Business

Splitting headache over shrinking tips

Heather Skenyon works 30 hours a week as a hostess at Brixx uptown, seating customers, clearing tables and filling drink orders.

The 22-year-old Johnston & Wales student makes $8 an hour but relies on the portion of servers' tips she gets each shift to help pay the bills, she said.

Lately, those tips are dwindling, and servers are grumbling about splitting the money with other workers.“There's definitely some tension,” Skenyon said.

There's long been a quiet struggle between servers and support staff over tip-sharing. But as the economy slows – and people go out to eat less and leave smaller tips – those concerns are heightened, even prompting lawsuits, attorneys and industry experts say.

“A slowdown in the economy inevitably prompts a spike in employment-related litigation,” said Mason Alexander, a labor attorney at Fisher & Phillips' Charlotte office.

In March, the N.C. Court of Appeals ruled that The Cheesecake Factory's tip policy was lawful. A waiter had sued the chain's Durham, Raleigh and Charlotte restaurants in 2006, saying they illegally made servers pay more than 15 percent of their tips to hosts, table bussers and others.

Paul Derrick, the Raleigh attorney who represented the restaurant, said the policy was neither mandatory nor unfair, and that “the company never touched a dime.”

In California in March, a judge ordered Starbucks Corp. to pay about 120,000 current and former baristas more than $100 million in back tips and interest after a former barista complained that shift supervisors were unlawfully sharing employees' tips.

Last month, a federal jury ordered American Airlines to pay nine Boston-area skycaps more than $325,000 in lost tips. The employees had complained that tips plunged after the airline imposed a $2-per-bag fee for curbside check-in. Passengers mistakenly thought the workers kept the fee, the lawsuit alleged.

Later in April, three skycaps sued US Airways, claiming similar check-in fees at Charlotte/Douglas International and other airports knocked their pay below minimum wage.

The souring economy is partly to blame, industry experts say.

The National Restaurant Association's restaurant performance index, which measures the industry's health and outlook, was 97.9 in March, below the “steady” level of 100 and the lowest level on record.

“The economy is affecting everyone,” said Paul Stone, president of the N.C. Restaurant and Lodging Association. “People have less discretionary income. … If you're a server, your tips are going to reflect that.”

That means servers might be more willing to speak out about unfair policies, especially as high-profile suits, like Starbucks', make news, said Alexander, the labor lawyer.

That case has sparked similar lawsuits in other states.

“This is the sort of case that typically starts in California and rolls east,” he said. In North Carolina, “we're very much a service economy. We've got more people in jobs where they get tips than ever before.”

Lawyers are often eager to take on such cases, because they aren't conceptually difficult and can yield big bucks, Alexander said.

In Charlotte, most servers make around $2.50 an hour, plus tips. Local restaurants' tip policies vary.

At Ballantyne's Village Bistro, servers are required to tip bartenders 20 percent of their total alcohol sales, said Gary Murray, the restaurant's president, who added that he hasn't heard any complaints from employees.

At Woods on South, servers give 3 percent of their alcohol sales to the bar and 1 percent of their total sales to the host, general manager Dave Matters said.

“A lot of servers like our tip policy, because it's a little more moderate,” he said, adding that servers there make $15 to $20 an hour with tips.

Pam Baker, a waitress at Union Street Bistro in Concord, said servers there sometimes tip hosts or other staff, though they're not required to. Recently, hosts have declined the money because servers are making less in tips, she said.“People are tighter with their money lately,” said Baker, 52, who has worked in restaurants since she was a teenager. “I really do think the economy has affected everything.”

Her tips have shrunk to about 6 to 10 percent from 20 percent in recent months, she said.

At Brixx, servers tip 5 percent of their alcohol sales to the bar and 1 or 2 percent of food sales to the hosts and table bussers, manager Scott Fields said.

The policy can cause problems when servers feel that one worker has done more than another, for instance, he said.

“It can get political, you know?” Fields said. “It's always an issue.”

Skenyon, the Brixx hostess, who pulls in $10 to $30 in tips a night, said she sometimes finishes a shift with more tip money than servers – and said that can cause hard feelings.

“I don't have a problem with it, but I know servers do,” she said. “If it's really going to cause a problem for you to tip me out your $3, keep it.”

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