the lawsuit is.

        2 Replies
        1. re: JessicaKlonsky

          This has been in the news here in Boston for a while- the practice is referred to as "tip skimming". There have been a few lawsits filed this year but I don't think anything has yet been resolved.

          Suits have been filed against The Seaport Hotel and World Trade Center; the Julian restaurant in the Hotel Meridien in Boston; Compass Group Foodservice (which runs the Henderson House conference center in Weston); Boston Harbor Hotel; the Weston Golf Club in Weston; L'Espalier; Locke-Ober; Morton's of Chicago in the Back Bay, and The Bay Tower Room's banquet facility.

          In some of the suits, it's alleged that some or all of the gratuities tacked on to banquet bills are never passed on to the servers. Instead, the money is used to help pay managers, keeping overhead costs down.

          In others, the servers allege that, at the end of the night, tips left in cash and on credit cards are pooled, with the money divided among servers, bartenders, busboys, food runners, expediters, pretty much everyone on the restaurant food chain (forgive the pun), including some managers, such as maitre d's and floor managers, whose cut can run as high as 25 percent.

          Pretty smarmy, if you ask me. Just a way for restaurants to keep their costs down at the expense of the wait staff's compensation.

          1. re: JessicaKlonsky

            Correction: the group's name is Chinese Staff and Workers Association and they have a website I have posted below. They do a lot of labor organizing in restaurants, and in the garment and construction industries where workers often fall below union radar.


          2. Have her go straight to the local Labor Board and file a complaint. I had to do the same (different circumstances) but I was amazed at the things that I had seen routinely done in quite a few restaurants that I had worked in that are absolutely illegal, such as making a waiter pay for a check if the patrons walk out without paying. I had to do a lot of research and it was a big pain in the ass, but I finally got money that was owed to me, plus extra compensation since I was forced to quit the job.

            She should for sure ask them WHY this was done, and if there is no good reason (doubt that there could be...) she should quit and then pursue compensation for HAVING to quit because of their illegal practices. (Don't know about NY, but in CA you can file an anonymous complaint with the labor board if you desire.) Good luck.

            1. I just got a call from my friend who told me that the restaurant owner told her niece that she took a portion of everyone's tips to get a Christmas gift for the dishwasher. Fine--except the owner never asked the servers if they'd like to particiapte--she just did it--no explanation. My friend's niece will most likely quit--as will some of the other staff. Personally, I don't believe the story. Thanks to everyone on the board for helping.