There’s a downside to Ottawa’s reputation as the best tippers in Canada it seems that some owners are taking a cut of their employees’ tips.
A new national survey has found residents of Ottawa to be the top tippers in Canada, but one Ontario MPP says too much of the money is going to the owners, not those giving the great service.
Square, a mobile payment company, used data collected over a two-year period to pit Canada’s major cities against each other in a battle of generosity.
According to its findings, Ottawa residents leave a tip for the restaurant server 76.7 per cent of the time – with an average tip of 15.6 per cent of the meal price.
This was the highest rate in Canada based on data that the company has collected since October 2012.
Montreal and Toronto were neck and neck for second place with people tipping an average of 14.4 and 14.5 per cent on their bills respectively, but Montrealers tip more often at 70.4 per cent, while Torontonians only tip 65.5 per cent of the time.
Bringing up the rear of the pack were Calgary and Vancouver. Square’s data shows that residents of Vancouver tip 13.4 per cent 62 per cent of the time. Calgarians were the biggest penny pinchers tipping only 13.3 per cent of their bills, and just 59.4 per cent of the time.
The data was collected from transactions made using Square’s mobile payment system, a small square shaped card reader that attaches to the back of iPhones and can be used to accept credit payments.
People living in Ottawa might be tempted to pat themselves on the back, but Michael Prue, an NDP MPP from Toronto, says owners are skimming an increasingly larger portion of tips from servers.
“They may have the highest tippers, but Ottawa is one of the worst for owners taking portions of tips. Employees are not getting the 15 per cent on average they’re getting significantly less than that,” says Prue.
The MPP has been trying to stop this practice since he first introduced his private members bill in June of 2012.
Bill 49 will protect worker’s rights to tips and stop owners from taking a portion of the money. According to Prue, business owners use a variety of creative methods to take hard-earned tips out of the pockets of workers and into their own.
“There’s a whole bunch of ways that employers do it. Some of them just reach into the jar and take it, some of them don’t give employees any portion of the tip. The most common way that it’s done is to take five per cent of the gross profit.”
John Hanson, a bartender at Johnny McBeauty’s in the ByWard Market, has also worked at bars in Centretown.
He says that tips are vitally important to anyone in the service industry.
“Tips are much more important to me and almost all night club staff than our salary. I make $8.90 an hour, but I can make anywhere up to $40 to $50 an hour in tips. Salary is almost irrelevant at that point.”
Hanson says that it’s a common practice for employees of night clubs to pool tips and split them between workers, but recently it has become more common for there to be a mandatory “manager’s tip out” with a portion of sales going to the owner.
“We have all kinds of employees who work the entire night and end up paying the employer for having the pleasure of having worked,” says Prue.
“At first I thought it must be illegal, so I phoned the Ministry of Labour and I was shocked to learn it wasn’t.”
James Rilett, Ontario vice-president with Restaurants Canada, helped Prue to draft Bill 49.
He says that owners taking tips is a practice that has grown over time.
“Tipping has always been kind of unofficial and there aren’t any laws overseeing it so practices evolved over time and something that was perfectly innocent at one time evolved into something that was unacceptable,” says Rilett.
Under the current Employment Standards Act for Ontario restaurants, banquet halls and bars can collect a portion of servers’ tips through the practice of tipping out.
Typically this means that tips are spread out to all staff including hosts, cooks and busboys who generally work behind the scenes and don’t receive tips, but there is no law prohibiting owners from taking a cut.
In fact, under the current legislation, employers can legally collect up to 100 per cent of their server’s tips as long as the money is declared for income tax purposes.
Other provinces, including New Brunswick, Newfoundland and Labrador, Prince Edward Island and Quebec, have enacted legislation to protect employees from owners taking tips, but so far Ontario has yet to take action.
Bill 49 is currently waiting to be called forward for a third reading, the final stage before a bill becomes law.
This is the third time that Prue has brought his bill forward and but even if it doesn’t pass this time he has no plans of giving up.
“I’m never going to quit on this issue. I owe it to the hundreds of thousands of people who wait on tables in this province to make sure that they get the money that they earned and was intended for them and I’m not going to give up until that happens.