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Glowbal Restaurant Group owner and former server plan legal action over tips
I saw this article posted on the Georgia Straight today and it caught my attention. While I have never worked in the food and hospitality industry (McDonald's doesn't count) I was hoping some of you who do could possibly shed some light on industry practices for a better understanding. *Edit:* The article is vauge. It does not mention whether the tips are distributed evenly later on (i.e. pay day etc.) so I'm not sure what the problem is. It's safe for us to make assumptions.
TD;DR Version: Former employee who worked @ Black + Blue is angry at the Glowbal Group over tips and owner of the Glowbal is now suing former employee and the CBC for false accusations (slander?)
Quote:
Originally Posted by Michelle da Silva, April 4, 2012
During CBC’s The National on April 2, reporter Kathy Tomlinson investigated how tips are distributed at Glowbal Group restaurants after a former employee filed a complaint with B.C.’s Employment Standards Branch claiming she was required to hand over tips to “the house” after shifts. Now, Glowbal Restaurant Group owner Emad Yacoub has fired back, stating that he will take legal action.
“I have been left with no option but to take legal action against the CBC and Ms. Tomlinson to redeem my reputation and that of my business," Yacoub stated in a news release April 3. "It is curious and unfortunate that Ms. Tomlinson and the CBC chose to air a story based on the false accusations of former employees. It is equally baffling as to why Ms. Tomlinson chose to focus on The Glowbal Group when the practice of pooling gratuities is an accepted standard in the hospitality sector in Canada."
The former Glowbal Group employee, Charlotte Zesati, who worked at Glowbal’s steakhouse Black + Blue (1032 Alberni Street) for a week and a half in November 2011, told the Straight during a phone interview on April 3 that she is in the process of obtaining a lawyer and is hoping to go after a class-action lawsuit.
“I can’t disclose who the lawyer is at this time, but we’re looking at hopefully trying to get more voices out from people who worked for this man because you know, I understand that people are scared,” Zesati, who is a single mother, said. “I wasn’t there long enough to get to know the waiters, but I do believe that there’s got to be someone there that will come out.”
Zesati, who moved from California to Vancouver prior to working at Black + Blue, considers herself a career server.
“I’ve been in this industry for a long time. I’ve been a GM. I’ve been a California realtor. I work really hard to make the money that I make, and it’s taken me a long time, where I can consistently sell a certain amount and maintain a very high tip out because I do care for people,” she said.
While Zesati is currently unemployed, she says that she has had job interviews at other Vancouver restaurants, but declined serving positions because the restaurants had similar tipping policies.
“There’s got to be a good honest guy out there somewhere,” she said. “If not, I’m actually considering going into law school at this point.”
Glowbal Restaurant Group owns seven restaurants in Vancouver, including Glowbal Grill & Satay Bar, Coast, Sanafir, Italian Kitchen, Trattoria, Society, and Black + Blue.
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Quote:
Originally Posted by Badhobz
Yeah. Typical Mainlander Barbie doll.
Her car even smelled nice. Like a mixture of luxury perfume and a hint of….. vag ? Fish sauce ? Something a bit dank
A restaurant server has filed a complaint with B.C.'s Employment Standards Branch against a high profile Vancouver restaurant group because management required her to hand over her tips at the end of shifts.
"The last night I worked I made $320 in cash tips, and I walked out of the restaurant with not a penny in my pocket," says Charlotte Zesati.
"The manager wouldn't let me go until I put [some cash from tips] in the envelope … faced this camera in the office and put it in the safe."
Zesati says that happened after she'd already cashed out and split some of her tips with the bartender and busser. She had given each of them cash equal to one per cent of her sales.
She says she was told the money she had to put in the safe would go to "the house."
"I asked [the manager] who was getting this ... I was pushed aside, told, this is how much you have to pay."
Zesati is a single mother who recently moved to Vancouver from California. She worked briefly at Black + Blue, a high-end steakhouse owned by the Glowbal Group, which runs seven prominent Vancouver restaurants, with the others being Glowbal Grill, Sanafir, Coast, Italian Kitchen, Trattoria and Society.
Server got less than half Records show a manager later gave her $124 back — for her $320 night — which is less than half of what customers tipped her.
"I have never experienced that. And I have been working in this industry for over 20 years now," said Zesati. "For me, it's food on my daughter's plate. For me, it's clothes on her back. It's more than, you know, tips."
Zesati says after she quit, she learned all servers had to pay a "house charge," equal to 4.2 per cent of their net sales, on any given night. She said Black + Blue's general manager told her the money is later distributed to other staff, including managers.
To the customer, that means if they leave a $15 tip on a $100 restaurant bill, $4.20 of that tip goes to "the house," not to the staff member who served them.
"[The general manager] said the day before they did $47,000 in sales. If you times that by four per cent you've got yourself about $2,000 in one day going into that kitty," Zesati said.
After she complained to the owners, the Glowbal Group mailed her a cheque for the full amount she had handed over. "They actually just as quickly as possible sent a cheque in the mail," she said.
CBC News took a hidden camera into Black + Blue, and asked staff, as any customer might, what happens to the tips. We were also told servers must pay a percentage of their sales — out of their tips — to "the house."
Glowbal beverage manager Chris Ballas told us: "They tip us [the bar] out one per cent. They tip their busser out one per cent, and then 4.2% to be exact goes to the restaurant."
When asked where that money ends up, he said, "That goes to ... the house. Staff parties. Breakages. That kind of stuff. So that's to account for variable costs," he said.
He told us glass breakage costs at Black + Blue are $2,000 a month and "that's where that kind of stuff [tip money] goes."
Described as 'kickback'
Then he added: "It's a kickback. Let's be honest … kickback or grease … or whatever you want to call it … they [servers] have to give the restaurant for the entitlement or the privilege to work within that restaurant."
He told us the practice is industry standard, at least in B.C. "All Glowbal sites. And I'm pretty sure ... I'm pretty safe to say all of Vancouver."
CBC News then sent a woman into several other prominent restaurants, posing as a server looking for work, to ask what happens to tips.
At the Keg, Cardero's and Joey's, managers said the money is pooled among staff based on a percentage of sales ranging from 2.5 to 5.5 per cent.
Unlike at Glowbal restaurants, though, we were told the business doesn't oversee the tip pool and managers don't take a cut.
B.C. employment standards law states restaurants can't use tip money for business expenses. Federal tax rules also dictate that if tips are "controlled" by the employer, if management collects and then redistributes the money, it is taxable and EI and CPP must be deducted.
Glowbal Group owner Emad Yacoub insisted none of the cash handed over by servers is kept by him or the company, so he does not report it as income.
"I don't keep a penny of it. We don't keep it … I have never, ever kept one penny of the tips for the restaurant."
He explained a manager, who is also a relative of his, picks up the cash from the restaurant safes every night. The cash manager then divides it up, according to set percentages, and distributes all of it later to hostesses, runners, kitchen staff and floor managers.
"We have one person that handles all the cash for all the restaurants," Yacoub said. "When it gets counted, we have on the record how much was the tip-out and how much goes back to everybody."
Yacoub said the restaurant handles the tip money on behalf of staff, simply to make sure everyone gets their fair share.
"What we do is we just take it and give it to them," he said.
We then showed him the hidden camera tape of one of his managers calling the tip practice a "kickback" that goes to "variable costs," like breakage.
"We have never charged any of our staff for breakage or staff parties. We have never kept any of this money. I give it back again to all the staff that work that night," said Yacoub.
"I cannot explain [what the manager said] but I am telling you from the owner of this company … 100 per cent of it goes back to everybody."
Yacoub also insisted since the company doesn't "control" the tips, as tax rules prohibit, a server could refuse to pay the house charge if they wanted to.
"I would tell her, just tell the people you are working with that you don't want to share with them," he said. "I don't decide how it's divided up."
After his boss saw him on the hidden camera tape, Ballas called CBC News and insisted that what he told us when we spoke to him as a customer in the restaurant was all lies. The manager said he was just "talking trash" from behind the bar.
He also said when he realized how much trouble he may have caused the business, he offered to resign, but Yacoub refused to accept the offer.
CBC News then contacted two former high-level Glowbal Group managers, who had invested in the company and worked there for a significant period of time. One left because he had a falling out with Yacoub, and the other just moved on.
They both agreed to talk about the tip system under the condition they would not be named. Both said they had firsthand knowledge that Yacoub "pocketed" some of the money.
"Emad [Yacoub] does keep it. He would probably keep half," said the disgruntled former manager. "It never touches [restaurant] expenses. It is used as cash."
Both sources told CBC News some of the house charge is given back to floor staff, as Yacoub indicated. However, they said those staffers received set amounts no matter what sales were – like $40 per hostess, per day.
On a good week, the former managers said after staff got their cuts, there was a lot of cash left over.
"Emad's cut is determined by whatever the profit is in tips," said one.
They also said servers had no choice but to pay the house charge. "Even if they were short [on tips] they had to pay out of their own pocket," said one of the ex-managers.
Yacoub said Glowbal Group's restaurant income for 2011 was $26.7 million, so the 4.2 per cent house charge to servers would have been approximately $1.12 million that year.
The disgruntled former manager suggested Yacoub may have kept up to half a million of that, in cash.
"The tip thing is huge. It becomes huge money by the end of the year," he said.
Yacoub responded to the allegation by explaining that during busy times, any extra cash left in the tip pool – after each employee got their set amount – is kept as cash on reserve. He said it is then drawn on later during slow periods to make sure staff still receive their set amounts.
"This system is set up to create stability and fairness to the all the support staff, regardless of the month or work week, so they know themselves the approximate tips they are to receive per shift worked. This also motivates them to work any shift per week without requesting only the busy shifts," Yacoub said.
He said sometimes the business goes into a deficit to pay staff. For example, he said last week staff at Italian Kitchen received a total of $6,100 from the tip pool, but the average house charge collected from servers each week is $5,000.
Yacoub repeated he doesn't keep any of the tip money, regardless of how good the sales are, and he has records to prove that.
"This system was set up in a way that every single penny that comes in is accounted for and every penny that gets paid out is signed for by all the staff," said Yacoub.
One of the former managers said when he worked for Glowbal, slow times were quite rare. He said, the few times it was slow and there wasn't enough to pay staff out of the tip pool, Yacoub would hand over cash from his pocket to make up the difference.
"He had rolls of cash in his pocket and he always tried to pay for everything with cash," he said.
B.C Minister of Labour Margaret MacDiarmid said Zesati's complaint about Glowbal Group's tipping system will be investigated.
"Tips cannot be used for business expenses," said MacDiarmid. "If there's money owing an employee, they [investigators] will leave no stone unturned to get that money."
"I hope if there's anybody else out there that's suffering through this, that it comes out," said Zesati.
The CRA just hit jackpot. Imagine all the undeclared incomes for the owners, businesses, and servers. And worst of all, the owner claims he has records to prove it
Last edited by jackmeister; 04-04-2012 at 04:53 PM.
^as someone who spent 7 years working in nightclub, there is a "house" tip at most establishments that involve tips.
It usually goes to the managers.
It's real scumbag IMO. Glad I don't work in that industry anymore.
Don't believe anything the owner is saying. I know the ins and outs. Glasses get ordered by the case and come in big brown boxes shipped from china.
The tip money outright lines there pockets tax free.
ps, when I did my time as a busser, we got tipped out 1% of sales SPLIT 3 WAYS. The manager would also recieve a 1 percent tip. So if bartenders sold 30k~ we would get 100 dollars each and the manager would get 300.
which is garbage.
Bartenders would walk out with anywhere from 300-1000 a night (depending on the night) and bussers would walk out with 60-100 a night. I don't see how it's fair. Fucked up industry.
shiiieet that messed up for sure! If we give the server straight up cash couldn't they just pocket it and not tell their manager? Either way I would think its a lose lose situation. Manager would ask where your tips at foo? then server would say didn't make any...I would assume the server would get fired for not making any "tips"...
when i was bussing and porting at stone temple and Tonic i was walking out with a minimum of $150 a night plus my wage
eh, I made my dues. When i worked in the bathroom, I was making the most money in the club.
When I decided to get out, I was promised that I would "move up fast", created a lot of drama, the hours were brutal and just wasn't making enough anymore. My sleep was all fucked up and I gained weight from eatting so late at night.
Glowbal runs an amazing chain of high end restaurants. The servers all make fantastic money because of Emad and Shannon's hard work. Each individual has the right to work where they want. This is just some individual that has too much bark !!!
On the other hand though, if the tax implications are true, then there is some issues that might have huge repercussions.
excactly. Nightclub logic. Thats why I'm glad I don't work for one anymore.
I don't know which nightclub you worked at but I got to know a bartender so well that he would pour me rows and rows of shots and he would always charge me a flat rate and/or I would just "tip" him $100 for it which is a lot cheaper than paying the establishment...
Glowbal runs an amazing chain of high end restaurants. The servers all make fantastic money because of Emad and Shannon's hard work. Each individual has the right to work where they want. This is just some individual that has too much bark !!!
On the other hand though, if the tax implications are true, then there is some issues that might have huge repercussions.
You are currently viewing our boards as a guest which gives you limited access to view most discussions and access our other features. By joining our free community you will have access to post topics, communicate privately with other members (PM), respond to polls, upload content and access many other special features. Registration is fast, simple and absolutely free so please, join our community today!
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