Red Lodge, Montana

Tips: Where does your tip money go?

Here in Red Lodge we love our restaurants! Most of us have worked in them from time to time, some of us still do, and a few of us own them. All of our restaurants are proudly locally owned and operated, and we can rest easy knowing that any money we spend in them will be supporting our community. Meaning, in part, that we don’t have to worry an incredible amount about the impression of chain-restaurant politics on our waiters, waitresses, bartenders, and kitchen staff regarding the sharing of tips.

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We do have a restaurant in town that’s a locally-owned franchise. But have you ever seen Subway’s tip jar? It would be tough to split a one-dollar bill, a dime, two nickels, and seventeen pennies three ways at the end of a shift, no matter how well you did in high school algebra.

There is, however, some level of mathematics involved in making sure that there is a fair and equal allocation of gratuity. And there are several different ways to skin a cat, as the saying kind of goes, especially when dividing money at the end of the night. Some restaurants require ten, fifteen, or even twenty percent tip share from each member of the wait staff to be given to the kitchen, bar staff, and host or hostess after the shift is over. Other restaurants practice a system of tip pooling, wherein all of the wait staff will combine tips throughout the shift and split the tips equally between all of the employees, and the waitress that actually received the tip will make the same as the guy in the back washing dishes.

According to Montana Wage and Hour Laws, tip pooling or sharing cannot be enforced by an establishment’s owners or management, but must be agreed upon by those who receive the tips. While tip sharing is not legally allowed to be mandatory in the state of Montana, it seems to be a common practice in Red Lodge restaurants. However, there are several justifications for asking a waiter or waitress to share their gratuity with other staff members. Namely, without the rest of the staff there would be no job for the server. Tips are meant to be a bonus for great service; including getting food out in a timely manner, bar service, and even arriving at an establishment to find a properly bussed table waiting for you.

All things considered, the tip you leave is not only for the waitress, but also for everyone involved in the dance that creates a pleasurable dining experience for you and yours. In most restaurants, the servers are paid close to minimum wage, and the kitchen staff and bartenders make more per hour, due to the higher level of technical skill required. So how much of your tip do you believe should go to the kitchen that grilled your steaks and burgers or to the bartender that poured your beers and mixed your drinks? Some of the restaurants in and around town have their own ideas, and here is my lengthy breakdown:

As far as the exact percentage shared with other staffers is concerned, it appears that the number varies according to the establishment. For example, when I worked at The Pub at the Pollard Hotel, I received, on occasion, a few dollars from the wait staff. Of course it was fair that I didn’t receive more, however, because my hourly pay was higher than theirs, and they were essentially the face of the product. So if my kickback was two to five dollars (that would be four to ten dollars split between the two of us in the kitchen), then my hourly wage would skyrocket from $9.00 an hour to upwards of $10.00, on occasion. The waitresses, being paid minimum wage or higher, would make anywhere from $10.00 an hour to $20.00, and that’s not even considering a holiday. I knew it was a much greater spread than seemed fair, but we weren’t ever really busy so my job wasn’t extremely hard. I never felt underpaid.

On the other hand, I worked in the Pizza Co. kitchen for a number of years, and even though tips from wait staff were not something I expected would really pad my wallet or pay my phone bill, I always felt like I left work with a decent amount of cash in my pocket. Granted, Pizza Co. is a busier restaurant than the Pub, but they also have a different tip sharing policy. The waitresses and delivery drivers tip out 20% on busy days, and 15% on a not-so-busy day. The tips are then pooled by the kitchen and split according to hours worked that day. If someone had been in the kitchen for eight hours and another had worked for five, the person who worked longer that day took home more in tips.

At the Bierstube, kitchen staff receives a tip out based on food sales. 5% of the dollar amount for food sales comes out of the waitress’ tips and goes to the kitchen. The same policy is used for tipping out bartenders, based on alcohol sales. How much is made in tips during any given day has an impact on whether or not any are given to the kitchen or bar.
At Bridge Creek, management enforces the tip sharing policy if a server makes $40 or more in a night. Ten percent of the servers’ tips are shared with the kitchen staff, ten percent is given to the bartender, and five percent is given to the host or hostess. The tips are then pooled by the kitchen staff and split according to job. For example, if $20 ends up in the kitchen then $10 would go to the head cook, $5 to the prep cook and $5 to the dishwasher.

Management at Bogart’s enforces a policy that wait staff tip 8% of kitchen sales to the kitchen staff and 10% of take-home tips to each the hostess and the bartender. The Steakhouse uses a similar management-enforced policy, and Foster and Logan’s also has a 10% tip out to other staff members. The bartenders at Foster and Logan’s aren’t required to share tips, but it is encouraged.

I was also, for a short time, employed as a bartender at Old Piney Dell and remember being compensated by wait staff at the end of the night. If it was a fair amount or not I can’t recall. But a member of the Piney kitchen staff recently said, “The kitchen doesn’t see a dime unless it’s an extremely busy night or a special event.”

The real oddball of the group, in almost every category, is The Regis Café. The Regis practices tip pooling amongst all of its employees. Each employee is paid minimum wage, regardless of position, and all tips are split evenly based on a calculation of tips per man-hour. The Regis does this to ensure that everyone makes an equal wage because each employee plays an equal part. Levi Novakovich, the assistant manager, had this to say:

“You know, I think its fair. I feel everyone is an equal contributor to making the ship run. When I worked at another restaurant, I made 2-3 TIMES what the kitchen made, and I worked less hours, and arguably didn’t work as hard. At Regis, because of the tip share policy, we can consistently provide each and every employee with around $13-$15 an hour (between wage and tips). Which, the federal average for a ‘living wage’ is around $12.50 per hour. So, I feel good that at 40 hours a week, a person can make a living wage at Regis, irrespective of where they are in the company.”

The line cook in me just drools at that sort of socialism.

In all of my time as a bartender or cook I can’t recall ever feeling shorted on tips. Ten percent seems to be on the low end around town but it is pretty fair, considering some of the stories I’ve heard from wait staff about dealing with the customers. I feel more comfortable tossing pizzas, flipping burgers, and dropping fries than I ever would hustling back and forth for more this or more that just to be given a crappy tip. Everyone does their part for the bottom line, and I hope they walk away with a little for themselves.

A few bits of tip trivia

  • Federal minimum wage for tipped employees is currently $2.13 per hour, so long as that amount plus tips collected equals at least $7.90 per hour.
  • Montana is one of only seven states which does not allow a “tip-credit,” and requires that all employees be paid minimum wage, regardless of tips. The others are AK, CA, MN, NV, OR and WA.
  • 15-20% of the bill is the most widely accepted average tip amount for a server.
  • MIT calculates the “living wage” of one adult with one child to be $17.16 per hour in Carbon County.

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