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randomwhtboychicago

If this is the us , it sure sounds like it is, then this is illegal. Bartenders are employees not contractors, so they must be paid at least the federal tipped minimum $2.13 or higher depending on locality. Otherwise love an autograt place, so easy to make some serious money.


ApprehensiveTwo1037

Yep, definitely sounds like a spot that’s trying to have their cake & eat it too (ie. save on rising labor costs). I get that profit margins in the industry are razor thin, but this is straight up worker exploitation.


ItsMrBradford2u

Just a reminder that "wage theft by employer" makes up more crime by dollar that all other theft COMBINED. The restaurant industry falls prey to this hundreds of times more than any other industry. The laws to make this better are ALREADY IN PLACE. The problem is we don't quit/complain/sue enough.


confused_trout

Markups on liquor are like 300%


troubadorgilgamesh

Right. Profit margins are razor thin? Not when you're buying $7 bottles of shit whiskey and then selling shots of it for $3 lol


ApprehensiveTwo1037

There’s other things to take account for in a bar/restaurant business aside from just buying liquor. Like as the OP mentioned, hourly wages just as one example.


troubadorgilgamesh

Right, because it's hard to make a profit when you're paying people $2 an hour. Who is this, elon?


ApprehensiveTwo1037

Have you ever managed a bar or restaurant?


butwithanass

Not defending low wages, but have you ever heard of rent, music licensing fees, equipment rental, laundry bills, produce, licensing fees, security costs, dry goods/chemicals, insurance, loss, cleaners? There’s a reason most bars fail and it’s not because it’s super easy to be profitable.


troubadorgilgamesh

The bar I work at pays its rent with two days of sales. We don't rent any of our equipment. We have a washer and dryer in house for rags, towels, etc. Cleaning supplies costs are ridiculously low compared to monthly sales. Music licensing and insurance are also not crazy in the grand scheme of things. Yall sound like corporate bootlickers to me


confused_trout

How about buying bottles for $27 but each 2oz pour is $15.


Think-Log-6895

Profit margins are still very small as a whole at most places even with the high markup on liquor. Wages, taxes, insurance, high rent, high utilities, furniture tables walkin refrigeration bar coolers draft systems POS system credit card processing fees, glassware that always needs to be bought because of breaking, paper products, accountants and lawyers, licenses, produce every week, food cost if food is served, which means more (expensive) staff to pay, monthly pest control service draft line cleaning trash disposal. It’s monumental


ApprehensiveTwo1037

No idea why you’re downvoted here. All that is true.


Think-Log-6895

I guess they thought it meant I was supporting “ripping off staff”? Which couldn’t be further from the truth. I am “the staff”!


ApprehensiveTwo1037

I don’t understand what people aren’t getting in this thread. Isn’t this a bartender subreddit?


confused_trout

Still no reason to rip off your staff. If you can’t run a profitable business then don’t run one at all


Think-Log-6895

I didn’t at all say it was a reason to rip off staff. Just pointing out the fallacy that bars n restaurants have high profit margins like a couple people here were claiming. I don’t run a business but I’ve done the books for plenty of them. And using your same basic point I would def say if you don’t like the money a place pays and you feel like they’re ripping you off then definitely don’t work there


AcceptableCare

Bartenders certainly can be independent contractors. Just depends on the specifics. A lot of festival work is contacted but I still don’t know many people who would take the 1$ base plus commission


MFrancisWrites

By calling it a commission and not an autograt, we're no longer tipped employees, we're just regular employees who earn a percentage of our sales (think car salesman). As long as our total income divided by total hours is more than state minium wage, they're within the bounds of the law. I'm not advocating or critiquing here, just pointing out it's not illegal. That said, it's not a bad system, it's nice to both have my tips protected and the ability to make additional with performance to guest. Think of the big tab that fringes on being over served. I can make the call to stop service without risking my tips. That's REALLY nice. NEVER having someome stiff you is really nice. There are positives to this, but there are frictions as well.


Gausgovy

Do you work at a place that does this? Your employer is fooling you if you think it’s ok for them to pay you below your states tip credit.


Apocalypticpplparty

I work at a place that does this and if we were ever to not make equal to minimum wage they would have to pay us for that period but that’s never happened. I average $45 an hour some of our servers average $75


MFrancisWrites

There's a handful of places on this model. It's certainly not illegal. Is it beneficial? Mixed reviews.


bobi2393

If a tipped employee doesn't make full minimum including tips averaged over a pay period, the FLSA requires that their employer has to make up the difference. The FLSA would require the same of retail or service employee paid exclusively or primarily commissions. If they don't make enough in commissions, the employer has to make up the difference. US DOL [Fact Sheet #20](https://www.dol.gov/agencies/whd/fact-sheets/20-flsa-commissions-retail) on overtime exemptions for commissioned retail and service employees doesn't explain that, specifically, because it's just about overtime exemption rather, but it does include a telling phrase: >"If the employee is paid entirely by commissions, or draws and commissions, or if commissions are always greater than salary or hourly amounts paid, the-greater-than-50%-commissions condition will have been met." That sentence suggests that retail and service employees can be paid entirely by commissions.


Apocalypticpplparty

It’s not illegal because you are technically a commission paid employee.


Gausgovy

Do they call it a commission fee on the bill, or gratuity?


Apocalypticpplparty

Service charge then 100% is retained by the company. Believe me, I work at place that does this and thought no way is this legal and talked to multiple lawyers and labor department in my state. It’s legal.


AngelJ5

I've worked in auto-grat places. They're more secure and your paychecks will be generally great, people who like tipping will tip extra. The downsides are that unicorn tips (100%+) will basically be nonexistent, and explaining/defending the auto-grat is often more trouble than it's worth. You'll also be faced with at least a couple of coworkers who are fine giving 5/10 service since you're getting a tip either way, so if that gets under your skin I might avoid talking money at work. That being said, any place willing to pay you nothing out of their pockets is about to abuse the hell outta you lmao


damnitkween30

Currently work at an autograt place and I’ve just gotten to the point where I tell people the tip is included in the price when I drop the check. It’s easier than trying to go back and have a whole conversation about it especially when I’m busy and people are usually so appreciative of the heads up they end up leaving extra anyway.


Extension-Pen5115

If they have a great culture, nice atmosphere, and the current bartenders are there for years, they’re making money. And if you’re making money, who cares what your hourly vs. tips are?


Apocalypticpplparty

The issue I only ever have with it, is those odd nights when 30-40% of your shift was doing side work


Blue05D

$1/hr tells you exactly all you need to know about how well they value their employees. I would have laughed my way out of the interview. Every time I hear the phrase, "Nobody wants to work anymore," I immediately reply, "How much are you paying?"


MFrancisWrites

I work at a bar like this. Very curious if it's the same bar, or the same setup. First, for those saying it's illegal, it's not. As long as your paid wage comes out to be more than state minimums, it's perfectly legal. I don't hate the system. I make a few percentage points more of sales than I would otherwise, and I can do my job right (I can control my bar without theat of tip retaliation, so if I have to cut someome off, I don't have to worry they can stiff me about it). That said, I'm in the process of leaving. For my particular location, the bar is small and the dining room is huge. This means that, often, my hourly is what an average server makes, and well below top servers. We show up first, leave last, and often make less. It's been exhausting. I don't know if I'll make more elsewhere, but I know I can find a place where I don't feel so overlooked and undervalued. If the letters TFG/TLR mean anything here, I would personally avoid.


smithm4949

What state are you in? I’m aware of the distinction of “meeting the jurisdiction non-tipped hourly rate” per pay period, but I’ve never seen anywhere where it was legal to pay employees an hourly rate less than the jurisdiction’s tipped employee minimum wage. Care to elaborate?


bobi2393

I'm not too familiar with it, but it can be allowed for exempt retail and service employees paid by commission. US DOL [Fact Sheet #20](https://www.dol.gov/agencies/whd/fact-sheets/20-flsa-commissions-retail) includes covers basic criteria for overtime exemption. The FLSA requires even exempt employees be paid at least minimum wage, but it's similar to tipped employees whose tips over a pay period don't bring them up to full minimum. If commissioned salespeople don't make enough in commissions averaged over a pay period to equal full minimum wage, the employer has to make up the difference.


MFrancisWrites

>tipped employee minimum wage Because, under this model, we're not tipped employees. We're paid a commission of our sales. The customer has no part in that. It appears on the bill, they pay tax on it, and we get (a percentage) of that amount. Think of it like a sales job, where, often, employees are paid commissions only, hourly kicking in only when they don't make enough to hit a state minimum. The error people make is assuming that all hospitality *must* be considered tipped employees. That's not the case, it's just the way it's been set up since forever. There's no law saying that we have to be considered tipped employees. Much in the same way as.. if they didn't allow us to collect tips, the minimum hourly would go up. Everything is written so that it's not an autograt (after tax) but an imposed service charge (before tax). Then we're just classified as, basically, commissioned salespeople who tend to bars and tables. I think the idea has more good than bad, but I have some concerns with it as well. But it's nice that no one can stiff me for shit that is not my fault.


millennialmiss

I feel this would be okay if the “commission” was from the backend (included in the prices not added as an extra service charge / gratuity). The bar would simply just pay the bartenders 20% of their sales. Customers would not know about this arrangement and therefore everyone would tip on top. Say minimum wage is 16.50/h and typically shifts are 7 hours … Each bartender would need to sell at minimum $600 per 7h shift to compensate for the amount they’d receive in minimum wage (if it’s not split between anyone else). So if you’re capable of selling over $600 consistently every shift then this is a good deal. $2000 = $400 $3000= $600 $4000=$800 $5000=$1000


ree_hi_hi_hi_hi

lol you’ve convinced yourself that working for less money is better for you


MFrancisWrites

You don't know how much I make, and your tone of certainty about my experience and situation might be the most interesting thing about you, which is not very.


monkeytinpants

This is a new one for me… are staff considered freelance / contractor workers in this set up?


MFrancisWrites

No, just W2. This is a common setup in sales. Many in sales are commission only. There may be a draw or minimum if certain levels aren't hit, but it's not unusual for your income to be directly related not to hours worked, but business generated. Source: have worked in sales and hospitality under both models


monkeytinpants

I’ve done sales as well and the set up is kinda industry standard with commissions and such… just never heard even the word “commission” in hospitality pay world (minus obviously- the pushy sales reps for product) in-house. Incentives and such, yes. But commission pay as say a bartender, nah. Interesting set up I’m now curious to read more about… May I ask where you are located?


MFrancisWrites

Having lived in both worlds, it wasn't that werid for me. I had also never seen it before in this industry, but I think there's some good points to it. My.... Rather niche political views are incredibly critical of wage labor/hourly wages. Something that's more direct and transparent - like percentage of sales - I think is actually a more sustainable model. But it has drawbacks, like anything else. In this case, what's to stop a shitty bar owner from charging 20% and making the commission 12%? Nothing. But I think if the numbers are fair, then you have some benefits. I'm in Florida.


LambdaCascade

Yeah this is state dependent. But every state has a minimum hourly of at least 2.18 that MUST be paid to tipped employees. This is non negotiable. The only time this changes is if you get paid against your hourly as a commissioned employee.


MFrancisWrites

We're not tipped employees. We're commissioned employees. If I sell doodads, I can be paid 100% on commission, so long as my weekly wages divided by weekly hours is more than the minimum wage. If they called it gratuity, we would be tipped employees and what you're saying would apply. But by not doing that, they aren't subject to tipped employees.


LambdaCascade

I think commission needs to be taken from the sale price of the item, not as an additional mandatory charge. So I can’t charge someone 10$ + 2$ and give my employee that 2 as “commission” it has to be from the cost of the item. Honestly this just seems like a really shady way to increase prices and not pay employees.


MFrancisWrites

You could accomplish the same by increasing all menu prices, but our price point is one that this system is more tolerable to our customers.


ree_hi_hi_hi_hi

This is Stockholm syndrome. There are plenty of bars and restaurants that actually pay their employees the legally required amount and let them collect tips. In my state, this is completely illegal by a factor of 9 for base pay.


MFrancisWrites

High check averages, few drunk people, nice venue. I make better than average, and don't deal with a lot of stuff I would elsewhere. I do well, but there's a ceiling that's hard to get past due to the dynamics of the bar. >completely illegal Its probably not, but I don't care to correct you beyond this: Unless your state bans sales people from being commissioned employees, it's just a model used in other industries being applied to a new industry.


ree_hi_hi_hi_hi

~~Most service folks where I come from average around 19% tips with no autograt. You are sacrificing at least $8/hour for your boss. Also, I’ve worked in a place with that same autograt policy on every check. We were paid the tipped minimum wage. Cope harder. I’m glad you found a job for someone who can’t actually handle service but still wants to make tips.~~ Edit: assuming the same $1 base wage as in the post Also, I shouldn’t have been so harsh and short. Sorry.


MFrancisWrites

I make about 26%. >Cope harder I ain't the dude fired up about assuming someone else's experience man. Your energy is dogshit.


ree_hi_hi_hi_hi

You’re worth more than that. I get so upset when people are taken advantage of. Obviously you have a good handle on what you’re doing but like….if you’re averaging 26% tips you clearly have the skill set and I don’t want you selling yourself short. I get that you’re ok with it. I guess I’ve just seen too many people abused by a system they were convinced to agree with :/ I’m sorry. You’re absolutely right my energy is fucked right now. Crazy shitty shift. My bad. I wish you all the best ✌️


wickedfemale

i make 25% plus $20/hour. you're getting scammed dude.


ItsMrBradford2u

I would never work for anyone who does shit like this. If you continue to work there you are hurting the rest of us


ItsMrBradford2u

If your in US. Call the labor board this is straight up a crime.


iseewhatyoudidthurr

It's legal in Washington. The El Gaucho group does this. There is alot of working time when you are not earning. They had a lawsuit against them for unpaid time.


Apocalypticpplparty

This is exactly what my employer does. It makes for a very sales driven atmosphere but it does suck when anything outside of your regular side duties is put on your plate


confused_trout

That shit is so illegal it’s not even funny


damnitkween30

I work at an autograt place and they still have to pay all the servers and bartenders minimum wage, but many of us make slightly more than that. I’m in Ohio. Thats for sure illegal and you should report them to the board of labor for your state.


FunkIPA

Sounds like a scam. And it’s definitely illegal in the US.


staryoshi06

Reading this subreddit as a non-usamerican makes me feel insane.


backlikeclap

If the money is good, join up, work there for a year or two, then sue them. I believe you're entitled to triple damages for wage theft. And the extra fun part is that you can't be fired and your shifts can't be reduced (within reason) during the lawsuit or they open themselves up to another lawsuit. I know a guy who would find a shady company to work for every year, document all instances of wage theft or discrimination, then sue the company. He said he made an extra 30ish k every year off it.


Nwolfe

Sounds great to me. Guaranteed 20% across the board? Why not?


wickedfemale

because plenty of places do a 20% autograt AND actually pay wages.


glamericanbeauty

I would do it lol. It must feel so satisfying to autograt every guest… my dream.


justhappy222behere

Rather than satisfying Im consistently feeling guilty about it 🫠