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Talking Points on Tip Pooling Proposed Regulation

About the Regulation

  • The proposed rule from DOL on tip regulations would reverse an Obama-era rule that prohibited employers from setting up tip-pooling arrangements that include employees who are not customarily tipped, such as back-of-the-house staff.
  • The rule from DOL only applies to employers who don’t take a tip credit – these servers are already making at least the minimum wage in addition to their tips.
  • Confining tips to just servers creates a disparity between them and those in the back of the house washing dishes and preparing the meal. They’re all working towards the same goal.

General Talking Points for Restaurant Operators

  • I am a restaurant operator and I support the U.S. Department of Labor’s proposal to once again allow tip pools that include kitchen staff, particularly dishwashers and cooks, ONLY for restaurants that do not take a tip credit and pay all individuals cash wages of at least the full minimum wage.
  • I do not support managers and non-hourly staff sharing in tips. This has never been an issue in the litigation or prior to the Obama regulation now being withdrawn.  It is a red herring from those trying to continue prohibiting kitchen staff from being part of a tip pool.

Restaurant Operators Rationale for Support

  • In my experience, non-managerial kitchen workers earn significantly less per hour than dining room employees such as servers or bartenders when one considers tips.
  • Allowing kitchen staff to participate in a tip pool will help to close the gap in pay between the front of the house and the back of the house.
  • The jobs that kitchen staff perform are no less important to the customer’s overall dining experience than are the tasks performed in the dining room. If the food is the wrong temperature, the plating is unattractive, the courses arrive in the wrong sequence, the plates or glassware are not spotless, and so on, the customer’s experience suffers, and tips decline accordingly.
  • If the kitchen prepares the food well and on time, this augments the customer’s experience, leading to higher tips.
  • Allowing kitchen workers a chance to receive a share of the tips they help to generate will encourage more teamwork and cooperation among the dining room and kitchen staff, incentivize kitchen staff to perform better, improve the customer experience, and ultimately generate higher levels of tips, which benefits employees in the front and back of the house.

Author: MRA
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