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‘We have here employees, who in my view, are getting ripped off,’ says MPP Michael Prue.Thinkstock

Barbara Jobber has worked as a server in all kinds of establishments, from fancy restaurants to casual bars. Over the past eight years in the industry, she's collected plenty of gratuities from customers. And she's had to give away a lot of those tips to her co-workers and bosses.

As part of a common industry practice called "tipping out," many restaurants and bars require their servers to fork over a portion of their gratuities. While these tip-outs are typically meant to be divvied among hostesses, bussers, cooks and other staff, the practice is also abused by employers who take a cut for themselves.

"It's always the management and owners dipping their hands in the pot," Ms. Jobber says.

Ms. Jobber, a graduate student in Toronto, says employers have typically asked her to hand over up to 4 per cent of her sales. That means on a $100 bill, for instance, she'd have to contribute $4 to the tip pool, whether the customer left a gratuity or not.

In Ontario, in an effort to abolish such schemes and ensure gratuities go directly to the employees who earn them, a Toronto politician is aiming to ban restaurants and bars from collecting tip-outs. Michael Prue, the New Democratic Party finance critic and MPP for the riding of Beaches-East York, has resurrected a private member's bill he introduced two years ago that would prevent employers from taking a share of servers' tips. The bill, which received support from all three political parties in 2010 but died ahead of the last election, was reintroduced to Queen's Park on Monday.

"We have here employees, who in my view, are getting ripped off," says Mr. Prue.

The bill itself seems simple (it consists of only a single line: "An employer shall not take any portion of an employee's tips or other gratuities"); determining how tips should be fairly allocated is anything but.

In New York State, where authorities took the rare step of regulating gratuities in 2011, making it illegal for employers to appropriate tips, a flurry of lawsuits have emerged from servers alleged violations. Even top names in the restaurant world have been ensnared. New York magazine's Grub Street website reported in November

that a class-action lawsuit was filed against celebrated chef Eric Ripert, co-owner of Le Bernardin restaurant, and partner Maguey Le Coze, in part, for allegedly mismanaging tips. This March, star chef Mario Batali and his associate Joseph Bastianich agreed to pay $5.25-million (U.S.) to settle accusations by employees that they illegally took part of their tips to supplement their profits.

"It's kind of like pulling a string on a sweater," says assistant professor Mike von Massow of the University of Guelph's School of Hospitality and Tourism Management.

Dr. von Massow, who has been researching tipping practices, says there is no "one-size-fits-all" solution to ensuring that tips go to those who deserve them.

Mr. Prue emphasizes that his proposed legislation is not intended to prevent tip-sharing and tip-pooling among staff, but to crack down on unscrupulous operators. Yet Dr. von Massow argues it's worth examining how such practices evolved in the first place.

Historically, customers would have interacted mainly with a single server, and tipped an average of 10 to 15 per cent on their restaurant bills. But these days, a greater number of staff may be involved in adding value to a customer's visit.

For instance, he says, "Thirty years ago, if you were in a restaurant, you never saw the cook. How many restaurants now have an open kitchen, and part of that experience – part of the intimacy of the eating experience – is seeing someone prepare it?"

Meanwhile, average tips have increased to between 15 and 20 per cent. Through his interviews with numerous servers, cooks and restaurant managers, Dr. von Massow says he has yet to meet a server who earns less than $22 an hour after gratuities, while kitchen staff, particularly line cooks, often receive minimum wage and many work longer hours than they bank.

"Tip-sharing becomes a way to reduce that inequity," he says.

If Mr. Prue's bill is enacted into law, it appears that the devil will be in the details.

Christina Kuypers, vice-president of the Ontario chapter of the Canadian Professional Bartenders Association, says she's hopeful the legislation will increase accountability within the industry. But she notes there are also a number of grey areas, such as when and how tips should be shared among owners who take part in serving customers. (Mr. Prue says his bill would not bar these employers from taking their deserved share of gratuities.)

Donna Dooher, chairwoman of the Canadian Restaurant and Foodservices Association , and chef and co-owner of Mildred's Temple Kitchen in Toronto, also questions whether applied service charges, such as those that restaurants often automatically add for large tables, would be affected by the proposed ban. "Perhaps there's mixed messaging going out that operators are taking tips from servers, and I really don't feel that that's the case," she says.

Ms. Dooher adds that she typically advises other restaurateurs to establish practices on tip-sharing that work best for their teams. "It's complex, you know?"