If you’re a restaurant owner in the United States, you know that the compensation disparity between tipped Front of House (FOH) employees and nontipped Back of House (BOH) employees has been creating headaches for years. To the point where it makes it difficult to find BOH staff right?
Well, the US Department of Labor just proposed new rules that would allow restaurants to undertake tip pooling.
What is tip pooling? Tip Pool is defined as the collection of a portion of earned tips from a directly tipped employee (i.e. server/bartender) that is then distributed to indirectly tipped employees (bus boy, host, etc). Typically, the collection of tips normally occurs at the end of each shift and distribution of those tips occurs either the next day as cash or is paid out cumulatively on a paycheck.
If the DOL’s new rule is passed, restaurants will be permitted to distribute tips amongst all employees.
Now you’re thinking “that’s great, but now I have another headache to figure out: how to distribute tips fairly!” This is where a superior restaurant point of sale and labor management systems come into play.
The system has different configuration options to help you determine the best collection method, whether that’s automatic or manual. The automatic configuration makes the point of sale system determine tip amounts based on a pre-set percentage based on different parameters. For example, bus boys will get 5% of sales, and the bartenders will get 8% of liquor sales. The manual configuration divides tips based on percentages pre-configured by Managers.
With Simphony Cloud Point of Sale and Labor Management, you can also determine tip amounts based on sales. For example, if you make $5,000 in sales one day, your pool amount can be X%, whereas if you make $10,000 the pool amount can be Y%.
Tip pooling can improve work relations and improve staff morale. After all, earning tips becomes a team effort and gets everyone in the spirit of upselling! The chefs make sure food comes out hot, servers make sure glasses are full, and busboys make sure tables are cleaned. All of this of course benefits the restaurant and fosters repeat visits.
Visit the Oracle website to learn more about Oracle Hospitality Point of Sale Systems and our thought leadership on What is POS, or reach out by sending us an email at OracleHosp_ww@oracle.com or calling us at 866-287-4736.