Tip Thievery, Codified
Fourteen years ago, I wrote a column about a tip jar in Cleveland and how the managers took all the money in it instead of giving it to the workers who had earned it.
Fourteen years later, I could still write that column about tip jars in too many restaurants and party centers across the country. I know this because when I see a tip jar, I almost always ask an employee who gets to keep the money in it. I am long accustomed to that soft and often nervous response: Management either skims the tips or steals all of them.
Not once have I seen a sign explaining this unconscionable practice. We all know the reason for that. Imagine sharing on Twitter a photo of that tip jar sign: “YOUR TIPS GO TO MANAGEMENT.”
Through my reporting, I have also learned that when paying with a credit card, it is better to tip in cash. Too many businesses deduct a percentage of the credit card service charge from their servers’ tips.
Another lesson: If you are in a larger party and are charged a mandatory “service charge” or “gratuity,” ask your servers whether they get this money. Too often, they never see a cent of it. This is also often true of that mandatory “gratuity” added to room service.
Two things I know for certain about tipping:
1) Most of you who tip are generous souls who trust that your money is going to the intended recipient.
2) Most managers and owners who steal tips from their workers count on your trust to get away with it.
And now, these same bosses are counting on Donald Trump to codify their greed.
In December, the Trump administration proposed giving bar and restaurant owners more control over their employees’ tips. This would allow them to use pooled tips for any purpose, as long as their employees make minimum wage — which, to state what I hope is obvious, is far less than a living wage — or more.
The Labor Department asked for public comments, and hundreds of thousands of people weighed in before the Feb. 5 deadline.
Unfortunately, the public didn’t know what the Trump administration reportedly knew all along, which is the predicted economic impact on those who count on tips. Bloomberg Law reporter Ben Penn reports that the Labor Department kept to itself an internal analysis that found this new rule would cost tipped workers billions of dollars. Every year.
From the Bloomberg story, dated Feb. 1:
“Senior department political officials … ordered staff to revise the data methodology to lessen the expected impact, several of the sources said. Although later calculations showed progressively reduced tip losses, Labor Secretary Alexander Acosta and his team are said to have still been uncomfortable with including the data in the proposal. … They wound up receiving approval from the White House to publish a proposal Dec. 5 that removed the economic transfer data altogether, the sources said.
“The move to drop the analysis means workers, businesses, advocacy groups, and others who want to weigh in on the tip pool proposal will have to do so without seeing the government’s estimate first.”
The inspector general is now investigating.
Meanwhile, Labor Department officials, echoing restaurant industry talking points, insist this new rule would lift the wages of underpaid workers such as cooks and dishwashers.
It’s breathtaking — isn’t it? — how breezily so many restaurant owners insist that yet again, it’s up to you, dear customer, to cough up enough tips to provide the fair wages they are unwilling to pay their employees.
For years, readers have told me how much they resent being expected to subsidize restaurants’ payrolls with their tips. If that describes your current mood, please harness that outrage and take it with you to restaurants. Ask managers and owners how they feel about Trump’s proposed rule. If they approve, make clear the price tag of your objections. Nothing wipes the smile off a restaurateur’s face faster than a roomful of empty tables.
Another gem from the Bloomberg story: “The (Department of Labor) has also argued that managers would be dissuaded from stealing tips, out of fear of employee turnover and decreased morale.”
So we’re to believe that bosses who think it’s OK to steal tips care about their employees’ feelings.
I am ever mindful of the favorite mantra whenever I asked such owners and managers how the public would feel about their tipping practices.
“Nobody cares,” they insisted.
As they soon discovered, they couldn’t have been more wrong.
Connie Schultz is a Pulitzer Prize-winning columnist and professional in residence at Kent State University’s school of journalism.