Monday, May 20, 2013

If you're getting upset about Amy's Baking Company's tipping're too late

I was re-examining the Rose+Moser+Allyn press release of May 15, which I quoted in this post. Part of that press release said:

The owners will likely be holding a press conference before the Grand Re-Opening and answer falsehoods depicted on a reality television show, including assertions that the restaurant confiscates tips from servers.

In fact, wait staff is paid $8-$14 per hour, two and half to nearly five times the standard hourly wage for servers.

Well, I haven't heard anything else about any press conference, but a lot of other people are talking about the tip policy at Amy's Baking Company. In fact, the most powerful force known to humankind, the petition, is being used by nearly 35,000 people, all agreeing with this statement:

Tipped employees are a valuable, intrinsic part of the Hospitality Industry. They are hardworking men and women who have fought long and nobly to be afforded fair, legal wages and tip income in exchange for service on a daily basis. Amy's Baking Company (ABC) in Scottsdale, AZ, has come out publicly that their policy is to confiscate every single penny earned through tipping patrons, without informing customers, and instead, only pay their servers an hourly wage. This policy is 100% in violation of the Fair Labor Standards Act, and given their extraordinary turn-over rate of employees, it is reasonable to assume 100 - 200+ individuals have been negatively affected by this illegal policy. In the interests of so many hardworking Americans, this company needs to be investigated immediately, and their unsavoury actions need to be halted at once.

Extra points for working in the word "unsavoury" when talking about a restaurant.

And just this morning, a New York labor law blog has addressed the issue:

We are interested in this story because Amy's is accused of stealing tips from their wait staff. On Kitchen Nightmares, viewers learned that Amy's pays their servers an hourly rate while pocketing their tips.

It is common---and legal---to pay tipped employees an hourly rate below minimum wage, as long as the workers' tips make up the difference. This is known as a tip credit. Amy's Baking Company's practice is much less common, and probably illegal. A local Arizona news station called the Department of Labor to clarify:

"DOL regulations make clear that under the Fair Labor Standards Act tips are the property of the employee whether or not the employer has taken a tip credit," said [a DOL representative] in an email. "An employer is prohibited from using an employee's tips, whether or not it has taken a tip credit, for any reason other than as a partial credit against its minimum wage obligation to the employee or in furtherance of a valid tip pool (i.e., a pool including only customarily and regularly tipped employees)."

It isn't every day that reality TV provides lessons in labor law.

So today - and especially tomorrow, when the grand re-opening is scheduled to occur - everyone is going to be talking about how Amy's Baking Company servers are being ripped off.

Hold your horses. Your information is out of date, according to a Saturday story from KTAR, which announced that Amy's Baking Company was scheduling a job fair for Sunday to hire 30 people. KTAR noted the following:

Amy's will now be changing their tipping policy, after getting heat for not adhering to the standard tip-based system. They will now pay $5.00 per hour plus employees will get to keep all their tips. The staff was previously paid $8-$14 an hour.

This is understandable, since news emerges in so many places and we can't all keep up. But now the next time that someone claims that Amy's is withholding tips, I'll have to share the KTAR article and note that this practice has apparently changed.

Inasmuch as this is an announced condition of employment, I think it very unlikely that the owners will try to keep the tips this time around. And yes, $5 per hour is below Arizona's current minimum wage of $7.80 per hour, but as noted above, this is completely legal.

So our outrage is out of date and out of sync, but it's also interesting to note that Amy's Baking Company and its hired PR firm have already done a quick reversal. As of the 15th, they were declaring that workers were paid $8 or more an hour, and claims "that the restaurant confiscates tips from servers" were "falsehoods."

Two days later, that wage was changed to $5 an hour plus tips.

Whether a formal press conference is held before tomorrow's grand re-opening, or if the press merely asks questions during the grand re-opening (if they're not barred from the premises), it promises to be interesting.
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