Here’s a Tip
What’s the best way to deal with tips that roll into your pizzeria?
In most cases, the answer isn’t a one-size-fits-all solution.
“When it comes to tipping, it’s always complicated,” notes David Mitroff, a restaurant consultant and the founder of Piedmont Avenue Consulting, Inc. You’ll want to consider factors such as the minimum wage in your area, the type of employees you have, and whether your restaurant tends to fit into the fast-casual category or falls closer to fine dining.
Follow along for key guidelines on how to handle gratuity among employees at your pizza establishment.
• Assess your area. At the beginning of 2017, Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington required employers to pay tipped employees the full state minimum wage before tips, per the U.S. Department of Labor. If your restaurant is in one of these areas, the arrangement could affect how you choose to handle additional dollars from customers.
“When it comes to gratuity distribution practices, especially in the Bay Area with lots of increases in minimum wages and more on the way, most restaurants and pizza places have found it easier to divide tips evenly throughout the restaurant,” explains Mitroff. “If everyone is doing his or her part in providing great service and being attentive to customer needs, everyone wins.”
Even so, you’ll want to approach how tips are handled among kitchen staff with care. “By law you cannot tip out your kitchen,” explains David Scott Peters, founder of TheRestaurantExpert.com.
For pizzerias in states where the state minimum cash wage payment is $2.13 an hour for tipped employees, you may find a different approach to gratuity is best. As of 2017, the U.S. Department of Labor lists these states as Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, North Carolina, Nebraska, New Jersey, New Mexico, South Carolina, Tennessee, Texas, Utah, Virginia and Wyoming. It may work best in these areas to have servers keep all or most of their tips.
And if your eatery falls into the category of states that mandate employers to pay tipped workers a minimum cash wage that is above $2.13 an hour, you’ll want to assess what servers are getting paid, as well as what other employees receive. States in this category, as of 2017, include Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Missouri, New Hampshire, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Vermont, Washington, D.C., Wisconsin and West Virginia.
• Know your setup. “Fine dining is different than fast casual,” explains Mitroff. Customers who sit at a table for their meal, place an order and are served throughout their time at the restaurant by a waiter or waitress generally leave a tip. Guests who stop by to pick up a pizza and leave, on the other hand, may leave money in a tip jar — or may not.
Mitroff notes a client that runs a pizza place in which one-third of business comes from dining in, one-third from pick up, and one-third from delivery. The restaurant has a tip jar at the counter and allows tips on credit card receipts. On a busy night, when 20 employees might be working, tips are collected and then distributed. Those on delivery keep 100 percent of the tips they receive. Cash from the tip jar and the amount of gratuity brought in from those dining at the place are divided among those serving these areas. “The tips collected are enough that each employee earns an extra $1 or $2 an hour per hour worked,” says Mitroff.
• If you pool, do it the right way. “Generally, tip pooling requires that you notify employees of procedure and that the only ones getting monies from the tip pool are the ones providing services to customers,” points out Scott Behren, an attorney at Behren Law Firm.
You’ll need to decide who your support team members are, such as bussers and bartenders, and decide what percentage of sales should be given to them as a tip. Also keep in mind that workers are generally not required to hand out extra cash. “Tipping other employees is voluntary,” explains Scott Peters.
If you opt to distribute gratuity evenly among employees, consider allocating tips by the time of the day. Since earlier shifts are often less busy, it’s generally fair to collect and distribute tips for the early shift, and again for the later shift.
When determining a percentage, “I like to look at what the average tips are in the evening for a server,” says Scott Peters. If a server at a full-service restaurant with a bar brings in $100 a night in tips, you might decide that the server gives a three- to four-percent tip out on alcohol sales to bartenders. That same server could give two to three percent of all tips to the bussing staff.
“There’s no wrong number,” adds Scott Peters. “We have to realize when we’re asking a server to share tips, we don’t want to make it so detrimental that he or she doesn’t want to come to work.”
Rachel Hartman is a freelance writer who covers small business, finance and lifestyle topics.
