Many believe the custom of tipping encourages better treatment of customers by waitstaff. However, if waitstaff was not tipped by customers, the employer would have to foot the bill, instead.
It was announced this week that the owner of 15 Houlihan’s restaurants in New Jersey has agreed to pay $ 5 million in back wages and damages to more than 1,000 workers after allegedly denying overtime pay and skimming of tips.
A labor department investigation found that the restaurants denied overtime pay to those who worked more than 40 hours a week at multiple restaurants, and included employees not reliant on tips in a mandatory tip pool, cutting back the earnings of employees making less than minimum wage.
Many chain restaurants require the waitstaff to pool their tips, so if a waiter or waitress has a really good tip, that gets distributed evenly across all waitstaff. Many times, money goes to others who are not considered waitstaff, such as busboys and supervisors.
New Jersey labor law allows tipped employees to be paid a lower cash wage than the standard state minimum wage by their employers, as up to $ 6.47 in tips earned per hour can be deducted from their wage as a “Tip Credit”. This means that, with the maximum tip credit taken, tipped employees must be paid a cash wage of at least $ 2.13 per hour, for a total minimum compensation of $ 8.60 per hour (including tips).
Many believe the custom of tipping encourages better treatment of customers by waitstaff. However, if waitstaff was not tipped by customers, the employer would have to foot the bill, instead.
In some countries, it is either not expected or even considered rude to tip waitstaff and hospitality workers. Some of those countries generously compensate workers who would normally be tipped.
Do you think waitstaff should receive a regular salary instead of tips?
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