POINT OF VIEW: Memo to employers: do the right thing

March 01, 2018

Tamlynn Yoder, a server at Outback Steakhouse, was recently fired — allegedly for using Facebook to embarrass Christ Fellowship church for not tipping her on a $735 takeout order. NFL quarterback Drew Brees was similarly shamed in 2013 for leaving a 4 percent tip on a takeout order in San Diego. But no one agrees what a tip on a takeout order should be, and about 85 percent of people surveyed don’t tip at all. Even etiquette experts don’t agree on takeout tipping.

Yoder earned just $18 in tips that day because she was filling Christ Fellowship’s takeout order instead of earning tips serving dine-in customers, and she blamed Christ Fellowship. (The church has since made amends.)

But whether the church and Drew Brees are stingy jerks is a distraction. The question we should instead ask is whether Outback was wrong. That is, did Outback let down its employee?

Yoder and Outback had an employment contract. It’s not a lengthy formal one like Brees has with the Saints, but it’s the same in the sense that it should be clear, mutually beneficial, and voluntary for both parties. In restaurant serving the agreement usually includes a base wage plus tips. And great tips depend on great service, which pays off for both employer and employee: servers earns more, customers return, and they tell their friends.

Such contracts include responsibilities and expectations on both sides. Servers work for a low base wage, but they also expect to earn tips. Employers let servers earn tips, and employers pay the base wage. When employees are reassigned from duties that earn tips to ones that don’t, then the employer has altered the implicit agreement and would be wise to compensate employees accordingly.

Making such a modification to the agreement doesn’t have to be complicated. Servers could continue to receive their base plus tips when they are serving diners. And savvy employers will ignore this arrangement and pay a higher fixed hourly rate when workers are filling takeout orders and cannot earn tips.

In fact, Florida labor law already does this — albeit at a low rate. The minimum wage for tipped employees is $5.23, but they are guaranteed the state minimum wage of $8.25 even when their tips are low. In Yoder’s case, she should have been paid at least $8.25 an hour for the time she spent filling Christ Fellowship’s order, even though she might have earned more serving dine-in customers. Yoder’s frustration is understandable since her employer required her to do work that was less profitable for her.

If Florida restaurants pay the $8.25 minimum for non-tipped tasks, they are complying with their minimum legal obligation. However, restaurants that want to retain top-performing servers should refrain from pulling them away from tipped duties, and consider paying them something more generous than the minimum wage when asking them to fill takeout orders. Such a strategy will promote goodwill among employees, and reduce their desire to shame customers like Christ Fellowship for not paying tips nobody agrees about. Everybody wins.

DANIEL L. BENNETT and VICTOR V. CLAAR, TALLAHASSEE

Editor’s note: Daniel L. Bennett is a research professor at the Baugh Center for Entrepreneurship and Free Enterprise at Baylor University; and Victor V. Claar is the BB&T Distinguished Associate Professor of Free Enterprise at Florida Gulf Coast University.