Here’s a tip: Don’t mess with your wait staff’s tips.
Celebrity television chef Mario Batali recently reached a $5 million agreement to settle a class-action lawsuit that accused him and a business partner of cheating employees out of their tips and failing to pay them overtime or minimum wage, reports Bloomberg.
In the lawsuit, the employees claimed that Batali and Joseph Bastianic violated the Fair Labor Standards Act when they pocketed gratuities equal to as much as 5 percent of nightly wine sales. Various employees said they were told their tips were being skimmed to pay for the restaurant’s large wine selection or to cover broken glassware.
The Batali settlement sparked a debate on The Chow.com over whether it’s fair for restaurant owners to take a server’s tips and redistribute them to others working in the restaurant. The practice is called “tipping out.” Tipping out is different from what Batali and his partner allegedly did in their restaurants. They were accused of taking a portion of the tips to cover operating expenses.
So, is it fair to make the wait staff share their tips?
“While enforced tip pooling is a violation of the law in some states, it’s still customary in plenty of establishments,” wrote John Birdsall and Joyce Slaton on The Chow.com. “Where it does happen, it boils down to this: Do servers own their tips, or should they share them with the entire staff of a restaurant?”
Slaton came down on the side of not tipping out. She wrote: “I know that tipping out is a tradition, but it verges on fraud. You are taking money a diner left for a specific purpose, and distributing it without that diner’s knowledge or consent.”
Birdsall says it’s all about being fair. Having cooked in restaurants and catering kitchens for 15 years he believes tips should be pooled. In his counterpoint, he wrote: “The income inequality between cooks and waiters was stunning. In my best gig, the owners made it clear that servers were expected to tip out: bussers, line cooks, even the dishwasher. It was a way of enforcing teamwork, of snuffing out the sense that some workers were worth more than others. Tipping out is an acknowledgment of the truth of food service, which is that, from top to bottom, a restaurant staff is a team.”
This all brings me to the Color of Money Question of the Week, courtesy of the discussion between Birdsall and Slaton: Do you like tipping in restaurants? And, if not, would you be willing to pay higher food prices to eliminate the tip system? Send your comments to colorofmoney@washpost.com. Put “Celebrity Cash” in the subject line. Please include your full name, city and state.
Little Tax Mistakes, Big Tax Problems
It’s almost here. It’s the day many people dread: the deadline to file your tax return, which this year is April 17.
Greg Rosica, a tax partner at Ernst & Young, shared with the Wall Street Journal some ways to avoid common mistakes when filing your taxes.
Here are a few.
--Review last year’s return. See if any suspended deductions will be useful this year, especially charitable contributions or capital losses.
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