For all the owners out there: do you take an hourly wage when you work the bar?  What about tips? Do you take money from the employee's tips?

 

I'm interested in hearing about how other shops are structured.

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Hey Lisa. You might want to discuss that with an accountant. It may depend on your company structure so that's over my head. I will be taking a draw rather than hourly pay - basically taking a certain amount from revenues that will be tallied quarterly and annually for taxes.  As for tips, IMHO they belong to employees. That's supplemental pay for low wages. As an owner your tips should be profits. If I'm working alone at the bar and I get tips - OK, mine.

 

One tip: if you take a draw, put an equal amount into a tax pool (savings) just to be safe. Words of wisdom from my accountant.

The law on this is very state-specific. In California owners (and managers) are forbidden to take any part of tips left for employees, including tips dropped in a common tip jar. Check with a lawyer in your state.

I have no idea whether this may help you or not but no harm putting it out there!

In our cafe, the tips are 'bagged up' twice a day(at the end of each shift - day and night), and the names of the people who worked that shift, including the owner/s if applicable, are written on a piece of paper and put with the cash made that shift. If the till is down, money may be drawn from tips to balance it. Once a week or so the tips are split.

We believe, in our cafe, that each person working the shift contributes to the tips, and if there is an owner working the floor or bar, then they are contributing to the amount of tips received.

HOWEVER - having said this, it is not compulsory to tip in Australia. People give us whatever they deem appropriate based on our quality of service and product.

lisa, what's an hourly wage?!  mostly just kidding, but it seems like so much of the business' money goes back in the business, you know?  when i have someone working with me, i am also getting paid, and probably also earning tips.  when a part time person is running the shop solo, only that person gets paid.  unfortunately, considering those that have worked with me/for me part time, the tips would be dismal if i wasn't there on the scene...don't mean for that to sound egotistical, but i have yet to see a solid personality that can make the customer feel welcome, and talk the coffee talk, and be quick & neat & efficient all at the same time.

 

thanks for the discussion,

 

sage

the coffee hound

Agreed, Sage.  If I'm running my butt of behind the bar I'm also going to split the tips.  People tip mostly for the preparation of the drink, so when I'm standing behind the espresso machine, that tip is meant for me, rather than the person running the cash register.  Since we all volley between stations we all earn our fair share of the tips.  We see them as a thank you for excellent drink preparation, not a means of paying lower wages -- I still pay accordingly for the work I expect my staff to do.  I don't pay myself hourly.... If we're not busy I'm not making money, whereas my staff still makes an hourly if they're busy or not.

Lisa-

If I took an hourly wage, I might actually make a nice paycheck.  However, as the company is a corporation and I am an employee, I am paid a salary.  More than Steve Jobs official salary but less than the average hourly barista working for me.

 

When working the bar with my baristas, I do not share any tips that may be given by a guest.  However, if I work the bar alone (once in 2010) then I keep any tips given.

 

However, you should check with your local and state labor regulations.  In some jurisdictions, supervisory and management positions are forbidden from sharing in staff tips.

 

That said, our company stays out of whatever tips may or may not be given to staff.  Our baristas are paid an hourly wage above the State and Federal mandated minimum for regular employees - meaning employees who do not rely on tips to boost their wages (like restaurant servers).  Tip collection, distribution and reporting to the IRS as earned income is left completely to their discretion.

Sage-

Not trying to offend, but doesn't that say something about your business model?

sage said:

  unfortunately, considering those that have worked with me/for me part time, the tips would be dismal if i wasn't there on the scene...don't mean for that to sound egotistical, but i have yet to see a solid personality that can make the customer feel welcome, and talk the coffee talk, and be quick & neat & efficient all at the same time.

Jay,

 

Thanks for the info. I'm not salary, I'm hourly based on tip income.  We've got an ownership change happening and the new owner will be working floor shifts. I think he intends to take minimum wage on the payroll plus half the employees tips.  Other than this not helping with labor costs, I was unsure what the etiquette is.  I'm going to touch base with the accountant as well. 

Jay Caragay said:

Lisa-

If I took an hourly wage, I might actually make a nice paycheck.  However, as the company is a corporation and I am an employee, I am paid a salary.  More than Steve Jobs official salary but less than the average hourly barista working for me.

 

When working the bar with my baristas, I do not share any tips that may be given by a guest.  However, if I work the bar alone (once in 2010) then I keep any tips given.

 

However, you should check with your local and state labor regulations.  In some jurisdictions, supervisory and management positions are forbidden from sharing in staff tips.

 

That said, our company stays out of whatever tips may or may not be given to staff.  Our baristas are paid an hourly wage above the State and Federal mandated minimum for regular employees - meaning employees who do not rely on tips to boost their wages (like restaurant servers).  Tip collection, distribution and reporting to the IRS as earned income is left completely to their discretion.

Lisa-

Woah, half the employee tips????   Regardless of legality, that just sounds outright wrong.  Maybe there's something to be said if he's one of two people working, but more than that and that just sounds "curious."

 

Outside from that, Starbucks not too long ago had to pay back tip wages and fines because their supervisory staff (not actual managers, but shift supervisors) had been sharing in the tip pool.  I believe this was in California where they have strict labor laws regarding.

 

You should probably be able to call you state's Department of Labor and see what the rules are in your area.

i consider it unethical to take employee tips. i work three shifts a week solo, and i take tips on those shifts. but if i'm helping out on any other shift, i do NOT take tips.
Typically it's two folks behind the bar, he'll be one of those during some shifts.

Jay Caragay said:

Lisa-

Woah, half the employee tips????   Regardless of legality, that just sounds outright wrong.  Maybe there's something to be said if he's one of two people working, but more than that and that just sounds "curious."

 

Outside from that, Starbucks not too long ago had to pay back tip wages and fines because their supervisory staff (not actual managers, but shift supervisors) had been sharing in the tip pool.  I believe this was in California where they have strict labor laws regarding.

 

You should probably be able to call you state's Department of Labor and see what the rules are in your area.

Good topic. At my cafe I don't find it reasonable for management or owners to take tips. I think that it negatively effects the moral of the employees. Management gets paid a higher hourly wage, therefore do not take tips. When they are working alone they get paid barista wage and take tips. 

 

As the owner I take a set salary and only collect tips when I am the only on one the floor. 

 

The way I see it is that the more money and tips the barista make the happier they will be. I can't afford to give raises right now so I would rather them make more money from tips. This improves the overall moral of the employees which in turn makes the customers happier. I, as the owner, benefit from the business growing. If I'm more concerned with make a few $20-$50 a shift and now the overall growth of the business I feel like my priorities are misaligned. 

 

Hope this helps, just one more opinion :)

 

Kacey

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