04/10/2013 02:11 EDT | Updated 06/11/2013 05:12 EDT

Restaurant Tip Out Policy: Ontario NDP Want Employers To Stop Taking Servers' Gratuities


TORONTO - Ontario's labour law should be updated to stop restaurant and bar owners from forcing servers to turn over part of their tips, New Democrat Michael Prue said Wednesday.

Prue introduced what he calls the shortest bill in Ontario history for the third time _ it twice died before on the order paper _ a single line that states "an employer shall not take any portion of an employee's tips or other gratuities."

"I understand one of my colleagues in the legislature said he needed time to read and fully understand the bill," he said with a laugh.

"I just want you to know the bill has one operative sentence."

Some restaurants demand servers submit a percentage of gross sales, often about four per cent, which means they must turn over $40 for every $1,000 in total billings whether they get tips or not.

Amanda Barchard, who's been waiting tables in the Toronto area for 12 years, was fired from a new restaurant in Cobourg, Ont., when she complained about the owners taking four per cent of sales when she was paid only $8.90 an hour _"the sub-minimum wage for servers" as she called it.

"I opposed this rather vocally and found myself in hot water for it," Barchard told reporters at a news conference.

"I also sought legal advice and called the labour board, and it was most disheartening for me to learn that the provincial legislation as it stands now does not support me or protect my tips."

The four per cent of gross sales meant giving management money straight out of her pocket, and left less to be divided up with the kitchen staff, added Barchard.

"On a busy Friday where I worked two shifts and had $1,800 in sales, my tip out to the owner was $78, which makes it very difficult then to tip out your support staff, so they get affected as well."

Compounding the problem, said Prue, is the fact tips are considered taxable income by the federal government.

"The Canada Revenue Agency says that tips are part of your income, but the law in Ontario says it’s not, so when the management skims off the four or five per cent it goes directly to profit and no income tax is paid on that," he said.

"If you work in a factory it is against the law for an employer to come as a condition of you working there and say you have to give me a percentage of the wages that you earned or don’t come back tomorrow, but if you work own a restaurant you can do precisely that."

Bruce Katkin, who has owned and managed restaurants in Ontario and Quebec, called management taking a slice of tips "an appalling practice" that started in the early 2000s and has escalated, especially in large chain restaurants.

"Within the franchisee community, I’d say a good 50 per cent at least are doing that, and a few independents are doing it as well," said Katkin.

"The net profit in restaurants is such a slim margin the owners are taking advantage of this to buffer their bottom line and give themselves more money."

Labour Minister Yasir Naqvi agreed Ontario needs stronger rules to protect wait staff from having to give management a portion of their tips.

"I expect when I’m putting a tip that it goes to bartenders, that it goes to servers who work extremely hard," said Naqvi.

"We need to bring in a legislative mechanism that takes that into account."

The Liberal government isn't saying if it will adopt Prue's bill on tips or introduce one of its own.

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