or "A None-Too-Modest Proposal"
Based on my admittedly non-scientific observations, a shockingly small number of people understand how tipped employees are paid. They usually don't understand that, in most states, these employees are paid less than the federal minimum wage, in most states they're required to give some of their tips to other employees, and in most states, they can be paid less than minimum wage even when they're doing work that does not generate tips. That fact that this is not widely understood is the only thing that allows this system to persist.
In most states, the tipped minimum wage is $2.13 an hour. This number hasn't changed in about 30 years now. Technically, the employee is still being paid the local minimum wage, but the employer gets to count $5.12 an hour of the employee's tips as "wages." If the employee fails ot make $5.12 an hour in tips, then the company must make up the difference. What all of this means is that the first $5.12 an hour a tipped employee receives in tips doesn't really go to the employee it all. They go towards keeping the employer from having to pay minimum wage.
Then, there's a little gem called "tipshare." This may sound like all the waiters rounding up their tips and dividing them up, but that's not it at all. There are "indirectly tipped" employees who work in restaurants. The busboys, the hosts, the bartenders, and food runners can all be indirectly tipped. What this means is that the company will take a percentage of a server's tips (15-20% usually) and redistribute them to these other employees who are also receiving less than minimum wage. so, when you're tipping your server, a chunk of that is going to pay the wages for other employees to bring them up to minimum wage.
Finally, servers can be required to spend up to 20% of their hours at below minimum wage doing work that doesn't generate tips. They'll be required to do 'sidework" which usually consists of cleaning or doing prep work for the kitchen at a rate of $2.13 an hour.
The net of this is that servers make far less money than most of the public might imagine. Let's look at a server who makes $10 an hour in tips and works a five hour shift. Many people believe that this would mean the server is doing quite well: $7.25 an hour for minimum wage, so $36.25 in wages, plugs $50 in tips. That's $86.25 for five hours of work. Not bad!
That's not quite how it works, though. One of those hours is spent doing sidework, so that's $40 in tips. $8 is given to other employees as "tipshare." $25.60 is considered "wages" to make up for the fact that the employee is making less than minimum wage. So, it's $36.25 in wages plus....$6.40 in tips!
I'm not saying that this is wrong...well, OK, I'm saying that's it wrong. But my point is that the only reason this system survives is because so few people understand how it works.
Here's what I propose: A law that requires companies that pay their employees less than minimum wage to post their policies on the door. What is the lowest hourly amount an employee is paid. How much do servers pay into a tipshare pool, and who receives it. If a company is going to take advantage of subminimum wage, they need to be transparent about it.
My hope is that this would become a selling point for companies that pay their employees a decent wage and don't require one set of employees to pay the wages of another. Of course, I also hope for world peace and a jet-powered unicorn and I'm not holding my breath for those, either.