You invest a large portion of your time ensuring that your customers are all enjoying themselves when dining with you. The painstaking effort and investment of time that goes into every menu item, place setting, and lighting fixture are evident in the satisfaction that your customers express to your hostesses and in internet reviews. You should be feeling on top of the world, except for a potentially smoldering ember that threatens to smoke out much of your hard work. This is why you need a solid restaurant tip sharing policy.
Maintaining harmony among your staff can be just as important as creating an engaging and friendly dining atmosphere. When your staff is fully engaged, not only will they provide better customer service while on duty, but they are more likely to sing the praises of your restaurant when interacting with your community. Unfortunately, many restaurant owners view staff as being disposable or easily replaced and that’s demonstrated in the area of tip sharing.
Understanding the Impact Tip Sharing Has on Job Satisfaction
Far too often, we see restaurateurs grossly underestimate the impact that tip sharing can have on their employees. They make false assumptions, such as the kitchen staff does not face the customer, or that bartenders are tipped by those sitting at the bar and should be fine. Despite these assumptions, it is known that all of your staff are part of a smoothly operating assembly that can quickly breakdown if one small part of it is neglected.
Tip sharing is an easy way for the entire staff to show appreciation for what their other teammates do in order to keep the flow of meals running smoothly. With tip sharing in place, employees feel valued in both the work that they do and by their coworkers, promoting a sense of teamwork across the board. And, tip sharing can lead to increased staff retention rates, giving you the advantages that come with staff continuity and saving you time from hunting for replacement workers.
Gauging what is Fair is Not Only Good Business But May Be the Law
Tip sharing is not just for promoting worker continuity and teamwork; it may be the law in the area where you operate. In 2018, the government signed into law a bill that rolled back federal restrictions around tip sharing. On a state level, the State of Arizona requires tip sharing, while the State of Minnesota bans the practice. The State of California, while allowing tip sharing, does so with heavy regulatory oversight.
You must take the time to understand not only what federal and state-level labor laws dictate about tip sharing, but also local regulations as well. In turn, this will provide clarity around what you can do to implement tip sharing in your restaurant, but will also provide a blueprint around how this needs to be accomplished in order to stay on the good side of any legal aspects in place.
Innovative POS Software Provides Accurate and Transparent Record Keeping
Determining what tip amounts need to be distributed requires a high level of accuracy. Tax and regulatory implications are at stake, as is a sense of transparent fairness to your staff. The days of spreading out tip jar change across the counter and dividing it up in a “one for you” manner has long passed. You will need to be able to tally and distribute both cash and digital tips in a seamless way that meets all regulatory restrictions that are in place.
This makes it imperative to leverage a next-gen POS solution to handle these processes. Transaction logging can easily track digital tipping rates. Advanced payment processing can separate tips from meal and drink charges, making it easier to move funds to the appropriate staff members. And, innovative automations make adding shared tips to payroll and accurate tax withholdings happen seamlessly and with precision.
Developing a Restaurant Tip Sharing Policy that Checks all of the Boxes
Armed with the required legal knowledge and an effective POS software solution to manage things, you can begin to draw out the blueprint for what tip sharing will look like in your restaurant. Customizing what it is you need to keep tabs on is the critical next step you need to fulfill your staff’s expectations and to introduce a restaurant tip sharing policy based on fairness and encouragement.
There are a number of items that you will need to accurately track in order for tip sharing to have a high degree of success in your restaurant. These include:
- Encouraging the accurate reporting of cash tips by servers, wait staff, and bartenders. This builds accountability, transparency, and trust in the tip sharing process.
- Utilizing sales transaction logs to mine data. This will give you accurate information about all tips given, including the tracking of tips per individual server. Not only does this make the tip sharing process more transparent, but it gives you a sense of who your top performers are on the floor, versus those that may need additional training.
- Introducing cash belts for those on the floor. Servers and bartenders can start the day with a certain amount of cash in the belt. In turn, anything that comes back to you can be withdrawn from the cash belt, leaving the server with the starting amount of cash plus tips acquired. The tips can then be removed, making cash tracking easier.
- Consider promoting a cash–free environment. By gently promoting and insisting on card-based or digital payment methods, you remove the inaccuracies that surround cash transactions to create a solid foundation that your restaurant tip sharing policy can be based on.
An affordable, cutting-edge POS software platform will make it easy for you to track and manage all of the data involved in making tip sharing a successful initiative. While performing an assessment or upgrade on your own is possible, you run the risk of missing some key features that could lead to a regulatory mess down the road.
Developing a Straightforward Restaurant Tip Sharing Policy Requires an Experienced Hand
Operating in a world where job loyalty feels non-existent while financial and legal pressures mount can take the joy out of running a restaurant. You want to achieve a peaceful, harmonious dining environment from top to bottom, but how can you if the staff comes and goes? Tip sharing is a great way to tighten your team into one cohesive operating unit that will provide advanced customer service to your diners.
Once introduced, the positive effects of tip sharing will not go unnoticed by your clientele. Friendlier and empowered servers, a wider smile on the face of your host or hostess, and a sleek and smooth running POS platform will endear you to anyone joining you for a meal. Achieving this high level of success requires being in possession of expertise, both in the technology platform you choose and of what legalities apply to you.
Engaging talech gives you more than just a POS solution provider. We utilize our restaurant and POS technology expertise to design a tip sharing solution that is perfect for your business. Reach out to us today to sign up for a free demo and find out how we can help you to create the perfect fine dining experience for your customers.