The Restaurant thread - greedy profit monger owners

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  1. GA Anderson profile image91
    GA Andersonposted 10 years ago

    A  recent ACA thread had several "restaurant operations responses. As a follow-up, and to pose the question:

    Is paying "tipped" positions, (ie. servers and busers),  a "less than minimum wage"  rate,  greedy and uncaring?

    Caveat: There are a lot of bad mangers/owners/restaurants out there. The discussion is not about them - but the concept of paying less then minimum wage.

    As a former independent  owner/operator of a two-shop restaurant "chain/conglomerate" - I honestly believe I was not being greedy paying tipped positions  approx. $2.35 p/hr.

    Because - at the end of the day - my servers averaged more than double minimum wage.

    And, my busers were typically 15-17 year-old school kids that were glad to have a part-time job, plus, when "tipped-out" from the servers they serviced - they made at least minimum wage.

    The facts of life...
    No matter what the "socialist/Kum bah Yah" respondents think - restauranteurs are in business to make money - and paying a "living wage" is just not feasible - if they want to stay in business.

    To my credit, (I think) *Note - I was "on-premise" 90% of operating hours
    I did everything possible  to ensure my servers were happily making money, ie. flexible schedules, rotating sections, equitable seating.

    My hostesses and busers were school kids - I was glad they worked for me and could make some money - but, my servers were #1 priority

    Yes, I paid less than minimum wage.
    Yes, there were "cut " hours when servers/busers had to go off the clock
    Yes, I did hire/maintain as many part-time positions as I could.
    ps. only cooks were full-time, but no benefits

    No, servers were not forced or threatened when they needed time off
    Yes, I worked as a server/buser/cook when needed to fill a hole.

    That is the real restaurant industry as I see it...

    Am I wrong?
    Am I a greedy profit-mongering owner that uses and abuses his workers?

    The restaurant industry is a good example of why government mandates are wrong for society as a whole.

    What say you?


    1. Josak profile image60
      Josakposted 10 years agoin reply to this

      I am a socialist and this seems fine to me... As long as everyone ends up making at least minimum wage it doesn't really matter how.

      On the other hand mandates on business are by and large not something I have a problem with.

      It depends on what you mean by "cut hours" there are two possible definitions in common parlance but making people work off the clock IS wrong. Other than that though it's neither right nor wrong it's just a business.

      1. GA Anderson profile image91
        GA Andersonposted 10 years agoin reply to this

        "cut" hours means it is a slack time at the restaurant and workers are taken "off the clock"
        In my operations - they NEVER had to work when they were off the clock.
        this is a touchy topic - I put myself in their shoes and thought - "I'm here, now I have to sit around for a couple hours until they need me again?"

        Unfortunately, that is the nature of the business. I tired to schedule as little "cut" time as I could - but it is a part of the business.

        you really should qualify your "ok-ness" with business regulations with real-life situations. Sort of a "walk-a-mile" in their shoes perspective.


        1. wilderness profile image94
          wildernessposted 10 years agoin reply to this

          While I would have no trouble with the tips, the "cut time" does border on abuse, in my opinion.

          To my mind, if an employee is required to be on site they need paid and at least in some instances I've run into this it has turned out to be the law as well.  If the employee is allowed to come and go as they please when the shift ends early, that's fine.

          At the same time, I won't work for long when the shift often ends early for lack of business (work).  I won't go in for less than 3 hours to start with, and if there are many days at all when that's what I get, well, there are other jobs out there.  If you can find employees that are happy with that then fine, but I doubt you'll find many good ones.

          1. GA Anderson profile image91
            GA Andersonposted 10 years agoin reply to this

            As an owner/operator - "cut" time was a problem for me too. In my case, it applied to leaving early - not sitting around until needed again.

            There were "occasional" 2 - 3 hour "cut" times because of need, but that was not the standard practice.
            To expect an employee to just clock-in and out when needed, (as a routine thing), is crazy, and very poor management.

            But there is a flip-side. It was also a way to "reward" good servers. They knew they were not making much doing slow times - so they were glad to get to leave early.


            1. wilderness profile image94
              wildernessposted 10 years agoin reply to this

              Speaking just for myself, that makes it palatable. 

              At least if I don't need a full time job or if it happens but very seldom.  I would not view being sent home with no income to be a reward - I don't work by choice but by need, and being sent home early means I lose income while still incurring any costs of coming to work.

        2. Josak profile image60
          Josakposted 10 years agoin reply to this

          Interesting, I run a business in a very different industry, back in the day before things got really busy as the business got more clients I had a cut time agreement with my staff they would stick around within a couple of square blocks while I had nothing going on so I could call them when I needed them and they would receive half their hourly wage for that time as a bonus at the end of the week, maybe a little more if they had to wait for long, I think that is a fair solution and no one seemed to mind, they would just go to a cafe near by, usually I only had to make one call to get everyone back.
          I don't know how viable that is in the restaurant business.

          I have never had a problem with government regulation and all the ones I am aware of I have always found to be very reasonable, people working need to have rights and a way to protect them.

    2. Credence2 profile image78
      Credence2posted 10 years agoin reply to this

      GA, happy Thanksgiving. I do not have the first hand knowledge that you obviously have of that industry. I have gleaned enough from television to know that financial resources needed to maintain viable does not fall like manna from heaven. If I were a teen, I would appreciate the opportunity to make money even though it is not a 'living wage'. As an adult, my expectations are different and would require that I train for another line of work if I wanted to make more.

      GA, I will defer to your expertise one this one

      1. GA Anderson profile image91
        GA Andersonposted 10 years agoin reply to this

        Greetings Cred,

        Your last statement pretty much describes the restaurant labor force. It is very transient.

        Good servers get better, earn more, and move upward - usually into management.

        Mediocre servers are always struggling - even paying them minimum wage would not help. They are what they are for reasons other than not being good at serving food. I don't think many people grow-up aspiring to be food servers.


    3. That Grrl profile image73
      That Grrlposted 10 years agoin reply to this

      My family are all in their own small businesses, except for one sister. I know a business is there to make money and I know how difficult that can be with insurance, government, etc.

      However, paying a living wage to your staff should be something you do. Why does being a restaurant some how make that business in particular exempt? My sister runs an entertainment complex and pays her staff the minimum wage here ($10 per hour). Food service is part of her business but she does not pay her staff less because they happen to be serving food.

      If I am paying to eat out somewhere I don't think I should be expected to pay part of the staff's wages. That should be the business owner, just as it would be for any other business.

      Wait staff should have a living wage. It really is one of the weirdest things in our culture that the people who serve your food do not get paid minimum wage. The government needs to change this. It won't come from business/ restaurant owners who don't really want the change. (Who can blame them? Would you want to pay someone double if you didn't have to?)

    4. livewithrichard profile image74
      livewithrichardposted 10 years agoin reply to this

      For the most part, I agree with you... I have a brother in his mid 30's that has been a server since he was 18 and some weeks he earns more than I do, and I average 6 figures annually.  He get's paid daily when he serves.  Not sure what his actual hourly rate is but I know it is way under minimum wage.  He works for a 'concept' type restaurant that gets high daily traffic and I've seen him with $500 days.  I've also seen him with $30 days but weekly averages high.  I'm pretty sure he has to report is nightly earnings as well.  I can't say I'm familiar with how the income reporting works in a restaurant but that seems to be right.

      As for non servers, I guess it depends on the restaurant policy for tipping out.  My very first job that I actually interviewed for was as a dishwasher when I was 15.  I was also required to bus tables when things were busy and I would get tipped out by the servers but that didn't happen.  I only worked there for 2 days because the owner was a real b*tch.  On my 2nd day, none of the bussers or dishwashers showed and I was the only one there besides the cooks.  I had to do it all with no help even from the servers.  Some dishes stacked up and fell over and the owner said she was docking it from my pay. I told her I wasn't paying for that she said I was, I tossed my apron to her and quit, she said I couldn't walk out it was their busiest night, I said she should have thought about that before treating me like her personal slave...  Never again worked at a restaurant. 

      I think it is okay for adults to enter into those less than minimum wage agreements but teens (non servers) should be paid minimum wage no matter what and if the servers decide to tip out it should be reported as income as well.

  2. tsadjatko profile image66
    tsadjatkoposted 10 years ago

    I think you should give them a choice:
    1) A higher hourly wage and they forfeit their tips or
    2) Minimum wage and a percentage of their tips or
    3) $2.35/hour plus all tips.

    Why not? - the details could be worked out.

    1. GA Anderson profile image91
      GA Andersonposted 10 years agoin reply to this

      Not sarcastically speaking - you need more perspective on the restaurant business.

      1. is not viable - customers are going to tip
      2. why a percentage of tips? Who gets the rest - the owners?
      3. yep, that's how it works.


      1. tsadjatko profile image66
        tsadjatkoposted 10 years agoin reply to this

        1) not viable? Why not? Customers can still tip, just goes to company. Tips are left on table or on credit card and collected by management. If you can't trust your waitreses who choose this option to not keep the tips you can't trust them to serve customers are run the register honestly either.
        2) Of course the owner get's the rest. They get a percenage because minimum wage is not a high enough salary for this job or you won't have any waitresses.
        3) you asked for suggestions - yet you want the status quo? It would work the other ways too - choice is the difference and all appproaches are allready in use at different businesses so we aren't inventing the wheel here.

        1. GA Anderson profile image91
          GA Andersonposted 10 years agoin reply to this

          1. in my experience - from both sides of the table - customers are tipping the server, not the company. I don't think the customer would be happy with that idea.

          2. again - it is my opinion that tips are for servers - owners should not be involved as a recipient.

          3. welllll.... no I did not ask for suggestions. Not that they aren't welcome, what I did was start a discussion thread.

          3.b I have answered based on my experience and inclinations - I did not say your suggestions were unworkable for anyone, anywhere - I just said I didn't see them as viable options.


  3. sen.sush23 profile image61
    sen.sush23posted 10 years ago

    I must first of all say that I do not have an in-depth understanding of the restaurant business. But in my country, in smaller restaurants I notice occasionally there are systems where the tip is shared. If the staff are offered something over the minimum salary and asked to deposit the tips in a joint fund, which must of course be accounted for very well and a provision made that equal percentage of the deposit per year be shared between all of them. If you have an understanding with the staff, you can take your equal share- that would eventually compensate you for the minimum wage doled out. This would still keep some additional amount in the account, earned as interest on the money deposited which will become an ever growing nest egg for the same staff or if necessary for the restaurant as a whole.

    You may offer that the staff can draw a loan from this account in case of an emergency, if they have worked more that six months in your restaurant - provided they pay back in a stipulated time, and with interest somewhat less than market rates. However total withdrawal must never be more than 55-60% of the value of the fund.

    Why I propose this? Tips are not paid entirely as a measure of the good service- sometimes it depends on the mood and the ability of the patron. A genuine and hard working staff should not suffer the consequences of an erratic tantrum of a patron. By sharing tip, you take care of that and you also rule out the question of the lean hours. To keep your staff motivated and stick out with the job you have the once a year or once in six-month bonus to pay them (out of the fund). Peer pressure will keep also the staff on their toes, to put forward good service and request better tips.

    Will this be a viable solution?

    1. GA Anderson profile image91
      GA Andersonposted 10 years agoin reply to this

      This may work... somewhere, sometime, some situations - but I have never seen it in action, and cannot imagine the convoluted effort to make it work.

      1. I do not believe a restaurant operator has any business being involved in a server's tips.
      2. This, I know from experience - pooled tips upset good servers, ie. they think, "why should a bad server get a piece of money I worked for?"
      3. Servers/tipped employees are a very transient group - they may think forward to next week, but end-of-the-year thinking/planning - no

      My opinion is that an owner/operator that uses a pooled tip system is not paying proper wage rates to some positions.

      *caveat: there are some small shop, lunch counter, and family-type groups of employees, where I could see a pooled system as acceptable - IF it is initiated by the employees. My first sandwich shop was like that. We only had a lunch counter, and everyone did every job. AND, everyone was at least minimum wage!


  4. tussin profile image56
    tussinposted 10 years ago

    All I have to say about restaruants and restaruant owners is Thank God I Can Cook For Myself.

    1. tsadjatko profile image66
      tsadjatkoposted 10 years agoin reply to this

      Ditto on that!

  5. Stacie L profile image87
    Stacie Lposted 10 years ago

    I have discussed this problem of people in the service industry relying on tips for a living and it's based on some archaic laws. Why should the customers pay their wages? Why can't the owners pay minimum wages;maybe pay for each table they wait on?I know the wait staff clean and cook in many establishments when it's slow.
    Whatever the customers give would be a nice bonus.
    The cities give a much better tip than those in the rural areas. The waitresses and waiters starve n the country restaurants.
    Hoping all have a nice Thanksgiving Day.

    1. profile image0
      JaxsonRaineposted 10 years agoin reply to this

      1 - If a server doesn't make minimum wage for a shift between their hourly pay and tips, the owner has to make up the difference.

      2 - Whether the customer pays a tip, or the server earns a flat wage, the customer still pays the wages. You have to understand that about business. The customer is always the one paying the wages. If a restaurant eliminated tips, they would have to increase their prices in order to be able to pay their employees more.

      I worked for a nice restaurant that payed me minimum wage plus tips. I averaged $20/hr, not too bad for a college student. The company had a 4% profit margin. So, if I sold $800 in food, I would likely be tipped around $150. The company only made $32 on that $800 worth of food, so how could they afford to pay me the difference? Customers ALWAYS pay for ALL the expenses of any business.

      I love the concept of tipping. It promotes better service because a good server can increase their compensation just by being more attentive, knowledgeable, polite, and happy.

  6. WriteAngled profile image76
    WriteAngledposted 10 years ago

    I find tipping extremely demeaning, both to the tipper and the tipped.

    I also believe the concept of tipping is used to justify paying exploitative wages. If a restaurant cannot pay staff a living wage, then I consider it has no right to exist.

    Tipping is inherently unfair. People working behind the scenes, washing up, cleaning, cooking, do not benefit. Likewise, a restaurant patron will tip on the basis of his or her general level of satisfaction. This will be affected by food quality, waiting times, general ambience and probably numerous other factors, not just by the competence or otherwise of the waiter/waitress.

    The existence of tipping can create an extremely unpleasant atmosphere with exaggerated expressions of servility by waiters, as well as aggression if the tip does meet expectations.

    Although do enjoy eating out in principle, the tipping process spoils my enjoyment to a significant degree. I only eat out a couple of times a year now, mainly when I am invited out by my daughter or am reciprocating the invitation.

    Where I lived a couple of decades ago, there was a fabulous restaurant run on the cooperative principle. It was owned in common by all who worked there and everyone got exactly the same (living) wage. Tips were shared equally between all workers. The atmosphere there was fabulous, the food even more so, and prices were lower than in many other local restaurants. If more such places existed, I would eat out far more often.

    1. GA Anderson profile image91
      GA Andersonposted 10 years agoin reply to this

      We are at such polar opposites here... any response from me would be futile.

      I can do nothing more than acknowledge the sincerity of your response.


      1. tussin profile image56
        tussinposted 10 years agoin reply to this

        Okay, what do you want to hear? That everyone just loves tipping? That they think it's the best system ever and so fair to the customer and server? That the pressure of being directly responsible for a person's take-home wages makes the dining experience more enjoyable?  That having to ass-kiss rude customers because you survive on tips is so rewarding?

        Yeah, the tipping system certainly is great for restaurant owners.  Pay your waitstaff next to nothing and let them guilt the customers into paying the bulk of their wages.

        Of course my view is such a polar opposite to yours that any response would be futile.

    2. profile image0
      JaxsonRaineposted 10 years agoin reply to this

      Restaurants could get away without tips, but they would have to directly pay their servers more, which means they would have to charge you more.

      Also, EVERY server in America earns at least minimum wage every shift.

      1. Josak profile image60
        Josakposted 10 years agoin reply to this

        I agree with your point but it is well worth pointing out that people getting illegally paid less than minimum wage is a common practice so not every server in America is getting at least minimum wage if he or she does not get there with tips.

        1. profile image0
          JaxsonRaineposted 10 years agoin reply to this

          The good news is, they can contact the state to have the state collect the money on their behalf. Or they can retain a lawyer, and generally the employer will have to pay double what the employee was owed(up to 2-3 years worth of damages), plus attorney/court fees.

      2. tammybarnette profile image60
        tammybarnetteposted 10 years agoin reply to this

        I bould all be paid min by believe servers, bussers annd hostesses should all be paid min wage by their employers, cooks and dish washers usually make more than min. because they do not make tips. Tips should be bonuses, not a way to make up to minimum. And, tip sharing is a totally unfair practice. A very good waitress/ waiter should not have to share tips with those who aren't as good.and especially with the bartender who usually makes better tips than waitresses. I believe this low wage should have been changed years ago. Many are young adults working their way through college, which is hugely expensive. Being a server is a very demanded and physically hard job. As far as clocking out and hanging around to be called back, that is just wrong. If you need to cut because of slow business,fine, but expecting people to wait around to be called back is wrong. There are always things they could stay on the clock to do, such as clean, do prep work, etc. Just my $o.02....And I have waited tables at two different restaurants, a Lone Star and a Cracker Barrell...neither expected a cut /call back, I must say...

        1. profile image0
          JaxsonRaineposted 10 years agoin reply to this

          tammy, if servers were paid minimum wage + tips, then everyone would have to pay more for their food. It wouldn't really make a difference, because we have the 'standard tip' which accounts for the low wage they are paid.

          Also, I think server jobs are more than adequate for college students. College doesn't have to be so expensive, and any increase in their pay would correlate with an increase in the price of food. My brother worked at a small restaurant in a smallish town, and was able to make $15/hr. More than enough to get him through college. I've seen people get through college on minimum wage, let alone double minimum wage.

          1. tammybarnette profile image60
            tammybarnetteposted 10 years agoin reply to this

            Jax, First I disagree with the premise that any job, especially a server, should ever be allowed to pay less than min. Secondly, you can bust your tail and be the best darn server ever and some people are just cheap, Third, college has become extremely expensive, Fourth, I have watched prices increase on a regular basis due to prices of food increasing and this would be the same exact moral thing to do. Farmers have to raise prices for many reasons; droughts, floods etc. I do not know if you have had the sheer joy of being a server, but it is by far one of the hardest most demanding jobs a person can have, dealing with the public is sheer joy(sarcasm) Some people(many actually) are severly rude. I was a closer for Cracker Barrell many moons ago, I had let all my people go because it was 10 min till close, I all the sudden recieved a party of ten! They were rude, demanding, spents $80 on food and another $100 in the store...they left me $2...My manager was even shocked, opened the safe and gave me a $20...If you have never waited tables maybe you do not know about all of the side work...prepping food, making and then cleaning tea urns and juice machines, taking apart and soaking and cleaning soda machines, sweeping, mopping, filling the salt and pepper and marrying ketchups and other sauces, scrubbing tables and floors, cleaning bathrooms, etc....And not all persons are young, some are much older, especially at the Cracker Barrell or Denneys, or IHOP, they have children to raise....I think it is morally wrong to pay any worker(especially servers who do far more than serve) below minimum wage.

            1. profile image0
              JaxsonRaineposted 10 years agoin reply to this

              They are never paid less than minimum wage. Whether the money comes directly to the server in the form of a tip, or if the customers pay higher prices and the money goes to the employee through the employer, they never make less than minimum wage.

              That's true. I had someone tip $1.37 on a bill that was over $100. The employer made up the difference, because there were no problems with my service. However, being the best server will get you much more money on average than being an average server.

              With current prices, it's still possible for someone to put themselves through college with no scholarship, no grant, and working minimum wage. Takes a little longer, but still possible. Add in grants, scholarships, and student loans, and it's easier and easier. Why do you think education is so expensive? A lot of it is because it's in huge demand. Everybody, regardless of financial situation, basically has an avenue. High demand drives up prices.

              I've been a server, and I loved it. I think it is pay well-compensated considering the fact that it doesn't take 6 years of college to qualify for the position.

              Again, employers aren't paying workers less than min wage. What they are doing is letting the customers pay most of their compensation to the employees directly, to encourage good service. If servers had always made the same min. wage as everyone else, we probably would have a lower 'standard' tip for the nation.

              Remember, the employer is providing a position that pays $2.15 or whatever/hour, + tips, which averages out for his employees at $15/hr or whatever it is. Tips work better than a straight wage would... it allows for merit-based pay, and nobody gets shafted under minimum wage.

              1. tammybarnette profile image60
                tammybarnetteposted 10 years agoin reply to this

                Jax, That is simply not true that nobody gets shafted, many people do, especially at small mom and pops diners...I remember having to work a Thanksgiving day at The Cracker Barrell, I made $17 dollars in tips that day and $2/hr =$33...8/hrx $7.25= $58...I don't mean too toot my own horn, but I was very good at my job...This happened often enough that I quit within 6 months...It should not be straight wage, the employer should pay min and tips should be a bonus for a job well done...We will just have to agree to disagree smile

                1. profile image0
                  JaxsonRaineposted 10 years agoin reply to this

                  Employers are required by law to make up your pay if you don't make minimum wage.

                  1. tammybarnette profile image60
                    tammybarnetteposted 10 years agoin reply to this

                    Hmmm, Did not happen for me, I have heard many stories of the same, I guess none of us were informed of that detail sad

  7. livewithrichard profile image74
    livewithrichardposted 10 years ago

    I think it depends on the concept of the restaurant whether pooled tipping is right or wrong.  For example, I occasionally go to some Brazilian Steak Houses here in Chicago (Brazzaz and Fogo De Chao)(Google them and visit if you get to town).  In both of these places, each table is presented different cuts of meat by several different servers, 6 - 8 of them depending on if it is lunch or dinner.  You get a medallion which is sort of like a red light green light that tells the passing server that you are ready for more food... by the way its all you can eat, yum...  Lunch is about $30 + drinks, dinner is $50 +.  If there is more than 6 in your party then gratuity is auto charged at 20%.  I'm always a 20% tipper anyway but here I usually leave a bit more because I know the tips are pooled.

    1. tammybarnette profile image60
      tammybarnetteposted 10 years agoin reply to this

      Good point, different circumstances may allow tip sharing to be neccessary...Also, gratuity added makes a difference. If I am ever in Chicago I will look them up smile


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