Restaurant Tips on Tips and Wages

Utah Business Employment Law

One area of concern in regards to labor law that is highly controversial is the minimum wage tip laws across the states. Some states such as Alaska and Washington have laws where a waiter will receive compensation for their work on an hourly basis on top of tips. However, there are many states, Utah included, where if an individual receives a tip, that money is counted toward their hourly rate instead of being what a tip is, a tip. In this article, they argue that making the laws like Washington would decrease labor waiters.

However, that is not the problem, the problem is that there is a discrepancy on where the money is going. Many individuals believe that the tip is going directly to the waiter. That is not the case. The tip is instead going to the restaurant to pay for the hourly wage of the waiter.

So in essence, when someone goes to a restaurant and buys $30 worth of food and adds a $6 dollar tip, all they are doing is paying the wage of the waiter. They are not giving the waiter additional credit for anything extra they have done. That’s the problem, if individuals knew that the tip was going to the restaurant and not the just to the waiter then it wouldn’t be a big deal. It is a big deal though because it is a deceptive practice.

Restaurant-goers think they are making a waiter’s night whereas instead they are just making the restaurant’s night. The tips go into the coffers and pay for everyone’s wages, for the food, the buildings, the management, the owners and the shareholders. The restaurant counts that money as theirs. The waiters every night must report their tips so it can be calculated into their wages. So if someone makes more than minimum wage over a paycheck, then their hourly rate will instead be $2.13 an hour instead of minimum wage.

If a waiter wants a bonus, they are up against getting their minimum wage reduced and hoping that they make enough that week that is over minimum wage. If they don’t reach minimum wage, then the company compensates them to ensure that they are compliant with minimum wage laws. However, the question is, are they really compliant with minimum wage laws? Also, is there an actual employment contract that is enforceable? One problem is that there are low times and high times at a restaurant.

If someone works for an hour and they do not receive a tip, then they get $2.13 an hour. The companies make up the difference though with tips that the receive at later times. The question is though then, when they received only $2.13 for that hour worked with no tips was that legal? Do companies have standards in place to ensure that employers will get compensated for that tip amount if they don’t get paid tips in an hour?

Also what is the contract like between a company and a waiter? How much are they getting paid in the contract compared to how much they actually get paid? There is no definite term in the contract. It all depends on how much the waiter gets in tips minus minimum wage. If the terms aren’t definite on how much one is getting paid is that contract enforceable?

The contract should say you get paid x amount an hour or month or night to be enforceable. If it is contingent on tips, tips which the clients know think they are giving to the waiters and not the restaurant, then it is not a contract between the company and the waiter. When the client pays the waiter, that is a gift from the client to the waiter. The contract is between them and them alone. If I push cash on the table, that is intended for the waiter.

So if the company comes in and takes that money and puts it against my hourly salary, what right do they have to do so? Would this not be considered theft, or embezzlement? What was the intention of the client? To pay the restaurant? They have already paid the restaurant. The restaurant's prices for the food, the drinks, the appetizers should all be included, that is the obligation the client has with the restaurant.

Any additional funds paid are toward the person that served them and the quality of their service. One problem is too, if someone doesn’t tip, then that waiter essentially made no money during that time and will not be compensated for that hour. If companies want to come in and commandeer their employee tips, then they should have full disclosure to their clients on where the tips are going.

People claim that the restaurants wouldn’t survive without this method as mentioned in this article. The thing is though, they shouldn’t be surviving on this method ever. A tip is a tip. If restaurants can’t afford to pay their waiters even minimum wage then they should think about raising their prices on their menu. The fact that they are calculating tips into the overall pay means that they can lean on the tippers to pay the waiters salaries and lower the prices of the menu.

Meaning, that restaurants today aren’t paying their employers, the tippers are. The waiters are in essence, beggars at the mercy of the tippers and most of the time, the tippers don’t even know. Is that ok? Is that fair? Is that how an industry should be run? From that perspective, it actually makes restuarants look greedy and unsympathetic to their employers. From a client’s perspective, they think the waiters are living large. There needs to be full disclosure to clients on where the tip goes if it isn’t going to the waiter so that clients can properly calculate their tips accordingly.

If full disclosure isn’t an option, then tips either need to die and not exist anymore, or they need to somehow go back to what the actual word was originally intended, to tip.

Featured Posts
Recent Posts
Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square