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Jul 18, 2010 09:00 AM

Question about how servers are compensated

Just curious about something. Are servers, in addition to their wages and tips, also compensated on the volume of sales they generate for their restaurant?

For instance, say you had two scenarios faced by a particular server:

1) A couple that doesn't eat much. Their total bill is $50 and they (in a generous mood) tip $50.

2) A couple that's hungrier. Their total bill is $200 and they tip $50.

If the restaurant rewards the server somehow based on the volume of sales, then scenario B would be preferred. If not, I think the server would prefer scenario A since the total compensation is the same with less running around to look after the customers.

Anyone know?

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  1. Most of their compensation is tips, probably 80%-%90%.
    Volume of sales will contribute to the tip total.
    As far as your scenerio A or B, it all averages out in the wash.
    Only a server who had an ownership in the restaurant would benefit from the volume of sales.

    5 Replies
    1. re: monku

      An uncomplicated way of saying that is:

      Restaurants pay servers nothing, as in nothing, EVER, beyond their base "salary" of $2.00 (yes, that's a two!) to $4.60 or so an hour (depends on the rules of the state where you live--all states are different).

      2 x 40 = 80, minus state/fed/social security taxes, comes out to about, oh, 55 bucks for a full-time week of work. (A generous calculation of the higher-end pay rate would be 5 x 40 = 200, minus taxes = roughly 150.)

      Please keep in mind that servers did not invent this system, and it's a regrettable but true fact that the entirety of what we make comes from your tip. (Does anyone have statistics on how many servers can afford to purchase health insurance?)

      1. re: princessinvader

        When I was a server, I would've loved to receive a paycheck for anything above $0.00. It never happened.

        1. re: princessinvader

          In a lot of states it is as bleak as you describe, but in California and some other states (Oregon, Washington, not sure where else) servers get paid the regular minimum wage of about $8/hour, plus tips. So servers make more money than other min wage workers, who do not get tips. I've heard that servers are much better off than line cooks and lots of other restaurant staff here.

          1. re: Nicole

            Oregon's minimum wage is $8.40/hour.

          2. re: princessinvader

            The chain restaurant I managed gave health insurance to anyone who regularly worked 40 hours. Their hourly was $2.10 but many of them worked there just for that reason, and freaked out if you cut their hours.

        2. Surely it would depend on the nature of their employment contract. I'm sure there must be examples where a restaurant employer pays an annual bonus to employees based on profits made, much as employers in other industries do.

          Of course, the volume of sales/profits is only partially related to the actions of the servers and is also due to the actions of other employees (and, one could convincingly argue, more related to those other employees).

          2 Replies
          1. re: Harters

            The vast majority of servers (and workers in general) in the US are at-will employees - there is no contract, actual or implied. While you can't be fired for certain proscribed reasons (like racial, sexual or religious discrimination), you can be fired without notice for no good reason whatsoever, in essence.

            1. re: Harters

              The only instance I can imagine is maybe a sales contest, they'd probably give you a free meal or something as a prize. Your main reward is you don't get fired as long as you follow their rules on pushing whatever it is that day. As Karl says, "at will" employment is the norm here for almost everyone, not just waitstaff. The land of the free and the home of the brave!

            2. In Canada, the majority of the time, restaurants will pay servers their wage, which is usually minimum wage which is between 8 to 13 dollars depending on the province (and a reason why serving in Canada is way more lucrative than serving in the US on average, since people still tip 15% on average).. The servers receive tips from customers, and have to tip out to the other restaurant staff based on their sales, not the tips that they make. For example, if your sales are $1000, and you were tipped an average of 15% by your customers, you might tip out 5% of sales, and walk with 10%, meaning $100. If you had crappy tips that night and great sales, rang out $1000, but only made 10% on average, and you have to still tip out 5% you would only walk out with $50 in cash at the end of the night.

              This is why is sucks when people ring up crazy tabs, and only tip say, $20 because that seems like a really large tip for the server to receive, when their bill was $330.

              Restaurants don't reward volume sales directly, because in general, the higher the ring out, the more tips you walk with. There are often times promotions the restaurant will do to reward servers who focus on what they want to focus on selling, say for a feature wine, or cocktail. There is usually a monetary prize, but it can also be booze, or gift certificates, or even in some cases a trip.

              1 Reply
              1. re: upsidedownorchid

                This is right... The server would almost always prefer option A. If the tip out is 5%, the server would be tipping out $2.50 on option A, and $10 on option B.

                I believe in the United States, servers are also taxed based on their sales as reported by the restaurant. So if someone tips more generously than expected that is a tax free bonus to the server, and if someone chooses not to tip the server gets dinged on both tip out and taxes.

                There may be restaurants that award bonuses to servers based on profits, but I have never seen it. Some do run competitions based on up selling/guest cheque averages. I am willing to bet that a situation where a server is upset with a 100% tip because it drove down his cheque average is pretty rare.

              2. Just curious about something. Are servers, in addition to their wages and tips, also compensated on the volume of sales they generate for their restaurant?

                Probably not in most cases, unless the management decides to hold contests/competitions for the most sales in a category for the evening or sales period, e.g., bottled wine sales or desserts. In such cases, the winner receives a fixed monetary number, i.e. $20, 50 or 100.

                2 Replies
                1. re: fourunder

                  You mean commissions? Probably a very rare practice.

                  1. re: Karl S

                    I think I know the difference between a contest or a commission.....and not as rare a practice (or incentive) as you believe in better restaurants......or even chain restaurants for that matter.

                2. I think a server will always prefer scenario A if it happened reliably. Of course it doesn't, the $50 bill couple will more likely tip $10 or less. In real life a server will prefer higher sales, because it will provide (on average) reliably greater tips, and also because then the restaurant will be more profitable and stay in business, providing greater job security. I don't think any restaurant rewards on volume of sales, other than the better servers get bigger sections and/or shifts at busier times.

                  2 Replies
                  1. re: hsk

                    I don't think any restaurant rewards on volume of sales, other than the better servers get bigger sections and/or shifts at busier times.

                    this. servers who can handle higher volume are rewarded by getting "money shifts"-- such as the busiest and most demanding weekend evening shifts. the higher volume will equal more money for these servers. less competent servers get the tuesday lunch shift, the undesirable section, etc.

                    1. re: soupkitten

                      My servers used to fight over the smoking section, they were the biggest tippers and I had to give it out as a reward to the best of the best. Begging and pleading, I swear. The worst got the lunch shift or maybe Monday night. It really is more of a sales job than anything else, your tips are your commission, and if you hustle you will be OK.