A good tipping policy considers government regulations, incentivizing employees, creating a team atmosphere, and what your competition offers.
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Your first step in creating a Tipping Policy is following federal, state, and local regulations. You can set up a tipping pool or a tip-out system.
Then, you assign a percentage due to different staff positions. Your tipping policy should encourage better customer
service, a teamwork approach to serving customers, and enticing and retaining the best employees.
Complying With Government Regulations
Be sure your tipping policy complies with federal, state, and local minimum wage requirements and employee eligibility restrictions. Tipped employees can be paid a lower hourly wage than non-tipped employees.
However, if the tips received don’t place an employee at regular minimum wage, you must pay the difference. Owners, managers, and supervisors can be excluded from receiving any portion of the tips.
Your employees must also sign a paper agreeing to your tipping policy.
Tipping Pool versus Tipping Out
With a tipping pool, all tips are collected throughout the day, night, or shift and divided equally among the eligible staff. Tipping out requires waitstaff and bartenders to distribute a percentage of their tips to untipped hosts, runners, kitchen staff, and bussers who helped the waitperson.
Creating a Tip-Sharing Structure
The tip-sharing structure depends on your business and your competitors. The employees providing the
most service to the customers receive larger shares. Bartenders at bars with runners receive a larger percentage than the runners or bartenders filling a greater than the usual number of orders due to drinking specials deserving a larger percentage. Bussers during busy spells should earn larger percentages. The percentages also depend on what your employees could receive at your competitor’s business.
Attracting the best employees improves your sales
You can set your Tipping Policy so that employees keep anything they receive. It can entice and retain top waitstaff. However, less-experienced waitstaff and non-waitstaff may not get tips even though they have supported the waitstaff. You will have to pay the untipped non-wait staff more to make up for the lack of tips. This also doesn’t foster cooperative customer service.
The tips can be pooled and divided among tipped employees. This aids employees who encountered low tippers. The servers usually receive the largest portion followed by bussers, runners, and bartenders.
You can also combine the last two ideas letting employees keep 50 percent and pool the remaining tip. This rewards individual effort and team effort.
You can add a service fee or surcharge to each bill to cover tips for the kitchen staff. However, adding a fee can cause customer confusion and reduce tips.
Create a Tipping Policy as Good as Your Competitors
Your employees will know what the staff at other restaurants are earning. You can ask them so that you remain competitive for top talent in the staffing market. You can evaluate if the salaries are based on the menu prices, amount of business, or the tipping policy. If it is the tipping policy, then make the necessary adjustments.
