Barista pay: sub-minimum wage
I have always been under the assumption that the position of barista commands at the very least minimum wage, and preferably a dollar or two more per hour regardless of tips. However, I've found out that some shops are paying baristas a dollar or two under minimum wage (in the same fashion as paying wait staff), making them more reliant upon tips for a livable wage.
What are your thoughts on this? Is sub-minimum wage for baristas okay if tips are consistently significant enough?
Replies to This Discussion
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Permalink Reply by Mike McGinness on
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In some States (and Federal) it is legal to count tips towards minimum wage. Not saying it's okay, just legal. Whether it's okay or not depends on a multitude of factors not the least of which is what a person agrees to when hired.
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Permalink Reply by Jay Caragay on
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Well, considering that the grand majority of "baristas" out there deliver very little, perhaps that level of compensation is appropriate?
I'm not a fan of tipping. In fact, I'd prefer to eliminate tips altogether and pay staff a proper wage. However, people (both in front of and behind the counter) insist on tipping and if servers make a good living off of tips, then why not baristas? Of course, this requires baristas to get their act together, learn their product and present themselves in a respectable manner (to the people, not their peers - and yes, this means bathing regularly).
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Permalink Reply by Jeremy Meiss on
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Completely agree Jay - we do start our baristas at minimum wage (Federal is now $7.25/hr) and then they collect tips on top of that, usually an extra $2-3/hr more.
In line with your point about getting their act together, I keep telling our baristas (who do a great job and are better than most I have seen in KC) that tips are a direct result of their interaction with the customer - and it will pay off. It's kinda right inline with a waiter/waitress in that the better service (attentiveness to detail & the needs of the customer, knowledge of the product, positive attitude) you give the better the tip and the more positive experience the customer had which ALWAYS transfers to more customers through your shop....
Still working on the bathing regularly part with a few of them though.....
Jay Caragay said:Well, considering that the grand majority of "baristas" out there deliver very little, perhaps that level of compensation is appropriate?
I'm not a fan of tipping. In fact, I'd prefer to eliminate tips altogether and pay staff a proper wage. However, people (both in front of and behind the counter) insist on tipping and if servers make a good living off of tips, then why not baristas? Of course, this requires baristas to get their act together, learn their product and present themselves in a respectable manner (to the people, not their peers - and yes, this means bathing regularly).
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Permalink Reply by Jonathan Pascual on
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I guess that as a former barista myself, I had the mindset that I deserved to get at least minimum wage - that to pay me less than a McDonald's employee would be an insult. But at the same time, I thought I deserved every dollar in tips that I earned. Is that wrong? I know that at some shops, baristas can get anywhere from $5-$10 extra an hour in tips when it's busy... Should that affect an employer's decision of starting wages at all?
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Balanced by what the local market and economy will bare. I have certain employees I wish I could pay more but can't right now and keep the doors open. Have actually worked out scenarios with two key employees with part compensation "buying" equity in the business. That said my lowest paid least experienced employees are fortunate to be paid the highest minimum wage in the Country plus tips.
John P said:You will command what you're worth.
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Permalink Reply by stephanie crocker on
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I know when I tell my baristas when they start that they have to declare their tips they are always shocked saying they have never had to declare their tips, so I don't know whether legally, with the state, feds or whomever, baristas are considered tipped employees and therefore can earn less than minimum wage legally. However, I do know that my baristas do earn tips and they are required to declare them. And when they declare them I have to pay more taxes. It is their responsibility not mine; however they know that I am checking up on them.
I do know that my baristas who give good service do get better tips.
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Jonathan-
In every way, you deserve to be paid the minimum wage. However, while the minimum wage for non-tipped employees is $7.25/hr, the minimum wage for a tipped employee is something in the four dollar per hour range (I don't know for sure since I don't employ servers per se). One thing to bear in mind is that the McDonald's employee does not collect tips but you do.
Most baristas forget the fact that most tipped employees make a base rate far less than what they are being paid. Add tips to that high hourly wage and a barista in a busy shop can make a decent living.
Should the possibility of making an additional $5-10 per hour factor in the employer's decision making process? Absolutely. If we take a $7.25/hr employee and top on the middle ground of an additional $7 per hour, then the barista is making $14/hr, which is essentially $29,000 per year. Not quite enough to raise a family, but it is a start and a wage that is on par with cooks in restaurants.
To my mind, the goal is to find a way to bring that barista rate up to $12/hr or more, plus tips. However, this requires a stellar location and many other elements that perhaps the average workaday barista is not quite up to the challenge.
Stephanie-
According to tax code, any earned compensation is liable for taxation. This includes tips and monies earned outside of your "normal" salary. It is a major reason why so many people seek tax shelters every year.
They may certainly have never declared their tips, which creates a liability for both them and your company - at least according to the IRS. However, I think there's some discussion about "paying more taxes" when employees declare tips. Certainly, the amount you withhold from their pay and forward to the government increases, but the amount of tax the company pays from its' earnings is not impacted by the declaration of tips. Yes, workmens comp, as well as your medicare and social security contributions increase (as they are based on total wages paid) but your companys tax liability does not.
As far as getting better tips for better service - when I work the bar by myself, I always seem to get better tips!
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Permalink Reply by Brady on
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Jay Caragay said:Jonathan-
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Stephanie-
According to tax code, any earned compensation is liable for taxation. This includes tips and monies earned outside of your "normal" salary. It is a major reason why so many people seek tax shelters every year.
They may certainly have never declared their tips, which creates a liability for both them and your company - at least according to the IRS. However, I think there's some discussion about "paying more taxes" when employees declare tips. Certainly, the amount you withhold from their pay and forward to the government increases, but the amount of tax the company pays from its' earnings is not impacted by the declaration of tips. Yes, workmens comp, as well as your medicare and social security contributions increase (as they are based on total wages paid) but your companys tax liability does not.
I'll agree 100%, and add two things to this, since we're talking about it.
By law, you must declare all of your tips. The "20% rule" and things like it that suggest that you only have to declare some portion are just rumor.
As Jay said, both the employee and employer must declare tips and withhold accordingly. It's pretty risky on the part of either employee or employer to fail to withhold and report tip income. If the employee hasn't reported throughout the year, there will not have been any withholding, which could cause trouble on your return, and will definitely cut into any refund you were expecting.
Taxes are a pain, but the alternative is even worse.
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Permalink Reply by Marek on
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The alternative... is called The Cayman Islands and I assure you... it's not worse :) To chime in, we don't have a minimum wage law but generally we start people between $7.95 and $8.95... keeping in mind... we have no income or state taxes... so the staff get to keep 100% of what they earn.
On the tips side, they used to pool shifts and split by staff... they voted to change this about a year ago... they now pool the day and split between staff... as morning can be busy... evening... not so much...
The no tax thing works all the way around, we spend maybe a dozen hours a month on paperwork... mostly for payroll calculations... a little for medical and pension... both of which we are required to pay BY LAW... if you have employees... you MUST provide medical coverage and you MUST pay their pension contributions.
Makes sense... works... everybody wins...
So... there is an alternative... Just Sayin'...
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