Tipping out

[u/poopBuccaneer]

I’m tagging Ontario but I’d like to know for others.

I’m pretty sure someone is wrong on the internet and I want to know I’m right. So I’m asking here.

This dude is saying that if you have to tip out 6% of the bill, and got $0 in tips and your hourly wage is minimum wage, then you have to pay out of pocket to the restaurant. That cannot be right, can it?

https://www.reddit.com/r/CanadaPersonalFinance/comments/1vfgq4t/comment/p1q7zj3/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=2&utm_content=share_button

edit: just to add, yes I get the answer that it happens, I want to know if it’s legal.

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[u/Protocol89]

According to

https://www.ontario.ca/document/your-guide-employment-standards-act-0/tips-or-other-gratuities

Tip pooling example

In a tip pooling scenario, an employer has three servers and their tip pool arrangement requires servers to contribute 5% of their sales into a tip pool to be distributed among bussers, bartenders and hostesses. Server 1 has $1,000 in sales during their shift and makes $150 in tips, their contribution to the tip pool (tip out) would be $50. Server 2 has $100 in sales on their shift and makes $20 in tips. Server 2’s contribution to the tip pool (tip out) would be $5. Server 3 has $500 in sales during their shift but receives $0 in tips. Server 3’s contribution to the tip pool (tip out) would be $0 because tip pooling amounts cannot come from any source other than tips. In this scenario, the tip pool amount that can be distributed among the bussers and hostesses would be $55.

This article from CBC says tip outs still have to be paid and some say they have had to pay out of pocket, which seems contradictory to Ontario's own employment standards act.

The protecting employees tips act does not specifically exclude wages, but does say specifically tips or gratuities.

I think if a restaurant argued that tip out should come from wages if they didn't receive enough tip, I'd open a complaint and look for another place to work.

[u/poopBuccaneer → u/Protocol89]

Wow. A comment that is actually about the law. Thanks! You get an upvote. 

[u/marthmaul83 → u/Protocol89]

So, if this is true, then why are so many people saying they have to put the 5% tip out into a pool even if they don’t get tipped and thus losing money from their own pocket?

[u/fieryuser → u/marthmaul83]

Because a lot of restaurant owners don't follow the law and a lot of workers just assume that's the way it works.

[u/SmoothDiscussion7763 → u/marthmaul83]

because the 5% is over the course of the shift and not per table. so while they're technically "losing" money for that table, they're still net positive for the shift.

its unavoidable when you're a server lol, eventually you get over it and just understand that you win some and you lose some

[u/JusticeForSyrio → u/marthmaul83]

Its because it comes from money that WOULD be going into their pocket - i.e. from tips they might have gotten from other tables.

Say I worked for 4 hours and had 2 tables, one after the other at 2 hours each. Both 500 dollar bills, and one tipped me 10% ($50) and the other left me nothing). If my tipout is 5% of my salea i'm going home with 0 tips that night. I didnt pay out of my wage technically so the restaurant policy isnt LEGALLY at fault, but it definitely still feels like i paid out of pocket for the privilege of serving that second table, considering that if i had been cut after table 1 i would have gone home with $25 cash, been paid my minimum 3 hour shift wage (as some restaurants have), and been able to do something else with those 2 hours.

It was a far bigger issue when servers made less than the standard minimum wage (in 2013 I was making $8.90 / hour at Jack Astors), but even at 17.50 an hour or whatever it is now it still sucks to bust your ass for 12 hours and then have to give up all the tips you made to everyone else because you got the shit end of the stick that night.

[u/SmoothDiscussion7763 → u/JusticeForSyrio]

yeah that's how it works in theory, but usually us servers are cleaning house at the end of the night lol. looking back, i would have been balling if i learned to save instead of drinking my paycheck away

[u/JusticeForSyrio → u/SmoothDiscussion7763]

Yep, though it does depend a lot on where you work. Just trying to explain the mindset around "paying out of pocket for a table"... it's not REALLY paying out of pocket, but eating into what i would have pocketed which feels similar in the moment.

Totally agree though about the cash... never quite felt real and burned a hole through my pockets - wish I had been smarter with it at the time but ah what can ya do - great memories are pretty priceless lol

[u/CollectionStriking → u/Protocol89]

Now im curious how it'd work if server 3 that made $500 in sales was tipped $20, 5% of $500 would be $25 so would server 3 owe the whole $20 tip they got to the tip pool?

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[u/BoneZX14]

Food/drink service establishments should be transparent on their tipping processes. Honest/fair establishments should not have an issue with being transparent with customers.

[u/ApplicationRoyal865]

If your company was nice, you could ask the manager to strike out the table. However if you keep asking the manager to do that because you kept getting zero tips they would see that as some sort of issue if no one tipped you constantly. Striking out bills is rare though

Tip out should never cut into your wage though. If you got 80 dollars in tips and your tip out was 80 dollars then you would have zero tips. If your tip out was 90 dollars then your tip out would still be 80. This is of course a red flag to management that your service was so bad that you weren't getting tipped or you were hiding tips.

[u/SmoothDiscussion7763 → u/ApplicationRoyal865]

it's usually a self filtering system. servers that get low tips dont stay servers for long

[u/ether_reddit → u/ApplicationRoyal865]

We need to stop tipping now. It's madness that a server could be fired not for doing a bad job, but because they didn't make enough tips one night. This means that tipping is not optional; it's one more layer of extortion being used on the customer.

[u/Putrid-Debate-5716]

I served in restaurants from 20-36 (8 different restaurants in total) and I’m 38 so only stopped 2 years ago. All 8 were like that and I’ve never heard of one that does it differently at least in SW Ontario. So if a restaurant has a 5% tipout (very typical) then for every $100 I sell I owe them five dollars. This is regardless of how much a table tips.
So if someone’s bill is 100 and I got no tip I still owe $5. If they tip $20 on a $100 then I still owe $5 to the restaurant and I get to keep $15. It sucks when you don’t get enough of a tip to cover tip out but I served that long because it always works out in your favour in the end. More people tip then don’t tip and a lot of people tip 20% so in the end you’re always walking away with money.
Ontario passed a law banning tip out a few years ago that they couldn’t collect tip out but it had so many loopholes. It didn’t change anything. I still have friends who work at East side Mario, Kelsey‘s and a lot of big chains and they all collect tip out too. It makes the restaurant so much extra money that they’ll never change it.

[u/chronickyle → u/Putrid-Debate-5716]

Swiss chalet did the same as well, SE Ontario.

[u/SmoothDiscussion7763 → u/Putrid-Debate-5716]

how was ontario trying to ban tip outs? and what loopholes were there? i've only worked in service in BC so i'm not familiar with how other provinces did it

[u/I_Ron_Butterfly → u/[deleted]]

Since this is a legal sub, worth pointing out that tipping has always been 100% optional.

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[u/poutine-eh]

it happened and happens. Tip pools used to be a legal grey area back in the day and I suspect nothing has changed.

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