There’s a war of words going on in the comments of a restaurant review in Philadelphia’s City Paper. Someone claiming to be a server has outed the Arbol Cafe for confiscating server’s tips. In response, someone claiming to speak for the cafe defended the practice, claiming that they need the tips to pay for their renovation.
The “servers” comment:
The owners of the Arbol cafe do not allow their workers to keep their tips. While getting paid 7 dollars an hour to bus, clean, set, take orders, run food, do dishes, and bleach bathroom/floors, the tips from customers are kept by the owners. Tipping the owner is considered rude and telling servers that they can’t is poor practice.
After a four hour shift (28 bucks) with no tips, which one time a server made 30 dollars in tips I was unable to keep it.
The place has all the potential, but has bad policies. NEVER TIP! Your server doesn’t see it.
The “cafe” responded:
We regret and apologize at having to respond to such a base, unfair and inaccurate comment made by the waitress, “John Smith”. The cafe has been open all of three months and is undergoing drastic rennovations. Prior to our hiring any person, we make it quite clear that they will be paid above minimum wage to start. It is also our clear intent to not have waiters or waitresses but rather, persons who are interested in working and growing as a team and excelling in the project’s full potential. Many of our customers have offered their time and skills, free of charge, because they too share in the same spirit of what we have to offer to the community.As newcomers into the Northern Liberties community, we feel a true responsibility to complete a project that is long overdue. A quaint cafe with attached garden seating. Our goal is to bring to the community a relaxed, casual, family atmosphere where tipping is optional for the customers and not needed by the staff. All money generated goes towards financing the rennovations as well as aiding us in being able to pay the workers well above minimum wage in respect to their ability and contributions.We want to thank everyone for their support, generousity and interest in Arbol Cafe. This is a true gift that has been placed in our hands and we vow to remain true to our purpose and sincerity no matter the resistance from those we may never be able to please. Our vision is clear and exspansive, we do hope that you will know Arbol Cafe first hand and understand how the impossible can be overcome against all odds. Thank you again and we apologize for any doubts that may have surfaced, yet we are certain that our heart, actions and intentions are whole and just.
This response doesn’t seem to be going over very well with City Paper readers:
wowwww the fact that you would even attempt to justify this must be one of the most pathetic things I have ever heard. I have been here a handful of times and enjoyed the atmosphere but knowing this my friends and I shall make sure never to step foot into this place. I gave my waiters healthy tips because they were nice and did a great job, not because I believe my food was worth more than menu price. disgraceful
and:
Profit sharing arrangement, Serious Please? What % share of Arbol does a worker receive? When you’re at any restaurant or cafe with table service, and you receive the bill from the server, it’s an assumption that the tab goes to the house and the tip goes to the server. If patrons knew tips were being seized to benefit the house, people likely wouldn’t tip.
If the owners provide the bulk of the service, they’re more than welcome to put their tips back toward the house, but operating under the myth that a server is somehow eventually ‘profit sharing’ in the ‘enterprise’ is the sort b.s. that I was now the exclusive province of Internet startups trolling Craigslist for content producers.
Even the claim that they’ll pay minimum wage at the expense of tips belies their knowledge that the value patrons perceives in a server collectively exceeds minimum wage. Arbol’s exploiting that assumption to benefit themselves.
Other posters got it right, there’s no way Arbol will be able to maintain servers in Philly’s or even Northern Liberties’ restaurant worker market.
If true, is this legal? Judging by what’s been going on in California with Starbucks, it may not be. (We obviously are not experts in Pennsylvania law, so who knows?) Would you tip if you knew that the server didn’t actually get the gratuity?
UPDATE: And in response to this post, Arbol Cafe wrote us:
Arbol Cafe does give tips to the employees, and was giving tips at that time ‘John Smith’ was in training. John Smith was in training and she received $25 for each of her three, 3 hour shifts. We opened in January and she worked a few days in February. If people think that we do not tip employees, they are only feeding off of one of our first employees in training as well as repeat bloggers/posters who now seems out to slander us at every chance they have. While we can’t continue forever defending ourselves without further criticizim from people who like to post negative comments, we do feel that it’s important for our customers and future customers to know that our employees are, and have been, and will continue to be treated with respect and the tips have been, are currently, certainly will continue to be forwarded to them as they pass the training period and can competantly work the front desk.”Thank You,
Beth
Arbol Cafe [City Paper] (Thanks, Maurice!)
(Photo:Tracy O)
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EXACTLY what I was going to say. From the PA Labor and Industry website:
What is the Minimum Wage in Pennsylvania?
“Minimum wage in Pennsylvania is $6.25 per hour effective January 1, 2007. The rate will increase to $7.15 per hour effective July 1, 2007. Employers with the equivalent of 10 or less full-time employees calculated on a 40-hour week can follow a different rate schedule. Click here for complete details on Pennsylvania’s new minimum wage requirements.”
So this whole “[we] pay the workers well above minimum wage” is an outright lie.
They are lying to their guests, their employees, and giving MY neighborhood a bad name. Northern Liberties has the reputation of being very neighborhood and community based, and Arbol Cafe is out of place with these kind of illegal and immoral practices.
Shame on Arbol Cafe.
I’m sure the IRS would be quite interested in Arbol’s unique vision of accounting.
Legal… Not legal… To me this story is primarily about yet another stupid business who hasn’t yet figured out that whatever they do must now hold up to the scrutiny of public exposure.
Judging from the comments on that article, they will be forced to rescind this policy and beg the public forgiveness if they have any hope of staying in business.
They are fast on their way to becoming “that restaurant that steals tips”.
Yay for light.
I feel this restaurant is defrauding the customers.
Tipping can lead to better service, but what if you go to a restaurant more than once. You get good service the 1st time and return. If you get lousy service on a repeat visit you are stuck. If you properly adjust the tip you might never be able to get good service on repeat trips. If you tip well anyways you don’t create an incentive for the staff to improve.
We should get rid of tips. If the service sucks talk to management. If is great you can also let management know. It should be up to the restaurant to keep the service levels high so they can get repeat business.
I agree that the Restaurants owners are sleazy, but not because of the fact they confiscate tips. If indeed the servers get paid Minimum Wage+, AND are told in advance that Tips are house property they have nothing to gripe about (well any more than ANYone stuck at minimum wage).
The issue here is that the CUSTOMERS are being bilked out of the tips.
The restaurant owners need a sign clearly stating that:
“Due to wages paid in this establishment tips to the wait staff are not asked for nor expected. Any tips left will be assumed the property of the restaurant.”
That’s the exact sign I saw once, and I thought it unusual to I asked about it. That’s when I learned that in many states wait staff are allowed to be paid significantly less than minimum wage due to Tips.
To those of you who “Never tip” I don’t expect you to frequent any one establishment long enough to be considered a “regular” since probably if you do the wait staff treats you poorly (or at least doesn’t do more than the bare minimum to keep you from complaining).
BOOOOOO for ARBOL CAFE! Wouldn’t they HAVE to claim the money they steal from their employees as taxable income? Or do they just take the sizable credits off their taxes? I don’t think this would be so so bad if they company divided some of its profits amongst the employees. Like a year end or 6 month bonus or something like that? But their response is a delusion — pure crap!! I will make it a point NOT to go there!
Having worked in the service industry, I have always thought tipping was a poor idea for a bunch of reasons. I think it’s unfair to burden the customer with paying the staff, and I think it’s unfair to the wait-staff because their efforts aren’t always directly related to their pay (ex. Waitress gives awesome service and is stiffed by a customer).
I’ve never understood why a wait-staff position wasn’t treated as more of a sales position, with a low base + commission of sales from the owner. It seems it would be simple to eliminate tipping altogether, bump up the price of the food to include a commission rate, and have the wait-staff be truly accountable for their sales.
This seems like it would be a win-win-win. Customers wouldn’t feel obligated to figure out how much to tip, wait-staff would know that their efforts were directly in line with their pay, and owners would benefit because wait-staff would be motivated to sell and up-sell. Owners want us to do that anyway, and I don’t think it would be too high-pressure for a customer to be in a restaurant that works that way.
I imagine it would be too difficult administratively, or something, otherwise this model surely would have been adopted. As someone who waited tables, I would have profited much more from this arrangement than the helter-skelter method of “who knows what I’m going to make tonight, and it doesn’t really matter what I do, I can’t REALLY control it!”
By the way – this restaurant is totally in the wrong, though. They handled this situation terribly.
I don’t really have a problem with what they are going, given that its disclosed. I appreciate the concept of a tip-less restaurant, with servers actually paid a fair wage. I dont really think the waitress has a complaint here. She clearly knew the score when she started. The customers are the ones possibly getting screwed.
@r081984: To hell with the owners here. If one’s laying down money with the intent to ‘reward’ an individual for the service they’ve provided, the owner has no right to take it all away and put it towards other costs… unless that policy’s been defined and patrons are made aware of it.
I’ve worked in places where tips were ‘frowned upon’ — there were notes on the menus, and signs posted on the walls that spelled the policy out. When offered a tip in such a place, we were told to politely decline.
Seems like the owners here are content to rip both their employees & their customers off. They’re doing nothing to discourage tipping, and reaping all the benefits of tips that weren’t left for them. I have no problem with split tips (in certain situations), but this is slimy, and it’s wrong.
@Rectilinear Propagation: I can’t believe I missed ‘the project’! Sounds like somebody really huffed the paint fumes as they were prepping for opening. I bet they don’t serve soup and sandwiches but “experiences”, arrrgh.
It may not be illegal, but it’s definitely scuzzy if customers aren’t informed before-hand that their tips are not being kept by the wait-staff.
Sounds like this person never worked at a restaurant before. I delivered pizzas in college and got paid the ‘server wage’, $2.15 an hour plus tips. This is pretty standard in all states. Quit bitching and get a job as a real waiter if you want to make money.
It doesn’t particularly matter if it’s against Pennsylvania law. It’s against Federal law already. From the DOL:
“Retention of Tips: The law forbids any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. A tip is the sole property of the tipped employee. Where an employer does not strictly observe the tip credit provisions of the Act, no tip credit may be claimed and the employees are entitled to receive the full cash minimum wage, in addition to retaining tips they mayshould have received.
Service Charges: A compulsory charge for service, for example, 15 percent of the bill, is not a tip. Such charges are part of the employer’s gross receipts. Where service charges are imposed and the employee receives no tips, the employer must pay the entire minimum wage and overtime required by the Act.”
Sounds like they need to start charging a service charge if they want this to be in any way legal. Even then I’d say it’s morally questionable.
There are two issues here:
1) As long as employees are told of the policy beforehand, the employees are not the victims here.
2) I can vouch that customers are NOT told of this policy in any way (via signs or a blurb on the menu). THIS, to me, is the key issue here; not the employee/tax issues.
I should, however, clarify that Arbol Cafe only has about 5 small tables and rarely are you ever served by anyone besides the owners. Most $$ transactions occur at the cashier rather than the tables. But, in the event that a customer is indeed served by somebody other than the owners and the customer feels compelled to tip for their service, this is where I have a problem with their lack of notification. I think most customers assume that a tip will go directly to their server and not funneled to management. A customer should be allowed to make a decision whether they still want to tip given the policy. But this is only possible if the policy is made clear, and it is not. That’s the problem that I have with it.
In Washington, the minimum wage for tipped workers is the same as the minimum wage for all workers– $8.07 per hour.
It’s not unheard of for waiters and waitresses (at nicer joints) to make up upwards of $10.00 an hour for their base wage. And they get all of their tips on top of that.
I tip well, mostly out of guilt/social pressure, but I don’t necessarily believe in it. I mean, if I work all day at my job that pays me $10.00 an hour to (insert up-tipped, but skilled, job here) and then I go to a restaurant and the worker is making the same base wage as I do in an UNSKILLED profession, why should I tip?
I mean, any job that deals with the public is a “service industry job” but only some of them get tipped. Why don’t we tip grocery store clerks and the UPS man, but we do tip our taxi driver and the waitress?…
In a previous life, I was a social worker and my roommate was a waitress (at a mid-range joint). She made nearly double the money I did. Something is wrong with that.
Not that I don’t think this restaurant owner is a total skeeze– they should be hung out to dry. Especially if they’re in a state with lower base wages for waitstaff, regardless of what they were paying their employees.
When people tip, they assume that money is going directly to their waiter/busboy/hostess, etc… If it’s not, that needs to be disclosed up front. Anything else is nothing short of fraud and theft.
The waiters should get the tips from those that choose to leave them. Then again I dont usually tip anyone, so the house wouldnt have gotten anything from me anyway.
They should put up a sign “tipping free zone, please dont tip”
I live a few blocks away from this place. The servers do make more than minimum wage and it is supposedly a deal between the servers and the owners. which in and of itself I am fine with. But my big problem is the policy is not posted in the cafe so they’re taking advantage of their customers.
There’s been a large discussion in this issue on the message boards for the neighborhood, with some additional comment from the owners of the cafe.
http://pub50.bravenet.com/forum/4226496069/show/627264/1
@kable2: You’re a cheap bastard.
WTF? That is the weakest argument for stealing tips I have ever heard. They tried to make it sounds like opening a restaurant was some sort of community charitable endeavor. It is a business, in this case one that is ripping off the staff.
Can anyone who works as wait staff answer this? If I tip and pay both in cash are you more likely to not have your tips stolen by the restaurant vs. paying with a credit card?
For all those that don’t believe in tipping. (please don’t side-trip on illegal immigration)
3 weeks ago, Sunday front page LA times. Hand car washes and illegal aliens. It’s estimated that 90% of the car washes in LA don’t pay the employees at car washes. They work for tips ONLY. The pool their money and sleep packed into one room apartments. Often working a year before becoming a “towel boy” to accept tips. One car wash owner (3 car washes) has been caught multiple times (from whistle blowers), ends up in court and pays as little as a $17,000 fine. (which doesn’t go to the employees!) Cheaper than paying the employees. A legal car wash owner stated it is not possible to operate a car wash in LA and pay employees a minimum wage, do the math for costs and there is no way for them to stay open. And these guys who dry off your car in 100 degree heat, working for tips only, still come out way below minimum wage. Can you imagine working that hard all day in this heat and only having $20 bucks to show for the work. (those that do pay employees pay only $1.63 an hour!) for doing 300-700 cars a day!!! How about working extra hard while the car owner watches in hopes of a larger tip, just to be snuffed because they think you make enough on minimum wage?? !!!!
I don’t believe in illegal immigrants or in exploitation of them, so you won’t see my car in a hand wash, car wash while I suck down a $5 Cafe-mocha, then only tip $1 as I hop in my shiny clean car. Only machine wash or even better, the kid down the street will make a few EXTRA bucks for doing it for me!
(note, data was inserted from memory for point of example, see actual story for exact amounts, I believe the figures are much worse than I stated!)
[www.latimes.com]
ok as a PA resident I should speak up here.
PA state minimum wage for tipped employees is $2.83 an hour. If this place is paying $7 an hour, they are infact, paying well above minimum wage for tipped employees.
Checking the Pennsylvania Department of Labor and Industry website this is how the minimum wage law here works
“The minimum wage credit for tipped employees will remain at $2.83 per hour. However, an employer will have to make up the difference if the employee’s tips and the $2.83 per hour do not meet the full Pennsylvania minimum wage listed in FAQ 1 [in this case $7.15 per hour]. The tip credit applies only if an employee received more than $30.00 in tips during a month. If an employee does not receive more than $30.00 per month in tips, the employer must pay the regular minimum wage.”
By them removing the tips entirely, they are shorting the employees 15 cents on a legally mandated wage.
Which regardless of how “good” it might seem to the employer is wholly illegal
@r081984: There is no upper limit on how much a tipped employee can make. Just because they’re receiving $ 7.00 per hour does not mean they automatically forfeit their tips. In Pennsylvania, the MINIMUM a tipped employee can earn is $ 2.83 per hour, as long as the amount in tips they receive results in the employee earning at least the minimum hourly wage rate.
Look here for more info:
[www.dli.state.pa.us]
@friendlynerd: The PA minimum wage is currently $ 7.15 per hour for employers with 10 or more full time employees. If this cafe employees less than 10 full time employees, then their obligation is to pay their employees at least $ 6.65 per hour. Beginning July 1, 2008 the cafe will be obligated to pay their employees at least $ 7.15 per hour.
Here’s more info:
[www.dli.state.pa.us]
@Chols:
I call BS on your employer. Just because you make more than minimum wage doesn’t make it stealing if you accept a tip. An employer has the right to make it official policy for employees not to accept tips (which some do), but they can’t accuse you of stealing money which never belonged to the company to begin with.
@Beerad: The point of tips is NOT to meet minimum wage. It’s an old tradition that goes back a lot longer than minimum wage laws in this country. And for those of us who live in states that don’t screw service industry workers by setting even lower minimum wages, it’s patently false.
I don’t understand how people can say the server does nor deserve tips because they are paid above the minimum wage.
Their base pay is irrelevant. They are service workers in an industry that receives tips. The same as your hair dresser, barber, or door man.
As has been previously mentioned, the tips are property of the waitstaff and management has no right, legally nor morally, to take them to improve their business. The “whistleblower” should be commended, even if she agreed to this situation if only to inform others of the practice before accepting employment from this establishment.
The stupidity of business owners never fails to amaze me
In Seattle’s U District, the owners of the 2 student-favorite Indian places (Cedar’s and Taste of India) are known to pocket tips as well. The servers all make a decent wage (or so I’ve heard), but all tips go to management/owners. Both restaurants are famous for having super-attentive staff, but if you don’t tip well you get blacklisted and the great service immediately turns to crap.
What’s horrible is how GOOD the food is. Between the service and the food, it’s hard to justify not tipping – especially if both will get worse once they recognize you as a bad tipper.
@SpiderJerusalem:
That remains to be seen on appeal. The arguments and facts that led the decision weren’t accurate at all.
Fuck the cafe. As one of the respondents put it, the house gets the tab. I am paying the house for the food or drinks I ordered. The tip goes to my server.
That’s great that they pay above minimum wage but that doesn’t entitle them to the tips.
Does anyone know where the ‘tip’ culture originated? Seems to me that we should abolish it, ala europe, and make businesses start paying decent wages not ‘waitress wages. There will always be cheap people who don’t tip well. And there will always be generous people who feel a connection with their server enough to slip them extra few bucks.
Either way, this whole tip thing really doesn’t work. I suspect that patrons started it themselves and businesses/government started using that homegrown generosity of strangers to justify paying their employees less as if that patron money was automatically part of what the place pays their employees. The logic of it all doesn’t make sense unless you’re Mr. Moneybags.
This is violative of Federal wage and labor standards. If this is actually happening, and if the restaurant is paying the subminimum “waitress wage,” then the restaurant is in violation of Federal law. In addition, if the restaurant has been confiscating tips and not reporting them a business income, then they would also be liable for taxes and penalties on any unpaid/unreported/underpaid/underreported business earnings derived therefrom.
OTOH, if the restaurant is not paying subminimum wages to its waitstaff and is retaining tips, then there’s no legal violation. That said, keeping the tips without telling the customers about it is a pretty lousy thing to do. In such a case, I’d stop going to the restaurant and I’d tell the owners why.
And maybe send them copies of receipts from other restaurants I had eaten at in the last 30 days, just to give them an idea of what they’re missing.
Sigh. I have no problem with the owners’ policy, AS LONG AS THEY MAKE IT CLEAR TO THEIR PATRONS!! If it’s clear to the patrons that tips don’t go to the staff, then fine. In that situation, I would never tip. If the restaurant thinks that its food is worth more than the prices on their menu, then they need to raise their prices. Otherwise, they are basically stealing from their servers, and from their customers.
This would really piss me off if I was a customer at this place. I think I would go there and ask for all my tips back.
@Concerned_Citizen
@Bladefist
Does this sound familiar?
“I don’t tip because society says I have to. All right, if someone deserves a tip, if they really put forth an effort, I’ll give them something a little something extra. But this tipping automatically, it’s for the birds. As far as I’m concerned, they’re just doing their job.”
…So what are your bank heist codenames?
@Concerned_Citizen:
I’m a waitress and you not tipping is not going to make the owners pay me more than 2.50$ and hour… it just makes you a jerk. if you can’t afford to tip you can’t afford to eat out. no one cares if you don’t like it.
I tip to let the server know my opinion of their service. I’ve left tips from 7 cents (all the pennies I had on me at the time, for a server who ignored me and chatted on the phone for two hours,) to 100% of the bill. (And it was well earned.) I’d be mighty pissed to know that the tip didn’t go where it was supposed to go.
Wow! Reading all this is bad for a new cafe. Question.. if they are renovating/outdoor eating .. do they even have a permit or need one from the city?
If the employee feels this is unfair then they should contact the local office of the US Dept. of Labor and file a complaint.
If you think this cafe is sleazy for justifying keeping tips to cover business costs, you should see how tips to strippers are distributed. Before a dancer sees a single dollar bill from her garter belt, she has to tip out to pretty much every non-dancing employee in the house, from the bartender to the DJ to the makeup artist to the bouncer. Granted, they typically make enough to more than cover the mandatory tip-outs, but they can have trouble breaking even on slow nights.
Of course, tip-outs (tips-out?) is standard practice in restaurants too, albeit to a much lesser extent, but strip joints are still taking monies intended for strippers to cover their business expenses (in this case, payroll rather than renovations) and evading payroll taxes.
I’m surprised no one has mentioned the recent Sky Cap lawsuit. Was it American Airlines (?) who instituted a $2 charge for sky cap luggage service, and this made the people who paid not tip the sky caps for their service.
But the fact they didn’t anyone was deliberate, because if they did, the amount of the tips would go way down.
Business never kill their golden goose unless they have to.
That reply from Arbol has got to be one the most BS laced PR statements I’ve ever seen.
Underfunded restaurant steals servers tips to finance their expansion. Disgusting in so many ways, but at least they’ll be out of business soon.
I have nothing but praise for what they’re trying to accomplish. Tips are not “mandatory” per se, but who the heck came up with the 15% rule? Why are restaurant owners allowed to underpay servers due to the fact that they can expect the remaining amount to come from tips?
Tips in today’s time is not really a tip anymore, it’s basically a 10-20% tax added onto your bill. If they can’t afford to pay servers minimum wage, they should be increasing the menu’s prices.
That way I can only tip when they deserve it.
Said that, if there was a tip given, it should still be shared with the server.
@krunk4ever:
Also note what is considered a “fair” tip keeps going up, too. Used to be 10% was considered an adequate tip for adequate service and 15% was a fairly generous tip. These days it seems 15% is becoming the expected minimum and 20% for good service.
It also annoys me when places automatically add a gratuity onto your bill. A tip is supposed to be a discretionary, extra amount you can pay to acknowledge good service. If the restaurant automatically tacks on a 15% gratuity regardless, what incentive is there for your wait staff to provide good service? The point where a tip becomes mandatory is where it stops being a gratuity and becomes a hidden charge for service.
I’m just surprised that the restaurant didn’t see the words BAD PR MOVE written all over that post in red. The whole “bad publicity is good publicity” adage only works for celebrities, not restaurants.
I tip according to service. I will not tip for bad/no service, and when it’s somewhere that they pool it, I will write on my check “this tip is for ______.” If the restaurant in question not being fortright about who is receiving the tips, then they’re being really shady.
I’m sorry, but at wait point is $7/hr a decent wage??? Wait staff make much more than that at a decent resturant per hour usually.
These guys are scum, the resturant has ZERO right to keep the tips, legal or not. It is commonly understood tips go to the waitstaff, not to the resturant. If they wish for the customers to pay for their renovations, then raise their prices…. these owners are douche bags.
The tip stealing is the cafe’s owner way of saying your work can be replaced and either do it or find other employment. It sickens me to see employers view employment as a benefit in itself. I bet that owner would prefer slavery if it was legal.
1) if the restaurant is paying over minimum wage, they are in the (unfortunately completely immoral) right.
2) Can the wait staff not find another job?
Such bleeding heart crap. $7 an hour is what you get for blowing your money on drugs and rims (or crack babies, if you happen to be female) instead of educating yourself or at least getting a skill. These dregs of society deserve their minimum wage, and not a penny of my money in “tips”, to incentivize them to get REAL jobs. I am against even a minimum wage, they should get pennies per hour if that’s what they settle for. Don’t sign a contract and then bitch about the raw deal you got, its just like the “sub-prime” i.e. morons who destroyed the economy and now are crying, crying, crying.