Extorting low wages in exchange for tips.

How much does a waiter deserve to be paid? $10.00 an hour? $15.00 an hour? More?


The truth of the matter is is doesn't matter. Restaurant owners are refusing to hire waiters unless they agree to work for the lowest wages paid any workers in this country. Waiters are accepting these low paying jobs for one reason, and one reason alone. They want the opportunity to receive tips from the public. The public doesn't tip everyone in this country. If you want a job where you can expect to receive tips, you have to agree to work for sub-minimum, or very low, wages or you won't get the job.


The question that remains is, how can employers legally extort low wages out of their employees for a chance to receive tips? It's like they are forcing their waiters to pay for the job. What's the difference if a waiter pays a restaurant owner $5,000 up front for a waiter job or whether the waiter agrees to work for lower wages? In the end the restaurant owner is going to help himself to a portion of the tips his employees are receiving from the public. While most customers would agree that their tips are not intended for business owners, business owners don't give a damn who customers are intending to benefit. Business owners have figured out a way to steal the customer's tip. They refuse to hire waiters unless they agree to work for next to nothing in hourly wages. If these busienss owners where to ask for the money up front, it would be considered extortion.


Many employees are being paid much lower wages than they would normally be paid if Americans didn't tip. It's kind of sad to think that the good will of our public is actually hurting those who they are attempting to help out, but that's the truth of the matter. Business owners have figured out that they can benfit themselves to the customer's tip by extorting low wages out of those applying for positions which typically receive tips.


As if this isnt enough, restaurants have now figured out another way to extort even more tips out of their employees. It's called tip pooling. If an employer requires tip pooling, he can then share his waiter's tips with others like busboys, bartenders, hostesses, cooks and dishwashers. Why extort low wages out of only your waiters when you can force your waiters to share their tips with other workers? Once busboys, bartenders, hostesses, cooks and dishwashers start getting tips, the business can start extorting low wages out of these other types of workers too.


In a country founded on freedom, liberty and property rights, apparently not all of us qualify for such rights.


The tips you are presenting waiters in the service industry are being systematically stolen by greedy business owners. Employer required tip pooling must be stopped. When employers require the pooling of tips what they are requiring is that waiters give over their tips to their employers. While I have no problem with waiters voluntarily sharing a portion of their tips with other workers who actually aid them in serving the customer, business owners are using the good will of the public to enrich themselves.


This situation is going to get much worse before it gets better. The IRS has been decieved into the notion that if employers are prohibited from pooling their workers tips, employees will not pay the taxes on their tips. Again we are talking extortion. In this case, restaurant owners are extorting the IRS. If the IRS doesn't put pressure on the U.S. Department of Labor to turn a blind eye to the illegal practice of employer required tip pooling, restaurants will discontinue declaring their worker's tip income.


Think about it. Restaurants want to steal the customer's tip. The IRS wants workers to report their tip income. If employers can't require tip pooling, employers can't steal their worker's tips. If restaurants can't steal their worker's tips then they are going to make sure that their workes don't report their tip income.

The IRS has cut a deal with restaurant owners. If restaurants will report their employee's tip income, the IRS will make sure that the U.S. Department of Labor doesn't enforce federal laws which, when properly interpreted, prohibits employer required tip pooling. This way, the IRS gets what they want, taxes on tips, and restaurant owners get what they want, a way to steal their worker's tips.


Why else do you think the U.S. Department of Labor has done nothing for over 40 years to stop employers from blatantly stealing their worker's tips? Tip stealing by employers has gotten worse and worse with no relief in sight. I just wish the IRS could see through this scam. If things continue, we won't have any tips to report. By the time the restaurants are done cooking the books there will be no income to report.



Email me when people comment –

You need to be a member of FohBoh to add comments!

Join FohBoh


  • Hi George, I understand your bitterness and you are right you are being robbed, and worse the governament backed the propietors in regard to tip sharring, but I believe you are wrong about the propietors introducing compulsary tipping, check it out, when I was in Los Angeles in 1982, one day we were near LA airport, my daghters were hungry, and I said we are not dressed to go to a good restaurant, so we chose the first restaurant that I saw casually dressed people, we went inside we were shown to a table, there was four of us only two settings, the waitress was not only incompetent, but also had an attitude, she took the order, I asked if we could have a drink, twenty minutes later she brought two first courses out, the table still not fully set, my wife and I waited for five minutes, then I called the waitress and asked when will the other first courss would arive and when will the table be set for four, she replied I ll check,

    five minutes later she arives with the other two courses still the table not set, by this time my wife and mine first course were cold, she had problems with the main courses, I asked for the bill,

    1. lousy service,

    2, mediocre food.

    3. I gave her my credit card, and she said I will add my tip on your bill, because you people dont know how to tip.

    I looked for the manager, he was not around so I was told by some young man, and was informed that 20% tip was compulsary? now my experiance in places with compulsary tipping, in England, Italy etc allways lacked service, and you could not complain, in this cases I was being robbed, as a waiter you always tip, like most diners do without it being compulsary. So this is a prolem that waiters have accepted, and if you read my file at waiters world, I stated make the Governament drop the compulsary tipping, the restaurant must pay proper wages $10 to $15.00 per hour, restaurant since compulsary tipping is no longer there they can pick prices up in the menu by 10% this will give them them the extra to make up for the wage rise, the customer will be happy because the 20-25% is no longer applayble, the waiters who work well will stil make big tips that nobody can touch, George I know how frustrated you are, when something is not good, look at it properly, get the waiters together and change it.


  • So you want me to believe that the waiters run the restauarants across America?


    Come on Giuseppe. Owners do what they want, not what their waiters want.


    Do you know that federal regulations define cumpulsory tipping as "money belonging to the employer? CFR 531.56 explains that a cumpulsory charge for service, such as 15% added to the bill is money beloning to the employer.

    Why would waiters want tips, which are protected as money belonging to the employee, changed to a copulsory charge for service which legally belongs to the employer.

    Come on Giuseppe, think about it, it isn't waiters who decided to charge a compulsory charge for service, it was restaurant owners who figured out they could trick customers into giving the owner of the restaurant extra income by charging customers a fee for service. When tips are charged, they no longer are protected as tips. Google CFR 531.55 an read the regulations for yourself.  

  • Hi George, waiters lost this battle becausee they were greedy and accepted compulsery tipping, I have written many replaies to this subject in Waiters World check them up. I am a waiter, I always worked for minimum wages and no compulsery tipping and always trebled my wages, my tips were mine, I made tips because of service, I chose the place I wanted to work and I never had a problem with wages, I was always respected, I, as a manager and owner of restaurants, spoke with the people I worked with and said to them what I expected from them and my Job as a Manager/host/propietor was to make sure all the guests were happy and the waiters made money and kept it, for I knew the more money they made, the better they worked and it was so.

    Compulsary tipping removed the right type of service, waites/servers becaus they did not care about service, because the tips were gurranteed, because of this, new rules were made rules about low wages, ( did the waiters complained?) which I discribed before as miserable, but because tips were up to 25% which is more then most restaurants make in profit, taking tips from you to make up for minimum wages (which was illegal.) And because tips are compulsery, managments found a legal way to redistribute tips, in my file I predicted this, so my Dear George, you can not blame managment nor propietors, waiter thought they ere on a good thing in compulsery tipping, mangment and propietors saw  a resolution, which you are complaing about. Resolution, become a much better server, learn as much as possible, have a great attitude and choose were you want to work, the upmarket restaurant is a better place to work, its is up to you to work wereyou are appriciated. Giuseppe, sorry about the spelling. 

This reply was deleted.

Food Tech Vendors