By L.M. Sixel
chron.com
July 25, 2003
AFTER receiving good service in a restaurant, most of us assume the waiter will receive the tip we leave.
But not necessarily. In some cases, the money winds up in the pockets of managers.
In January, the Labor Department forced Sam's Boat on Richmond Avenue to pay $112,702 in back wages to 48 employees after an investigation revealed the restaurant required its waiters and waitresses to give 3 percent of their tips to managers.
After that dispute was settled - without Richmond SB Interests admitting any liability - two more complaints have popped up.
Earlier this month, Willie G's, Landry's Restaurants and the River Oaks Grill were sued for allegedly forcing their employees to contribute a portion of their earnings to their bosses.
Martin Shellist, an employment lawyer with Shellist, Lore & Lazarz who filed the lawsuits, said the practice has become more common as restaurant owners try to devise ways to keep their managers happy and productive.
Under the wage and hour laws, tip pooling is permitted if employees receive more than $30 a month in tips. The money can then be distributed to waiters, waitresses, busboys and bartenders, but not managers.
And if employers count tips toward meeting their obligation to pay the minimum wage of $5.15 an hour, employees must be allowed to keep the gratuities.
One of the lawsuits alleges that employees at River Oaks Grill are required to give the general manager 2 percent of their total net sales after every shift except Monday evenings. The suit contends the salaried manager, who is not entitled by federal law to tips, keeps a portion of the money for himself.
"At the end of the night, the manager would say: `What did you make me tonight?' " said Daryl Sinkule, an employment lawyer at Shellist, Lore & Lazarz which is representing four waiters and one former waiter at the well-known River Oaks restaurant.
Lionel Schooler, an employment lawyer at Jackson Walker in Houston and who represents River Oaks Grill, said he hasn't seen a copy of the lawsuit.
But he said he believes the way the restaurant compensates its employees complies with federal labor laws. Like many restaurants, the River Oaks Grill has an arrangement that provides tips to those who are eligible to receive them,which includes bartenders, bus boys and sometimes the maiter d'.
But the manager doesn't receive tips, he said, and the restaurant plans to contest the complaint once it receives a copy.
While Chris Tripoli, president of the food service consulting company A'la Carte in Houston, said he has heard of restaurants that let top managers share in the tip pool, he said it's not a good management practice.
Tips are meant to be spread out to the staff involved in customer service, he said. And if managers are siphoning off some of the tips, the good waiters will quit to work at a restaurant that doesn't do that.
But he added that some of his clients do allow hands-on, lower-level managers to participate in the tip pool. They're hourly wage workers who also work as the shift leader or trainer.
It's a way to cross train employees and provide some means of upward mobility, he said.
Seven current and former employees at Willie G's in Galveston also allege that they must contribute 3.5 percent of their total gross sales during each shift to a shift pool. The money is then divided among bus boys and bartenders as well as managers and other employees who aren't eligible to receive tips, such as silverware rollers, salad makers and other kitchen workers, according to the lawsuit that was filed recently in federal court in Galveston.
The employees also allege in the lawsuit that when Willie G's puts on banquets, the automatic gratuity is distributed to managers and other employees who are not eligible for tips, such as kitchen employees.
He said hopes the courts will find that Landry's Restaurants and the River Oaks Grill violated federal wage and hour laws on tipping, which would make the employees eligible to receive the full mininum wage of $5.15 an hour plus any overtime they have coming. Restaurants can pay their tipped employees a lower minimum wage of $2.13 an hour as long as the tips bring their wages up to the federal minimum wage.
Amy Kitchens said that when she worked at Willie G's in Galveston as a waitress she had to give up 3.5 percent of her total sales at the end of her shifts - even when customers left no tips. But when she found out that "salad ladies" and the employees who refill ice weren't getting a cut, she complained.
Kitchens, who left the restaurant in the spring, said she has also worked during private banquets and discovered after handling the check at one buffet last fall that she and two other servers were shorted by about $200 in gratuities. She said she complained to the corporate office and was later removed from the list of employees eligible to work banquets.
Steve Scheinthal, general counsel of Landry's Restaurants, said he hasn't seen a copy of the lawsuit but said that to his knowledge, no managers participate in a tip pool in the locations that use a pooled tipping system.
Banquets are different, he said. When employees are hired to work a banquet, they're paid the minimum wage. The tip the host pays isn't really a gratuity, said Scheinthal, preferring to call it a "labor charge."
That money can be spread around to many employees, including the sales person who booked the party, he said.
He said he can't comment on allegations that pooled tips went to kitchen employees because he said he doesn't have enough information.
"We run a clean practice and we know what our obligations are and we make sure everyone is in compliance with the rules and regulations," Scheinthal said.
