Since the effective date of the new New York state wage regulations in January of 2011, the rules regarding tip sharing in restaurants and hotels have been the subject of much confusion. This article sets out to clarify the new “tip sharing” rules with hopes that you then will not unwittingly violate them.
GENERAL RULE: The new regulations now specify the job categories that are eligible to share tips from the dining room: food service workers only, including waiters, bartenders and bussers, as well as sommeliers and hosts, provided they are not managers or acting as such. Excluded are owners, managers and all office and kitchen staff.
The new rules allow restaurants to dictate both the system and the percentage allocated to each job category. Gratuities can be combined in a pool, to be divided by all the staff members according to a set percentage of allocation or individual servers can collect their own tips and give portions, or shares, to members of their specific team.
The Labor Department requires that employers keep records of tip pools and shares; the records could be examined during investigations undertaken by the department on its own or in response to complaints and the Labor Department can compel a restaurant to pay money owed to employees going back six years. In addition, failure to comply with the rules can make a restaurant vulnerable to a lawsuit, something restaurateurs are especially wary of these days, given how aggressively some lawyers are pursuing these cases.
The way restaurants currently share tips varies widely. Some restaurants spread the wealth by percentage at the end of the night while others assign a number of points to each job, calculate the value of each point depending on the total amount of tips and then distribute the money accordingly.
There are also different ways of including the bar; at some restaurants, bartenders collect their own tips as well as a share of those from the dining room, while at others they do not. And some places have waiters tip others based on a percentage of their sales, rather than their gratuities.
Higher-end, full-service restaurants tend to favor the pooling of tips, because it fosters less disputes over stations and shift assignments, provides an incentive for teamwork and encourages the servers to monitor their own performance.