Every U.S. restaurant owner must decide whether the servers keep their own tips, pool and split them, or share them voluntarily with other workers. With few legal restrictions, restaurants are free to distribute the tips however the owner prefers. So which one is the best for business? This is not just a question of preference. Every option involves some costs and some benefits, some risk and some reward, but no one method is always best.
Approximately 3 million U.S. workers, predominantly food and beverage servers, rely on tips for the majority of their income, so the distribution of those tips directly affects their earnings. Restaurants, however, must consider the other potential effects of their tip policy. Employee morale and turnover, labor costs, and customer service are all related in some way to the servers’ tips. Therefore, each restaurant must carefully analyze the available options and their potential consequences. This article provides a framework for a strategic decision.
READ THE FULL ARTICLE BY BILL WERNER IN THE SUMMER 2025 EDITION OF GAMING & LEISURE MAGAZINE.