Why should Ontario pass a law banning owners and management from dipping into their employees' tips?
In 2010, we learned of an egregious practice of many restaurant owners, both chains and sole-proprietorships, where employees are forced to hand their tips over to management, prompting me to introduce a Private Members' Bill to address the problem.
It needs to be stated that tip-sharing amongst support staff (i.e., bussers, front of house, bartenders, cooks and kitchen staff) is not impacted by this bill. I have never been contacted by servers who oppose sharing tips with those who support them.
I first introduced the bill on October 6, 2010, and it passed 2nd reading on October 28 that year. The government delayed sending it to committee so that it never reached 3rd reading and Royal Assent. The bill therefore died on the order paper when the October 2011 election was called.
My next opportunity came last June. At that time Premier McGuinty said he would support the bill's passage. Servers and the public were ecstatic! But, McGuinty suddenly prorogued the Legislature three days before the Bill went to second reading debate, so it died once more.
Over the last three years, I have become more aware of how pervasive this practice has become after being contacted by hundreds of people. In fact, many owners have written contracts that state the employee must hand a percentage of his gross sales over, whether or not he even received a tip at all. In these cases, all employees are required to sign such contracts before they are hired.
Most diners expect that their tip for service will go to their server and certainly not to the owners and managers. Servers already earn a lower minimum wage -- $8.90 per hour. Tips supposedly make up for this low wage.
All servers are expected to declare their tips when filing their income tax returns. I understand that income obtained from stealing tips is generally not declared and therefore goes untaxed.
Below are excerpts from stories servers have shared with our office:
"2% mandatory tip-out, no support staff and I'm expected to pay from my own pocket if I have a walk-out."
"2% of sales for owner's Mercedes payments, lucky if you get paid on time, still owes me $155 in tips I'll never see and have no legal recourse."
"When I finished college and was offered a management position, in a very busy restaurant with a base salary of $30,000 a year (nearing poverty level) but the kicker was they would give me $300/week cash out of the tip-pool. I felt this despicable and turned the job down, leaving the restaurant soon after."
It is against the law for an employer to take "dine and dash" losses from an employee's wages; however, since tips are not considered wages, it is perfectly legal for owners to deduct these losses from their tips. This bill would stop this practice.
Below is an excerpt from one worker's story:
"So why did I chase down a thief and potential[ly] put myself or the thief's well-being in jeopardy? Well because my employer's policy is that I am responsible to reimburse the restaurant for that 'dine and dash' (theft). Now my employer will verbally say we shouldn't ever run after any thief, but then turns around and makes us sign an agreement that indirectly says that if we don't run after them, then were are paying for the restaurants loss due to the theft.
"I have two young boys and cannot risk my health and safety to chase after a thief. I also have a mortgage, car payment, and bills like the next guy so I can't afford to compensate a multi-million dollar restaurant for losses due to theft from my pockets."
The policy this worker is talking about: "The Bartender/Server is responsible for the reimbursement of dine and dashes on your shift. Be aware of your guests at all times."
These are just a few examples of the hundreds of stories we have heard.
We are determined to see that workers are protected from this egregious practice. If jurisdictions like Prince Edward Island, New Brunswick, Quebec, and New York State can pass such laws to protect workers, so should we.
