If you're like most diners, you probably assume that the entirety of the tip you leave at a restaurant or bar goes directly into the pocket of the person who's serving you.
You probably don't imagine that in some cases, a portion—or the whole amount—might go into the hands of management.
Though Seattle's wage theft ordinance largely prohibits this practice, it still happens.
Just how common is it? According to a recent report, "Behind the Kitchen Door: The Highs and Lows of Seattle's Booming Restaurant Economy," 6 percent of 524 Seattle restaurant workers surveyed said management takes a share of their tips. But the actual percentage may be higher.
"That question that we based that number off of was a singular question about a legal concept," said Rachel Dehn, lead organizer for the Restaurant Opportunities Centers of Seattle (ROC), which released the report. "That's not a concept that everyone identifies with. When we ask about specific behaviors, we tend to get very different answers from workers."
Dehn pointed out that when ROC was studying sexual harassment in the restaurant industry, only about 15 percent of respondents answered affirmatively when asked if they had "experienced sexual harassment." But when asked behavior-specific questions such as "Have you experienced unwanted touching?" that number shot up to around 90 percent.
Karina Bull, a senior policy analyst in the city's Office of Labor Standards (OLS), says the department is currently investigating five tip-theft cases. These are mostly instances where a manager is blatantly stealing—as in taking tips off of a table or out of a jar.
Federal law requires that all tips received by the tipped employee must be retained by the employee or other workers who customarily receive tips via a valid tip pool. Employers can create tip pools to divvy up tips to other staff members who customarily receive tips (including managers) and can also take a percentage of tips to cover credit-card processing fees, which are usually no more than 3 percent.
But it's still fairly common for managers who don't customarily receive tips to take a percentage of tips anyway, ROC's Dehn told me. Owners tend to see this as a way of paying their management without spending their own money. "A large amount of the money that's coming into restaurants is coming in the form of tips," she said. "That's a really large amount not to be tempted by, especially when it comes to paying your salaried staff."
The larger issue may be the lack of transparency. Often people don't even know that management has their fingers in the pot.
Chris Blakeslee, a bartender at J & M Cafe in Pioneer Square, told me that he and his fellow front-of-house employees tipped out about 2.5 percent of their net sales under the assumption that it was going entirely to the kitchen staff. But last year after rumors circulated that the kitchen workers weren't getting their full share, Blakeslee took it upon himself to do the math. He said when he compared what the servers had tipped out with what the kitchen staff had received, he discovered that about half was consistently missing. Blakeslee forwarded me the e-mail he sent to management breaking down the discrepancy.
Blakeslee said when he confronted the general manager about the issue, he was told that management was taking the other half as a form of "profit sharing." He drew up a more transparent system in which front-of-house employees would post their tip income so everyone could see it, but says the system was "scuttled" by the general manager. He added that the manager was eventually fired and the skimming stopped, but not before staff apparently lost thousands of dollars in tips. An e-mail to J & M management for comment was not returned.
In my experience working at restaurants, I've found it's not uncommon for employers to keep workers in the dark about how tips are calculated. Sometimes I would just get a check, with no explanation of the amount or how much was deducted.
Bull couldn't comment on whether the city has the authority to require employers to share detailed tip sheets with employees. However, since April 1, employers are now required to disclose their tip-pooling policies upon hire. If they didn't, employees are entitled to ask for it, and employers could face a $125 fine if the omission was intentional. On April 1, 2016, the OLS will issue rules requiring employers to provide this information to all employees—not just new hires, said Bull.
In many cases, workers may not report issues because they may not be informed of the law, or they're reluctant to report their employer for fear of losing their job. As Dehn pointed out, employees often wait to speak up about tip theft because it usually happens gradually. "People don't tend to come forward until they lose entire paychecks," she said, adding that in her time as a server, she'd experienced tip theft and let it slide. "The reason I didn't come forward about it was just the basic arithmetic: This is a good job, this is a better job than I'm going to get anywhere else. If my manager is stealing $40 from $200, I'm gonna let that go; $160 is still better than zero dollars."
"There are a lot of violations out there that we don't get to challenge because of these types of barriers," said Marc Cote, who represented plaintiffs in a class-action lawsuit regarding service-charge disclosure at Maggiano's Little Italy in Bellevue. "Unlike an agency, we need workers to come forward and be willing to basically represent other aggrieved workers. That can be a daunting proposition for people who might be living paycheck to paycheck and really need to keep their jobs. While there are protections in the law against retaliation, that doesn't change the fact that employers may make rash decisions and retaliate illegally. That's the first question I get from everyone I talk to: 'What is the potential effect on me?'"
Anyone who has worked in the industry knows that there are many ways to get someone to quit without firing them, including assigning bad shifts, small sections, and extra side work. There is also a powerful force of shame in the industry: Enduring long shifts, late nights, and insane rushes is a point of pride for many restaurant workers. This culture often prevents people from speaking out.
So what can workers do to advocate for themselves? A lot, actually.
Those who aren't sure whether their employer is breaking the law can call the city's Office of Labor Standards for purely informational purposes. The OLS will not pursue a complaint unless requested, said Bull, and if a worker does decide to pursue a complaint, the OLS will do everything possible to protect his or her anonymity during an investigation. If a worker files a complaint and requests anonymity, said Bull, "it would be a companywide investigation and we wouldn't name that worker. We could correct the process for the entire company, for all the workers." There are also robust protections for whistle-blowers under Seattle's Wage Theft Ordinance, including from all "adverse action" (not just firing) related to your case—for example, if your boss scheduled you for a shift you weren't able to work.
Violators of the ordinance are already obligated to repay wages and tips with interest and can be fined up to $500 for a first offense, with a $20,000 maximum penalty. The OLS can also refer wage and tip theft cases to the police, adding the potential for criminal charges as a nice little cherry on top of the penalty cake. And a bill from the OLS that was introduced to the city council this week could add a few more delicious layers to that cake by increasing the repayment amount for unpaid wages and tips, and allow employees to directly sue their employer.
Even if workers don't want to go through a heap of administrative process, they can always vote with their feet. Jeremy Price, co-owner of restaurant group Sea Creatures, put it thusly: "If you're doing something scandalous, you would lose your staff overnight." While many employees can't afford to lose their jobs, their employers just as equally can't afford to lose their staff. The restaurant might be able to run without one wheel, but not without all four.
Editor's note: This story has been corrected since its original publication.