A Seattle restaurant staffer’s walkout raises the question, “How should a tip pool be split?”
When nine Barrio staffers on Capitol Hill walked out during a July 7 shift to protest the restaurant’s tipping structure, they delivered a letter to the general manager and expressed regret.
“It is not our wish to harm the business, but, in light of an increasingly untenable situation and although we have expressed our concerns to many managers on several occasions, we believe that it We are left with no other choice,” the staff members wrote, adding that they intended to return to work the following day; they just didn’t know how to get management to take their protest against the restaurant’s tipping structure seriously.
Although participants claimed they would be back at work the next day, Heavy Restaurant Group, which runs Barrio, fired all nine within three hours of the walkout.
“It was a tough decision, but it was a collective decision of myself and management. We just felt it was very disrespectful to the team and their colleagues. It put them in a vulnerable position. said Larry Kurofsky, Founder and CEO of HRG.
For months, employees say, they had been trying to talk to HRG (whose restaurants include Meet the Moon, Pablo y Pablo, Fiasco and Purple) about the restaurant’s tip pooling system — namely, how tips are paid to eligible employees at the end of a shift.
The practice of tip pooling is not uncommon in the Seattle restaurant world, and restaurants that have switched from the traditional tipping system to the tip pooling system say the latter is fairer because it distributes tips more evenly between room staff (such as as servers, hosts, bussers, and bartenders) and back-of-the-house staff (cooks and dishwashers). But other than a few labor state and industry stipulations about who can or cannot share a restaurant’s tips, few rules govern tipping, and each restaurant has discretion to decide how to tip the tip pool. tips.
The dispute between HRG and its former employees highlights the lightly regulated subject of how restaurants should compensate most fairly employees who frequently work minimum wage and who rely on tips from bosses to supplement their income.
Barrio employees who walked out said they weren’t against sharing tips with back-of-the-house staff, they just wanted more transparency about how the tip pool works. The problem, they say, is that it operated under overly opaque terms and their repeated requests for documentation or a detailed account of how management allocated tips were almost entirely ignored.
Over a period of months, these staff members independently concluded that the tip money they were taking home did not match the tips they knew customers were leaving, especially in light of the numbers. sale of the restaurant.
“A big part of what pissed off the waiters was seeing the amount they phoned in and seeing him walk into a pool and get so little,” said former Barrio bar manager Madeline Crawford. , one of the nine employees who left. Their demands for detailed explanations and debriefings from management have been mostly ignored, they say.
Although this is the first time that HRG employees have left their jobs, it is not the first time that the group has faced wage disputes. In the spring of 2021, HRG paid $155,000 to settle a lawsuit brought against it by a group of Meet the Moon and Pablo y Pablo employees who alleged that HRG failed to properly allocate service fees it collected to the employees who worked there at the time, and that HRG had not granted adequate breaks.
Some restaurants include the service charge as part of the bill. These charges may be used at the restaurant’s discretion to supplement employee-related costs such as benefits and salaries, but differ from tips in that tips must be fully distributed to specific groups of employees.
As part of the settlement, HRG denied any wrongdoing.
“We implemented a 20% service charge in 2018, along with many restaurants in Seattle. After discussions with our attorney, we were told that the service charge disclosure language on our menus and guest checks was correct. We found out later that the menu language needed to be updated,” Kurofsky said. “Many restaurants had the wrong language and updated their information as there was greater clarity. We have always had complete transparency as well as clear and consistent communication with our employees on the details of service fee allocation. »
The nine employees involved in the Barrio walkout say they are filing complaints with the National Labor Relations Board, the Seattle Office of Labor Standards and Washington State Labor and Industries.
Kurofsky said tips at the Barrio were split between front desk staff and front desk staff in an 80/20 split in which servers, bartenders and their support staff kept 80% of the tips minus a processing fee credit cards, and that this structure has been in place since December 2021.
Kurofsky says employees are notified of the breakdown when they are hired and receive a weekly breakdown of the amount of tips paid via internal communications technology. He called the process “100% transparent” and said he sees Barrio’s tip pool model as a way to address pay inequality in the restaurant industry.
“I have this specific vision,” Kurofsky said, explaining that he believes the highest-paid restaurant employee should never earn more than 2.5 times the lowest-paid employee, and that in many restaurants, the highest paid employee sometimes wins. five times what the lowest paid employee makes.
Employees who are out see it differently. They say they never received a detailed explanation or account of how they were paid for the tips they received. “Larry is less interested in paying his employees and instead thinks we should be paying each other,” former bartender Randall Jefferson said.
In their letter to HRG, the departing employees called for an end to the tip pooling system by August 1 and asked that servers be allowed to keep their own tips at the end of service every evenings and individually tip standard support staff. industry rate. They also asked that the process be well documented. They are not trying to take money out of the pockets of support staff, they say.
“Our idea was that if we were to abolish the tip pool system, we would hope that Heavy Restaurant Group would still adequately pay our back-of-house employees. We don’t need to pay them with our tips. Yes, I think they deserve tips, but it’s more about a lack of transparency and a lack of control. We want to be part of the conversation,” Crawford said.
Kurofsky said if HRG had approved the employees’ walkout demands, it would have been at the expense of other employees and in direct opposition to its pay equity beliefs. Plus, Kurofsky said, changes were already underway.
“They were getting more and more impatient, they took an extreme approach,” Kurofsky said, adding that while the group of nine had waited, HRG management had been working on an alternate compensation structure that would have weighed on the company. company support staff compensation costs. without negative impact on the rest of the staff. Kurofsky said HRG plans to implement this new compensation plan next week.
It’s a move Crawford calls a “slap in the face.”
“We can’t afford to be so patient. We have to find other jobs to be able to pay our rent and feed ourselves,” she says.