Don't Forget to Tip Your Restaurant Owner, Labor Department Says

By Daily Editorials

December 27, 2017 3 min read

Sometime after Feb. 5, the owners of your favorite Missouri restaurants may be able to scoop up that tip you leave for your waiter or waitress. The money could be split among the wait staff and employees like cooks and dishwashers who work in the back of the house. Or the owners could keep the tips for themselves.

The Trump administration's Department of Labor is poised to roll back a 2011 Obama administration rule that said, in effect, that tips belong to the servers. The public has until Feb. 5 to comment on the rule change, which can be imposed without congressional approval.

Currently, employers who pay the federal minimum can't impose mandatory tip sharing. But the Labor Department, echoing an argument made by the National Restaurant Association, says the failure to share creates a huge income disparity between servers and everyone else.

Arguments about tips have long divided the restaurant industry, which employs nearly 1 in every 10 American workers. New restaurants have a high failure rate — 59 percent don't make it three years — and every dime that a server gets in tips is a dime that can't offset payroll costs elsewhere. The tip-pooling issue has been litigated time and again. Some states, including Illinois, have passed state laws that prohibit the practice.

In 2015, the prominent New York restaurateur Danny Meyer, whose St. Louis roots recently were explored in depth when he opened a unit of his Shake Shack chain in the Central West End, shocked the fine-dining world by adopting a no-tipping rule at some of his company's restaurants. Menu prices were raised as much as 25 percent to offset lost income for servers. Results have been mixed.

Meyer has called tipping "one of the biggest hoaxes pulled on an entire culture," tracing its origins to the end of slavery when employers wanted to continue not paying their help.

Despite his noble efforts, Meyer is being sued in federal court in California by angry foodies for "being part of a conspiracy to charge (customers) more for their food."

Despite the glamour that surrounds the foodie culture, the restaurant business is a hard way to make a living. A good waiter in an established restaurant can make a decent living, but working hours in the back of the house are grueling, and the pay is dismal. In many places, servers voluntarily share tips in the interest of better working relations.

The left-leaning Economic Policy Institute estimates that the new rule would allow employers to seize about $5.8 billion in tips a year, taking an average of about $1,000 of every server's income. Whether that money winds up in the back of the house or the owners' back pockets will depend entirely on the owner's integrity.


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