Food service employees say “tipping out” to employers cuts into their take-home pay.
ROB FERGUSON / TORONTO STAR FILE PHOTO
Amanda Barchard, left, said she was fired as a waitress after complaining about having to pass on a portion of her tips to the boss. New Democrat MPP Michael Prue, right, is proposing a law to ban the practice.
You may be surprised to learn that when you tip your waiter for good service in Ontario, management or owners may take a third or more of that amount back to supplement their own wages or operating costs.
Michael Prue, NDP MPP for Beaches-East York, has been lobbying for three years to get a private member’s bill passed that will keep employer fingers out of employee tip jars.
Bill 49 (formerly Bill 114) received second reading last May and the Liberal government is on record as supporting the legislation. However, it may never become law if the opposition parties bring down the government over the provincial budget that will be tabled this spring.
Splitting tips among food servers, bartenders, busboys and even kitchen staff has been the hospitality industry norm for years. But over the last decade requiring employees to “tip out” a big chunk of the gratuities they receive to management has become more prevalent due in part to increases in the minimum wage, as well as debit and credit card fees.
Ontario’s minimum wage is currently $10.25 per hour with the minimum amount for servers in establishments with a liquor licence pegged at $8.90 because it is assumed these people will also earn tips. These hourly minimums will increase to $11 and $9.55 on June 1.
Testimony from employees at the November hearings on Bill 49 held by the Standing Committee of the Legislature illustrates how tipping out to employers cuts into their take-home pay.
Heather Thomson has been a food server for 18 years and is currently employed at the Symposium Cafe, a chain restaurant in Bolton. Over the years she has worked as a server in half a dozen establishments. In all cases, she told the committee, a mandatory minimum of from 2 to 5 per cent of sales before taxes was paid out to the house regardless of the size of the tip the guest actually left.
“At Hockley Valley Resort in Orangeville, the restaurant owner told us if a guest tips 15 per cent, 33 per cent of the tip is kept by the hotel,” she said.
Banquet facilities charging a flat service fee also typically skim a portion of the gratuities off the top. Soedi Antonelli, a waitress at the Pantages Hotel for 10 years, gave the example of a month where $16,000 in gratuities was billed, $6,000 went to the hotel, $2,900 was reserved for managers and only $6,000 was left to split among 15 or 16 servers.
Submissions from associations representing employers uniformly opposed blanket legislation preventing tipping out to employers and managers because they say it will add to the regulatory burden of an industry that is already heavily regulated.
However, when Bill 49 was redrafted after second reading, the only concession to employers was the addition of a provision allowing managers and owners who are actually part of the service team to participate in tip pools.
The amendments also clarify that employers can still collect and redistribute tips or gratuities to groups of employees as long as an employee representative participates in the process.
Four other Canadian provinces (Quebec, New Brunswick, Prince Edward Island and Newfoundland) already prohibit an employer from withholding tips or other gratuities.
While commentary on Bill 49 suggests that it focuses solely on restaurants, it could affect every business where tipping is common, including taxi companies, hair dressing salons and spas.
In a Feb. 24 news release urging the government to table the legislation as soon as possible, Prue said, “The Minister of Labour has reiterated his support for the Bill. Even if it is passed today, staff will have to wait until August 26th to finally stop their bosses from stealing their tips.”
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