Bartender Courtney Cochrane collects her tips at Brixton’s Pub. The Sparks Street bar has publicly supported a proposed bill to regulate tip distribution.
Servers in Ottawa are pinning their hopes on a bill that could prevent management from taking part of their tips.
Restaurants, banquet halls and bars across Ontario are allowed to collect a percentage of servers’ tips, a practice known as “tipping out,” under Ontario’s current Employment Standards Act. This percentage usually goes towards support staff such as busboys, cooks and hosts, who do not collect tips, but owners are increasingly taking a cut as well.
“When people eat at the restaurant and leave a 15-per-cent tip, they feel like they’re paying for the service, not the food,” says Vadim Malinowski, a server at the Ottawa Convention Centre. “They don’t realize that part of that 15 per cent ends up in the hands of the owner as well.”
In a business in which most people earn minimum wage, tipping out to staff is a common practice, but tipping out to owners is a recent development. A report in the Toronto Star attributes the rise of this new practice to a sluggish economy, as well as a legislated 65-cent wage increase for liquor and restaurant workers implemented in 2010.
“Theft is what it is,” says Paul Hinger, a representative for convention centre workers. “Owners already cover their labour costs with the bill and make a big profit. That they would take a percentage of the tips on top of that is downright criminal.”
For Hinger, paying management part of customers’ tips is akin to paying to be able to work.
Malinovski, Hinger and other workers from the convention centre were invited earlier this month to meet with Ontario NDP MPP Michael Prue during his visit in Ottawa. Prue, the NDP finance critic, met with supporters at Brixton’s Pub to discuss tipping out practices.
Last June, Prue introduced a private members bill, Bill 107, to prevent owners from abusing current tipping regulations.
“While other people are trying to overhaul the Employment Standards Act, my bill is just one line long,” says Prue. The proposed law simply states that “an employer shall not take any portion of an employee’s tips or other gratuities.”
Prue’s interest in the issue came about when a constituent in his Beaches-East York riding, who worked as a server, complained to him about the matter.
After investigation, he found tipping out to be a widespread practice within the Ontario service industry, and a completely unregulated one.
Under the current legislation, employers can legally collect 100 per cent of their server’s tips. The government only requires that the money be declared for income tax purposes.
“Right now, we’re actively trying to raise awareness about this issue so people can know this is going on,” says Prue. “We have a minority government right now, so we have the chance to give these workers the protection they deserve.”
So far, Prue claims the bill has drawn support from both Liberals and Progressive Conservatives, but whether the bill will be reintroduced when the Ontario legislature reconvenes remains to be seen.