NYG: Wait staff not getting their fair share of tips from servers, dishwashers

With an effective March 29 end date for Ontario’s minimum wage hike, Ottawa-based restaurateur C.A. Ross sees changes coming to an industry that has been quite profitable for years. “The volume of business has…

NYG: Wait staff not getting their fair share of tips from servers, dishwashers

With an effective March 29 end date for Ontario’s minimum wage hike, Ottawa-based restaurateur C.A. Ross sees changes coming to an industry that has been quite profitable for years. “The volume of business has been and will continue to be huge,” he said. “Restaurants throughout the province are paying decent wages and have a record level of inventory, which has contributed to increasing profits. These same restaurants don’t see the need to increase their own wages.” But Ross doesn’t blame Ontario’s minimum wage increase. Instead, he points to a provision in the law that forces servers to pay a tip pool to servers and dishwashers. “It really touches all the same individuals who are making above the minimum wage,” he said. “And as a result, restaurants are paying a lot less in tips for the same services they had been paying before.” As a result, Ross said, fewer tips are going to restaurants that may not be perfect in serving alcoholic beverages with knowledge about them, which in turn leads to lower customer service. It’s a challenge, he said, for the “sophisticated” establishment where managers may opt to get rid of servers after five or ten years if their regular income isn’t enough. “They are at a breaking point,” Ross said. “They are working their backsides off and are afraid they may lose their jobs.” Then, it leads to smaller tip pools, which Ross said can leave waitstaff and cooks with less money to spend on their own tips and buy supplies to increase their own service level. “It’s a headache that is a temporary thing that makes a few restaurants shake and the rest shake even more,” he said. “We may not be able to survive but you can’t really blame the Ministry of Labour or the law for this.” Not only is the provincial minimum wage rising, so are those rates for server tips. For instance, these rates used to range from three per cent to two and a half per cent depending on whether servers are hourly employees or on hourly rostered shifts. Restaurants have also had to adjust both their servers’ tips and their dishwasher wages, which are based on waitstaff’s tips and are subject to a 25 per cent differential. This means if a server takes home $350 per night, the service turnover rate for each server is 25 per cent higher. “Our waitstaffs are taking more hours, sacrificing tips and dealing with zero wages,” Ross said. “It really is a miserable labour practice but it seems that the law is fair to waitstaff.” Add to that waitstaff must pay a minimum of $1,120 per year to contribute to the server tip pool – and every year. This is after either working three or more years at their current positions – in which case there is no time limit or penalty on losing their pay on retirement. If you’re a server or the owner of a restaurant, Ross said you’ll want to see this has happened in your province. Ross noted there are not a lot of legal avenues to challenge this, including putting it in the employment standards code, which he said is something restaurants would avoid due to the business costs it would create. What’s known is many employees have used their tips as income when balancing their budget. “Some want to maintain the history of $0 hourly to put away for a rainy day,” he said. “In that category, many would have paid no income tax. Their cash flow would have been reduced, which will be reflected in the tip pool amount.” The increased law actually means waiters are already feeling the effects. Josephine Steeve, an Ontario waitress, is facing foreclosure on her house due to the cost of paying the server tip pool. And the minimum wage increase is only affecting servers – and dishwashers. “We’re at a tipping point, with tips being reduced with the minimum wage and server money not going as far as it used to,” she said. “Waitstaff are reduced because pay is even more significant. It affects the way we can compensate for being casual, friendly and welcoming.”

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