Trump's New Tip Pooling Rule Means Harsh Fines for Rule-Breakers

Trump's New Tip Pooling Rule Means Harsh Fines for Rule-Breakers

First, the back story:  The Fair Labor Standards Act (FLSA) sets the rules for paying minimum wage and overtime.  It allows employers to take a tip credit against its minimum wage obligations if certain conditions are met.  One of those conditions is that tipped employees must be allowed to retain all of their tips. There is one exception to this – that employers can require employees to participate in a valid tip pooling arrangement.  

There are various requirements for a tip pool to be valid but most importantly, the tips can only be shared with people who customarily and regularly receive tips. Typically, these jobs are in the front of the house.

The FLSA is silent as to whether these same restrictions apply to employers who don’t take a tip credit and instead just pay a full minimum wage.  In 2010, the Ninth Circuit ruled that they don’t apply if you don’t take the tip credit. In 2011, the DOL issued regulations saying that they apply whether you take the tip credit or not.

The Tip Pooling Loophole

In 2017, the Trump Administration proposed a rule that would clarify this issue.  

The rule sought to allow employers who pay a full minimum wage to include back of house workers in a tip pool.  But the rule as proposed left open a potential loophole – that in giving employers control over the tips (under the expectation that they would use them to pay back of house workers) that the rule would have also allowed employers to pocket the tips if they wanted to.  

This prompted an enormous uproar and ultimately the administration scaled back; the law would be revised to make clear that employers cannot under any circumstances keep any portion of their employees’ tips.

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New Spending Bill Bans Restaurants From Skimming Tips

New Spending Bill Bans Restaurants From Skimming Tips

President Donald Trump just signed a $1.3 trillion spending bill into law Friday that included a section that addresses restaurants and makes it clear that employers may not pocket any portion of tips that diners have left for restaurant staff.

Saru Jayaraman, president of the nonprofit Restaurant Opportunities Center said to CNN Money, “We beat them. I think they realized how outrageous what they were proposing sounded to the public, and basically they backed down.”

But that “them” Jayaraman was referring to must have been Congress, as Restaurant industry representatives also showed approval for the rule.

Angelo Amador, senior VP at the National Restaurant Association, argued that most employers wouldn't skim tips even if they were allowed to.

"A decision by a restaurant to retain some or all of the customer tips rather than distributing them to the hourly staff would be unpopular with employees and guests alike, and it could severely damage the public's perception of the restaurant," Amador wrote in his comment on the proposed rule.

The language in the spending bill also does another big thing: It allows employers to pool tips and distribute them among staff, as long as the employer also pays the full minimum wage. Many owners have long sought to boost the pay of kitchen workers and bussers by forcing servers to share their tips.

That's fine with labor advocates at the National Employment Law Project, who say that pooling tips is a good way to create wage equity, as long workers are paid the full minimum wage and tips aren't shared with managers or any other supervisors. "We enthusiastically support this compromise," said Judy Conti, the group's director of federal affairs.

You can read more about the new spending bill and its implications at CNN Money.

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Chef Ego: When Convenience Matters More Than Craft

Chef Ego: When Convenience Matters More Than Craft

By Jim Berman, Foodable Industry Expert

The craft approach to making great food is the only approach. Even the fiercely profit-driven, microwave-popping, food mills have their origins in somebody’s good idea that simply grew beyond the confines of craftsmanship. But how did that happen? Doesn’t every chef, every cook want to make food that is grounded in skill and pride? Opinions on scratch cooking and making every dish part of the chef’s egomaniacal tapestry vary by segment, resources, talent, and commitment. 

Is the juice worth the squeeze? Time is always, always short. Anybody that works in a kitchen that says otherwise is doing something wrong. Or lying.  “When you have a three-man, hole-in-the wall place, you can’t always do it. But maybe make an eight-item menu and do it from scratch. That’s why you have a 15-hour day,” said Bill Hoffman, chef/owner of House of William & Merry in Hockessin, Del.

Effort is often better applied in the more sophisticated aspects of cooking, rather than the knucklehead stuff that can be easily outsourced. Making a big, flavorful, dark chicken stock makes more of an impact than steaming whole crabs to make crab cakes. The answer is in balance by putting resources where they matter most.

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Restaurant Websites: Common Mistakes and How to Fix Them

Restaurant Websites: Common Mistakes and How to Fix Them

By Tim Hilton, Foodable Industry Expert

Not having a website these days is no longer an option. Today’s customers spend more time than ever online, and your website is there to help transition them from mere website visitors into paying customers. Your website is undebatably a vital key to your business success.

Customers turn to your website for information, and depending on whether you give them with what they’re looking for, answer their questions or provide them with value. Your website can attract, engage, or even encourage your customers to look elsewhere.

However, getting your website right isn’t as easy as it seems. There are a myriad of factors and bases to cover when it comes to designing a customer-focused website that does what it’s supposed to. Done right, and always available to your customers, your website has the potential to become your hardest-working employee.

So, what are some common mistakes that restaurants make on their websites, and what can you do to fix them? Take a look below.

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