Wild Goose and Good Neighbors Meeting House employees picked up picket signs this week to dispute, in part, the dispersal of tips among the whole staff. It's a conflict that reflects how tips have evolved from a reward for a server's good work to a key funding source often split among groups of employees.
Wild Goose bartender Michael Smith was among employees and their supporters, about 50 people total, who stood on the corner of Tejon and Boulder streets downtown last week with signs calling for fair treatment of workers. Some of those same employees put down their signs and went into work alongside staff who chose to sit out the demonstration, he said.
The picketing was organized after about 19 staff members from both restaurants signed onto a list of grievances given to the owners that included splitting tips among all employees — servers, bartenders and kitchen staff alike, Smith said. Before the tips are distributed many employees, including servers and kitchen staff, earn $9 an hour, 2 cents above Colorado's minimum wage for a tipped employee, he said. Colorado's minimum wage is $12 an hour for nontipped workers.
If a restaurant is sharing tips with the kitchen staff, it legally needs to pay the entire staff participating in the tip pool a base wage of $12 an hour and notify customers tips will be shared, said Sonia Riggs, Colorado Restaurant Association CEO. Managers and supervisors cannot participate in the tip pool, she said.
Wild Goose co-owner Russ Ware said he believes his kitchen staff is eligible to receive tips because after customers order at the counter, the kitchen staff brings food to the tables and asks customers if they need anything, duties typically done by servers.
There are some restaurants where all employees directly and consistently interact with customers, and in that case sharing the tip pool with everyone can be acceptable, but it's not common, Riggs said.
Smith said employees concerned about the wages and other working conditions just want to see ownership make equitable changes. With tips, Smith said he makes $19,500 annually after taxes and he pays $1,000 a month in rent.
"It's not enough," he said.
The dispute at a business that touts its community involvement comes at a time of competing pressures on restaurant owners and workers: a raise in the minimum wage, higher cost of living in Colorado Springs and the COVID-19 pandemic that forced restaurants to shut down or go to all takeout before being allowed to serve a limited number of diners indoors and outside.
As minimum wage in Colorado has risen, pay disparity between the servers and others who received tips and those working in the kitchens has increased leading to more tip pooling, Riggs said.
The minimum wage for servers was $5.29 in 2016 and it's been steadily rising after voters approved Amendment 70.
Restaurants have also faced the rising costs of rent and ingredients in addition to wages, said Greg Howard, board president of the Pikes Peak Chapter of the Colorado Restaurant Association. As a result profit margins have fallen from around 15% to around 5%, he said. The higher costs have also led to higher prices.
Last year, restaurants in Colorado Springs also faced a lot of competition as Colorado Springs' economy boomed and new restaurants got into the market, Howard said. This year, many restaurants got slammed by the coronavirus.
In the difficult environment, many restaurateurs have to balance keeping their cooks and some kitchen workers paid above minimum wage because they are skilled labor and rising minimum wages for wait staff who benefit from tips, Howard said.
Employees recognize the difficulties their industry faces, but, nevertheless, believe the Wild Goose and Good Neighbors has an obligation to them, as well. The business displays liberal signs and has invited liberal groups to hold events at the restaurant, Smith said.
"We want the Goose to live up to the ideals that it says that it stands by," he said.
Ware said he is open to examining the legality of the tip pool, but it benefits employees by allowing him to address a long-standing problem in the restaurant industry — the wage gap between servers who earn more because of their tips and kitchen staff typically earning hourly wages.
"Servers that are tipped usually end up making a lot more money than the folks sweating it out in the kitchen," he said.
The tip pool allows the lowest paid employee at the restaurants to make about $15 an hour, although it can fluctuate, he said.
The restaurant owners will be seeking professional guidance to make sure that their model is in compliance with the law, Ware said. If all the employees ask for a change in how the tips are dispersed, management will make the change, he said.
One of the solutions, some restaurants were turning to even before the pandemic is a service charge on all orders that can be dispersed as needed by the businesses and even out wage disparities, he said.
Ware said his business was supportive of the minimum wage increases, but his businesses like others were challenged. The owners have needed to rely on pandemic relief funding and grants to make it through, he said.
But he said he is open to reforms and expects to hold a meeting for employees of both restaurants on Sunday, he said.
"We have reacted with openness," he said.