At 3 p.m. at Jack Sprat in Girdwood, servers move in and out of the dining room, cleaning and setting tables. Owner and operator Frans Weits answers a question from his executive chef as he passes through the kitchen on the way downstairs to the prep kitchen. In the hot downstairs, room, cooks chop herbs and thinly slice beets. Another washes dishes.
Everyone’s doing their part to prepare for a busy evening, but some will be rewarded more than others.
Weits said that on a night like tonight during peak season, servers will walk away with around $37 an hour in tips. He pays them almost $10 an hour in minimum wage on top of that.
“Now we’re up to $47 an hour,” Weits said. And that’s after servers share tips with support staff like bussers, hosts and bartenders.
Most of us don’t think twice before adding 10 to 20 percent to our restaurant bills. But how often do you know where that money is going? For years the federal government has been grappling with who owns tips and whether employers can tell servers what to do with them. To clarify, the Alaska Department of Labor implemented a new regulation last month that prohibits restaurant owners like Weits from requiring servers to give tips to back-of-house staff like cooks and dishwashers.
“The servers makes two to three times as much as the back of the house. And the cooks, dishwashers work just as hard,” Weits said.
Weits understands that wage gap firsthand. He’s worked almost every job in the industry. So, when he opened Jack Sprat in 2001, he required servers to give a portion of their tips to cooks and to dishwashers. Weits said he keeps raising the kitchen staff’s starting pay, but it’s still hard for them to make ends meet.
“It’s a high cost of living in Alaska. So I want everyone to be able to afford to live here, not just servers,” Weits said. “So I would propose that this regulation get reversed. And at least allow employers to help facilitate an even playing field.”
Weits can still require his servers to give tips to other workers that customers see, like bussers, hosts and bartenders.
Restaurant organizations like Alaska Cabaret, Hotel, Restaurant and Retailers Association, or Alaska CHARR, have come out against the new regulation, saying the line it draws between front-of-house and back-of-house staff isn’t fair. CEO Pete Hanson said he doesn’t know of any restaurant that supported it but that several wrote public comments in opposition. He thinks restaurants should be able to decide what works best for them.
“Servers are the employees who interface with customers, but a server has a whole team of people behind them in the kitchen, preparing the food, washing the dishes, clearing the tables, preparing the drinks,” Hanson said.
Servers have the most to gain from the new regulation. Marty Kimball has worked in restaurants for over 20 years, much of it as a server. He thinks the lines the regulation draws between front-of-house and back-of-house make sense because servers are the ones interacting with the people leaving a tip.
“There are sometimes that it can be a beautiful mutually-satisfactory experience, and there are other times that are just absolutely hell, beginning to end, where you just really truly feel like you are sacrificing your soul for a couple extra dollars to make rent,” Kimball said.
Kimball thinks servers should be able to decide for themselves whether or not to share tips with the back-of-the-house. Kimball acknowledged that the life of a chef is a hard one but thinks the solution is instead to allow restaurants to pay servers less than minimum wage.
Deborah Kelly is director of labor standards and safety for the Alaska Department of Labor and Workforce Development, the department behind the new regulation.
“So when a customer comes in, they expect that their tip goes to the person that they give it to, and this regulation helps to protect that,” Kelly said.
The state of Alaska used to follow the federal Fair Labor Standards Act for regulations on tipping. But those regulations haven’t always been clear, particularly for states like Alaska where tipped workers have to be paid at least minimum wage. Most recently, they clarified that restaurant owners can’t keep tips for themselves, but they can require them to be shared with cooks and dishwashers as long as they pay everyone at least minimum wage. Kelly said that doesn’t go far enough.
“It’s not up to the employer to take tips and then decide how to best distribute them to run their business. They are tips given to the workers, and they belong to the workers,” Kelly said.
Heidi Shierholz of the Economic Policy Institute in Washington D.C., which sent a letter in support of the new regulation, said the vast majority of tipped positions aren’t in fine dining establishments where servers are walking away with $30 an hour.
“(You have to remember) the person who’s working at the IHOP overnight shift that doesn’t have the tips left over to be able to comfortably share with back-of-house workers and so it really is, you’re taking tips that that person uses to make ends meet,” Shierholz said.
Shierholz worries restaurant owners will simply lower the base wage of a cook or dishwasher if they know they can use tips to make up the difference. She suggested that instead, they pay kitchen staff more to stay competitive.
Weits from Jack Sprat said his restaurant can’t afford to raise the wages of back-of-house workers any higher. Some restaurants have tried getting rid of tipping altogether or putting a mandatory service charge on their bills, but Weits said he doesn’t want to do that.
“It feels good to voluntarily give someone money that served you,” Weits said. “Once you put it on the menu, and you require that, it takes the fun out of it and it feels like, you know, oh you’re locking me into this before I even sit down.”
The new regulation doesn’t prevent servers from voluntarily sharing tips with cooks and dishwashers.