Introduction

In the fast-paced and competitive restaurant industry, every detail counts, including the layout of your restaurant floor plan. A well-designed floor plan can enhance customer experience, improve operational efficiency, and ultimately boost your bottom line. In this guide, we'll explore the key elements of designing a restaurant floor plan that works for your business.

The history of tipping in the restaurant industry

The tradition of tipping in the restaurant industry has a long and complex history that dates back to ancient times. Tipping, or the act of voluntarily giving a gratuity to service workers, has been practiced in various forms across different cultures and time periods.

One of the earliest recorded instances of tipping can be traced back to ancient Rome, where it was customary to give a small sum of money, known as a "vivarium," to servants and attendants for their services. This practice continued throughout the Middle Ages and into the Renaissance period, where it became more common in European countries.

In the United States, tipping became more prevalent in the mid-19th century, following the Civil War. At that time, wealthy Americans who traveled to Europe and encountered the practice of tipping began to adopt it as a way to show their appreciation for good service.

The practice of tipping gained further traction in the United States during the Prohibition era, when many restaurants and bars operated illegally and relied on tips to supplement their income. Tipping became even more ingrained in American culture during the Great Depression, when many businesses struggled to stay afloat and tips became a vital source of income for service workers.

In 1938, the U.S. government codified the practice of tipping in the Fair Labor Standards Act, which established a minimum wage for tipped workers. This law allowed employers to pay tipped workers below the standard minimum wage, as long as their tips brought their total earnings up to the minimum wage threshold.

Today, tipping is a common practice in the restaurant industry in the United States and many other countries around the world. While the practice has its critics who argue that it is unfair and perpetuates income inequality, tipping remains a widely accepted custom that is deeply ingrained in the culture of the restaurant industry.

What is a tip out structure?

A tip out structure, also known as a tip pooling or tip sharing system, is a method used by restaurants to distribute tips among their staff. In a tip out structure, a percentage or portion of the tips earned by servers or front-of-house staff is distributed among other members of the restaurant's team, such as bussers, food runners, and bartenders.

The purpose of a tip out structure is to recognize the efforts of the entire team involved in delivering a great dining experience to customers. While servers typically receive direct tips from customers, other support staff also contribute to the overall dining experience but may not interact directly with customers or receive tips themselves. Tip out structures help ensure that these support staff members are fairly compensated for their contributions.

The specific percentage or amount that is designated for tip outs can vary depending on the restaurant's policies, local regulations, and customary practices within the region. By implementing a tip out structure, restaurants can promote a sense of teamwork and fairness among their staff, ultimately leading to a more positive work environment and better service for customers.

How to communicate tipping to staff and customers

Communicating tipping policies effectively to both staff and customers is essential for maintaining transparency and ensuring a positive experience for everyone involved. Here are some tips for communicating tipping policies:

1. Staff Communication:

• Hold clear and comprehensive meetings or training sessions to explain the tipping policies.
• Clearly explain the rationale behind the tip out system, its benefits, and how the distribution process works.
• Outline the specific percentage or amount that will be allocated for tip outs and provide examples to illustrate how it affects the overall income of the staff.
• Establish open channels of communication to address any questions or concerns that staff members may have regarding the tip out structure.

2. Customer Communication:

• Include a brief explanation on the menu or at the bottom of the bill stating that a tip out structure is in place and that a portion of the tips goes towards supporting the entire restaurant team.
• Clearly communicate to customers that their gratuity is not solely for the server but also helps recognize the efforts of other staff members.
• Ensure that the communication is clear and concise, avoiding any confusion or misunderstanding.

Factors to consider while creating your tip out structure

When creating a tip out structure for your restaurant, it's important to consider several key factors to ensure that the structure is fair, legal, and beneficial for your staff. Here are some factors to consider:

Local Laws: Check the laws and regulations in your area regarding tip pooling and distribution. Some jurisdictions have specific rules about who can participate in tip pooling and how tips should be distributed.

Who Gets Tips: Decide which staff members will be eligible to receive tips. This could include servers, bartenders, bussers, food runners, and other support staff. Consider their roles and contributions to the customer experience.

Fairness: Ensure that the tip out structure is fair to all staff members. Consider factors such as hours worked, job responsibilities, and customer interaction when determining how tips will be distributed.

Incentivizing Good Service: Consider how the tip out structure will incentivize good service. You may want to reward high-performing staff members with a larger share of the tips, while still ensuring that all staff members receive fair compensation.

Employee Input: Seek input from your staff members when creating the tip out structure. They may have valuable insights and suggestions that can help you create a more effective and fair structure.

Your Restaurant Type: Consider the type of restaurant you run and how that might impact the tip out structure. For example, a fine dining restaurant may have different tipping practices than a fast-casual establishment.

Documentation: Document your tipping policy in your employee handbook to ensure that all staff members are aware of the structure and there is no ambiguity. This can help prevent misunderstandings and disputes in the future.

Legal Compliance: Ensure that your tip out structure complies with all relevant labor laws and regulations. This includes minimum wage requirements and any other legal requirements related to tip pooling and distribution.

The four most popular restaurant tip out structure

When it comes to restaurant tip out structures, there are several popular models that establishments commonly use. Each structure has its pros and cons, and the best choice often depends on the specific needs and dynamics of the restaurant. Here are four of the most popular tip out structures:

1. Everyone Keeps What They Earn:

Pros: Simple and easy to understand. Encourages individual performance and can motivate staff to work harder.

Cons: Can lead to a lack of teamwork and cooperation among staff. May result in higher turnover as new or less experienced staff may earn less.

Suitable for: Restaurants where individual performance is highly valued, such as fast-paced environments where servers have their own sections.

2. Even Split-Tip Pooling:

Pros: Fosters a collaborative atmosphere among staff. Ensures that all staff members receive an equal share of the tips.

Cons: Can be disappointing for high-performing staff who feel they are subsidizing less productive colleagues. May not account for differences in workload.

Suitable for: Restaurants where teamwork and cooperation are essential, such as fine dining establishments where service is a team effort.

3. Tip Pooling by Section:

Pros: Encourages teamwork within smaller groups. Ensures that tips are more closely tied to the actual work performed.

Cons: Can create competition and jealousy among staff working in different sections. May lead to servers requesting more lucrative sections.

Suitable for: Restaurants with multiple sections or areas where servers work independently but still need to collaborate, such as large dining rooms or outdoor patios.

4. Hybrid Tip Pooling:

Pros: Combines elements of individual performance and teamwork. Rewards high-performing staff while still ensuring that all staff members receive a share of the tips.

Cons:Can be perceived as unfair by high-earning staff who have to share their tips. May not account for differences in workload.

Suitable for:Restaurants where a balance between individual performance and teamwork is desired, such as casual dining establishments with a mix of experienced and less experienced staff.

It's important for restaurant owners and managers to carefully consider the dynamics of their establishment and the needs of their staff when choosing a tip out structure. Ultimately, the goal should be to create a structure that is fair, transparent, and conducive to a positive work environment.

What you need to know about tip pooling laws

Tip pooling laws vary by jurisdiction, so it's crucial for restaurant owners and managers to understand the regulations that apply to their specific location. In general, tip pooling is legal in many places, but there are important considerations to keep in mind.

One key aspect of tip pooling laws is the inclusion of untipped staff. In some regions, such as the United States, a 2018 law change allows tip pooling to include untipped (back-of-house) staff under certain conditions. However, this is typically only allowed when the employer pays the full minimum wage to all employees, including those who participate in the tip pool. This means that employers cannot use tip credits (paying tipped employees less than the minimum wage) if they want to include untipped staff in the tip pool.

Another important aspect of tip pooling laws is that pooled tips cannot go to the employer. This means that restaurant owners, managers, and supervisors are generally not allowed to participate in the tip pool. The tips must be distributed among the eligible staff members only.

Additionally, tip pooling arrangements must not detract from the minimum wage. This means that if an employee's tips, combined with their base wage, do not equal at least the minimum wage, the employer is required to make up the difference. This is especially important in states or regions where there is a separate, lower minimum wage for tipped employees.

Tips for implementing your restaurant tip out structure

Implementing a restaurant tip out structure requires careful planning and communication to ensure that it is fair, transparent, and well-received by your staff. Here are some tips for implementing your tip out structure:

Communicate Clearly: Be transparent about the new tip out structure with your staff. Hold a meeting to explain the new policy, its rationale, and how it will be implemented. Provide written documentation of the policy for reference.

Seek Employee Input: Involve your staff in the decision-making process. Seek their input on the new tip out structure and consider their feedback when finalizing the policy. This can help increase buy-in and acceptance among your team.

Train Your Staff: Provide training to your staff on the new tip out structure. Ensure that they understand how tips will be distributed, how to report their tips accurately, and any other relevant details.

Monitor and Adjust: Keep an eye on how the new tip out structure is working in practice. Monitor staff morale, performance, and any feedback from customers. Be prepared to adjust the structure if it is not achieving the desired results.

Use Technology: Consider using technology to help implement and manage your tip out structure. Some POS systems have built-in features for tracking tips and distributing them according to your policy.

Address Concerns Promptly: Be open to feedback from your staff and be prepared to address any concerns or issues that arise. Addressing concerns promptly can help prevent resentment and maintain a positive work environment.

Review and Revise: Regularly review your tip out structure to ensure that it is still meeting the needs of your staff and your business. Be willing to revise the structure if necessary to address any issues that arise.

Conclusion

In conclusion, designing a restaurant tip out structure requires careful consideration of various factors, including local laws, fairness, and employee input. By understanding the history of tipping, the different tip out structures available, and the laws surrounding tip pooling, restaurant owners and managers can create a structure that is fair, legal, and beneficial for their staff.

Communicating the tip out structure clearly to both staff and customers is essential for ensuring transparency and understanding. Factors such as local laws, who gets tips, fairness, incentivizing good service, employee input, and the type of restaurant should all be taken into account when designing a tip out structure.

Implementing the tip out structure requires clear communication, training, monitoring, and adjustment. Using technology can help streamline the process and ensure accurate tip distribution. Addressing concerns promptly and being open to feedback from staff are also key to successful implementation.