Tips at the Ivy restaurant: Following the money

You’re sitting in a nice restaurant, happy after a good meal, with decent service – and the bill comes. You may tip in cash or add a gratuity to your card. Or there may be a service charge – a non-discretionary tip – added to the bill.

What happens to that money?

Controversy about how tips are handled at the Ivy restaurant on Dawson Street, Dublin, has blown up this past month after a public airing of staff disgruntlement at the restaurant. The high-profile restaurant opened in July. It is part of the Ivy Collection in the UK, a busy, hard-working restaurant, with 243 seats and all-day service.

Employees paint a picture of a lack of trust, unhappy workers and an absence of clarity about how card tips are handled. The figures, these staff say, don't add up

Three Ivy waiters (one of whom has just left) spoke to The Irish Times at length about tipping at the restaurant. To illustrate what they see as unfair practice, they shared their staff manual, job contracts, payslips and WhatsApp group chats with managers.

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They paint a picture of a lack of trust, unhappy workers and an absence of clarity about how card tips – which are the majority – are handled. The figures, these staff say, don’t add up. They believed they would make good money for hard work at the Ivy, but they say this didn’t happen.

The Ivy’s lack of transparency in how tips and service charges are handled seems unfair, a seasoned Irish restaurateur says. Staff find it hard to understand, and they are not alone: more than a week’s research with questions to staff and the restaurant has failed to fully clarify the quagmire of sometimes contradictory information.

Pity the poor customer who is trying to decide if – and how – to give their waiter a tip.

What the staff expected

Waiters were recruited this summer for the new restaurant at a contracted hourly pay rate: most around €10-€11 an hour.

Two waiters say they were told they could keep 80 per cent of any cash tips, and were expected to “tip out” 20 per cent of their tips to bartenders and runners (waiters I spoke to have no issue with this common practice).

Several say they were told verbally that 40 per cent of card tips would be pooled, and divided between all waiting staff; another was told they would get 40 per cent of the tips they generated. The other 60 per cent would go “to the restaurant”.

When pressed on what exactly this meant, the waiters said it was never clear to them, and nothing was written down. Tips are not mentioned in the staff manual. Some of this 60 per cent may go to other staff.

“Lorraine” says she was interviewed for her job as a waiter hurriedly, in an informal setting: “It was vague but it sounded lucrative, [like the work] was definitely of value to a waiter. I was surprised it was so generous – [I was told I would get more than] €11 an hour and 40 per cent of card tips.”

What happened

Waiters’ payslips – a number of which I have seen – have four categories of payment.

Basic: The hours worked at the statutory minimum wage of €9.55.

Sunday premium hours (at a higher rate).

“Tronc” payment: tronc is an established method in the trade of distributing tips. In the Ivy, it tops up the statutory minimum wage to the contracted hourly rate. The Ivy tronc comprises the 12.5 per cent service charge levied on tables of five or more, pooled and used to part-pay wages.

Bonus: A single figure, without explanation. It is a distribution of tips from card payments, but there is no indication of how it is worked out.

In their first payslip, and for at least two weeks in early November, there was no “bonus” distribution of card tips. Many waiting staff were disappointed no card tips were included at all, and their upset is visible in management-staff WhatsApp communications.

Staff messages included: “It’s fine to say calm down, but at the end of the day we are missing hours and tips”; “It’s extremely frustrating and shocking”; “24 hours since out paycheck... still no official word of what happened to our tips”.

When credit card tips were included in later payslips, they were well below what waiters reckoned they were due at 40 per cent of the pooled credit card tips. (When they received their payslips yesterday, Ivy waiters I spoke to had again received no payment for card tips.)

Lorraine shows me her payslips and presents her own calculations. Two weeks in November have no bonus/card tip at all, she points out; in October she worked 65-hour weeks, and the card tip distribution she received that month was €420. “I worked out it was €1.52 extra each hour I worked. That’s not 40 per cent of the card tips I generated.”

“Cristal” says in her early weeks: “I might average €200 on card tips in a night. With 10 waiters, that’s €2,000 card tips.” But “Alan” and Cristal say their share of card tips worked out less than €100 a week, while they each processed more than €1,000 a week.

How it blew up

In late September, says Lorraine, a waiter was “sacked” for suggesting patrons leave a tip in cash. She is horrified a waiter would do this, and says she would never ask for cash; if customers ask about tips, she answers diplomatically that “I get a percentage”.

A management notice pinned up in the restaurant in November went public, accusing waiting staff of “deplorable greed” in asking customers to leave tips in cash rather than on a card. It said due to the “continued inability of those taking card payments to follow procedures and consider the whole team here”, there was “no bonus payments for front-of-house members to share”.

It states in bold type that “from Monday NO WAITERS will ever be allowed to take any payments from guests, there will be a password on the credit card machine and the managers will take all payments, without exception.”

Later it reiterates: “No team member is to ever handle cash or card from a guest.”

The writer of the statement was disappointed that “all the runners, bar backs, bartenders, cocktail waitresses who make waiters’ jobs possible have received nothing”.

What the Ivy says

The Ivy did not offer a manager to discuss the issue for this article, but issued a statement through a strategic communications company.

Credit-card tips, it says, go “towards a shared gratuity per hour that all restaurant staff receive. This is shared across all c 150 staff in the restaurant (excluding management). This is paid in addition to their hourly wage and is guaranteed by the company in that the company will make up any shortfall and is, therefore, regardless of whether any tips are paid by patrons.”

It refers to a waiter requesting a cash tip, which was inappropriate as the company believes “all gratuities should be for the benefit of the entire team”. When pressed they outline three pay elements (as well as Sunday pay):

“A basic hourly rate (which meets minimum wage requirements)”

“A guaranteed additional hourly rate (tronc) is paid to each employee – the rate depends on the job they hold in the restaurant – this is funded by the 12.5 per cent service charge applied to bills of five people or more – and the company covers any shortfall as this hourly rate is guaranteed to the individual.”

The bonus – “the split of all credit card tips received in the prior month – 100 per cent of which is distributed to all staff including front of house, waiting staff, runners, kitchen staff”, excluding management and varying each month.

From this we understand that workers’ contracted hourly pay comprises minimum statutory pay, topped up by money from tronc – the 12.5 per cent service charge.

Basic agreed rates in the Ivy are partially paid from service charges, which are essentially an obligatory tip. This is a practice in some London restaurants, but is not generally employed in Ireland.

Discrepancies

The Ivy says 100 per cent of card tips are shared between all staff, while waiters say they were verbally told they would get 40 per cent of card tips.

On September 12th a head waiter’s message to the group WhatsApp outlined a change in approach to card tips: waiters were to keep note of card tips (excluding service charges) from their tables, and at week’s end the general manager would confirm them.

“This will mean that whatever card tips you make, you get. (Within reason. The % still applies, but it will now be at LEAST 40 per cent from here on in, towards your paycheck).” Waiters say this didn’t happen.

In two recent payslips there were no bonus/card tip payments at all, and the “deplorable greed” notice went up.

Cristal is distraught at the small amounts distributed to staff, while the restaurant “does €40 grand a day”. The waiter says she has seen daily till reads showing €36,000 business; some days they serve 800 people. “Very few people leave no tip; even €2 tips add up.”

Alan describes a great team in the Ivy – “fun, a great mix of race, sexual preference, nationalities”. But “there is no staff morale” and “huge” staff turnover.

Other restaurants

“Put yourself in the shoes of an American tourist,” says Robert Doggett, co-owner of Dublin’s long-established Trocadero restaurant. “They often ask how we do it here. The answer is, everywhere is different. There are no set rules.”

John Healy, general manager of Suesey Street bar and restaurant, and a veteran of the business and RTÉ's The Restaurant, says in his experience good waiters are paid a bit more than minimum hourly wage, while kitchen staff, not in a "tipping zone", are on higher rates, salary rather than hourly wages. He thinks most restaurants pool all tips among waiters.

In Suesey Street card tips go through payroll and are distributed through a tronc points system (based on hours worked and experience or seniority), orchestrated transparently by a manager or senior waiter. A spreadsheet shows the team the tips received and how they are divided. “It is as complicated as tax evasion itself!” he says. Experienced waiting staff get about €11 an hour basic, with tips on top.

“It’s their money. I don’t own that. Tips belong to the people who do the job.” He says to get experienced staff, they need to be able to make money: it’s a matter of fairness. “We’re all in it together, paddling the same way. We need to allow our staff to make money as well.”

Cash tips are few and are pooled at the end of the night between floor staff. Waiters share 75 per cent, and 25 per cent goes to other front-of-house.

The system at the Ivy, he reckons, “sounds slightly unfair”, and he thinks management needs to be transparent and clear about what’s happening with tips.

“In city centre restaurants the work is hard – you are at the coalface. It is full-on, high-octane. You can make money because of tips, but it is stressful and emotionally draining and you earn every penny of your tip.”

The Ivy is a new restaurant setting up, and hitches are to be expected. The Ivy Collection’s established UK system may be working against it in Ireland, as the practice of using service charges to partially pay contracted hourly wages seems not to be common here, quite apart from the staff anger about lack of transparency on tips.

Doggett says: “In fairness, it must be difficult to open somewhere new, serving breakfast, lunch and dinner over seven days, with a new crew. I would hate to be in their shoes.” A lot of money floats around in their restaurant business.

Lorraine says waiting staff are “treated like the golden goose because of our tip generation”.

What do Ivy staff want? Alan: “To shine some light on what they’re doing.”

In the pre-Christmas season, the public spat has certainly opened up the often opaque business of tipping and service charges – and its growing complication in a world of ever-reducing cash.