Massachusetts Courts Have Spoken: Guidance Regarding No-Tipping Policies

The change in tip jars quickly adds up, and can especially add up in Massachusetts, where the failure to lawfully distribute tips among wait staff employees may subject a restaurant to mandatory triple damages. The Massachusetts Tips Act (Tips Act), with its complexities and nuances, has vexed restaurants throughout the Commonwealth since its inception in 2004. Whether restaurants and franchises permit wait staff employees to accept tips or not, there are important aspects of the Tips Act employers should be aware of.

 The Tips Act prohibits employers from retaining, demanding, requesting, or accepting any tip or service charge given by a patron that is intended for a wait staff employee.  A “tip” is defined as any gift or gratuity “given as an acknowledgement of any service performed” by a wait staff employee. A “wait staff employee” is any employee in a restaurant responsible for directly serving beverages or food to patrons or for clearing patrons’ tables, and who does not hold any managerial responsibilities. Potential violations of the Tips Act arise when a restaurant withholds tips and gratuities from its eligible employees, allows for tips to be pooled with management-level employees, or requires its wait staff employees to share a portion of their tips with non-eligible employees at the end of a shift. The stakes can be high for restaurants to ensure compliance, as a Tips Act violation will pay mandatory treble damages, attorney’s fees, and litigation costs.

The stakes can be high for restaurants to ensure compliance.

In 2015, the Supreme Judicial Court (SJC), the highest court in Massachusetts, ruled that businesses can lawfully maintain and enforce no-tipping policies, but with certain caveats, making full compliance with the Tips Act far from simple. The lawsuit, bringing in to question the no-tipping policies of several Dunkin Donuts franchises, arose as a direct challenge to the legality of these policies under the Tips Act. The employees who filed suit claimed that the no-tipping policies deprived them of an opportunity to earn tips from patrons. Moreover, when patrons left tips despite the no-tipping policy, Dunkin Donuts instructed employees to place the tips in the appropriate register. Contrary to patrons’ intentions, Dunkin Donuts was keeping the tips rather than remitting them to wait staff employees.

Although the court found that a no-tipping policy is consistent with the Tips Act, it cautioned that restaurants with no-tipping policies were still obligated to ensure compliance with the Tips Act. This decision clarified that employers were required to communicate the no-tipping policy clearly to patrons. Otherwise, the employer could not retain any tips left by patrons. For instance, patrons who left tips ignorant of the policy would reasonably believe that the tips would be remitted to the appropriate employees. As a result, the Tips Act would require restaurants to distribute these tips to said employees.  In contrast, where the existence of the no-tipping policy is communicated clearly to patrons, no patron could reasonably believe that the tips were intended for the wait staff employees. The restaurant is therefore entitled to keep the tips because it would not violate the patrons’ intentions.

This decision has sent a clear directive to restaurants regarding no-tipping policies. Although such policies may be lawfully implemented and enforced, restaurants must follow certain guidelines to ensure compliance with the Tips Act:

• A restaurant that has a no-tipping policy must decide whether it will clearly communicate the existence of the policy to patrons. Restaurants may have reasons as to whether or not they wish to communicate the existence of no-tipping policies to its patrons, which will affect how any tips are treated.
• No-tipping policies should be communicated with clear and conspicuous signs and postings. Restaurants should consider notifying patrons of the no-tipping policy by placing signs on the register, at the door, or other clearly visible areas.  The sign should also notify patrons that any money left will not be treated as a gratuity and will not be remitted to wait staff employees.
• If the no-tipping policy is not clearly communicated to patrons, then tips must be distributed to eligible wait staff employees.
• Employees with managerial responsibilities are expressly excluded from the definition of a wait staff employee under the Tips Act and are not eligible to share tips. Only those responsible for the service of beverages or prepared food directly to patrons and/or the clearing of patrons’ tables are eligible to share tips that are left by patrons and must be remitted to wait staff employees.
• Restaurants should not take any adverse actions against any employee who complains or raises concerns about tip distribution, regardless of whether the complaint has any merit. Massachusetts prohibits employers from retaliating against employees for raising concerns about wages, and a court may treat concerns about tips as falling within the ambit of “wages.”

The courts have spoken with clear directives regarding the legality of no-tipping policies under the Tips Act, and it is the restaurant’s responsibility to ensure compliance. Given the steep penalties for violating the Tips Act, employers should proceed carefully and consult with their counsel when contemplating and implementing a no-tipping policy.

Massachusetts Courts Have Spoken: Guidance Regarding No-Tipping Policies posted first on happyhourspecialsyum.blogspot.com

MRM News: Catering as an Untapped Opportunity for Franchises

The market for business catering in the U.S. is now worth $21 billion annually, according to  Technomic. Earlier this year, ezCater, the only nationwide marketplace for business catering, raised a $35 million round of funding tho bring the company’s total amount raised to $70 million. The money is being used to fuel the company’s growth by accelerating product development, expanding customer support and bolstering sales and marketing efforts.

ezCater has doubled its headcount and continues to cultivate its network of restaurants and caterer partners, which includes tens of thousands of independent local restaurants, plus regional and national chains such as Boston Market, HoneyBaked Ham, and Ruby Tuesday. ezCater now counts nearly 50,000 restaurants and caterers in its marketplace and has helped provide food for more than 16 million businesspeople.

In this MRM News clip, ezCater’s VP of Caterer Partnerships Victoria Brady talks about how franchises can capitalize on the growing interest in catering opportunities. 

 

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Three Ways Mobile Can Improve Operational Efficiency for Restaurants

The more efficient your business is, the less it costs to get things done. Efficiency means fewer mistakes, happier customers, and a streamlined production or sales process. Mobile makes it easier to achieve all three of these things and usually comes with a few added benefits, too, like simpler data collection.

It should be obvious by now, considering how many people own smartphones, that mobile technology isn’t a passing fad. Things like online ordering, digital loyalty programs, and even mobile analytics themselves aren’t gimmicks or fly-by-night tactics. These are becoming tried and true strategies that have helped big name businesses like Domino’s, Starbucks, Panera, and Chipotle grow their market share, not just remain profitable.

Below you’ll find the three significant ways having a robust mobile strategy will save you money by streamlining a handful of your day-to-day operations.

Mobile Draws in More Customers and Saves Time

The easiest way to use mobile, and in this case your business’ mobile app, to become more efficient is to implement mobile ordering. If you haven’t done this already, you will have more than likely considered it. Mobile ordering will soon be offered by the majority of restaurants, chains, and cafes both small and large. It opens your business up to a larger customer base. Better, when they don’t have to wait, these customers are more likely to place larger orders.

Because these orders come in automatically and can be scheduled for specific pick up times, you can be sure to stay ahead of the rush and better allocate your supplies. Now, if you don’t offer any to-go services or happen to cater to a crowd that must make a reservation, mobile can enhance your customer’s experience, too.

With mobile, a customer can make a reservation and browse every available reservation. This gives them more flexibility and a greater number of options compared to calling and asking about their availability. Further, this process will free up your staff’s time.

Restaurant apps aren’t necessarily just for your customers. You can opt for a solution just for your staff, or a combination of the two. Staff solutions can do everything from simplifying the ordering and payment process with the use of mobile devices to creating a more versatile and easily accessed scheduling system. This saves time, money, and paper. With a full enterprise solution, the majority of your bookkeeping can even be automated.

If your restaurant is new or you simply need to refocus on bringing in new clientele, an app is still a good idea. Why? By offering mobile online food ordering and loyalty programs, you give people a good reason to try out your restaurant and make it easy for them to do so. If they like it, chances are they’ll become a regular and tell their friends. Creating ambassadors and buzz for your business is key to its longevity.

Ordering Ahead Reduces Errors and Waste

Mobile ordering is a big player when it comes to reducing errors, too. When an order is clearly defined on a screen, it’s less likely to be misinterpreted, and when a customer has to put in every addition or substitution, things are less likely to get lost in translation. In a similar way, customers can typically select saved settings of regular orders, increasing convenience for them and decreasing the chance that they’ll claim an order was improperly put together even though the oversight may have been on their part. More accurate orders lead to less waste.

As these orders are processed, your app will give you, the business owner or manager, a clear picture of what your most popular items are and what tends to be ignored. This can help guide you when making inventory and menu decisions. What items might you need to remove from your menu? Which specialty or “limited time” experiments deserve a permanent spot? If you changed a supplier or recipe, have there been fewer orders? Proper mobile solutions and analytics can answer these questions and more.

By tracking your business sales through a mobile system, not only will you be collecting financial data and be able to track which items are selling well, but you can see your peak times, too. If there are consistently slow times, or if your staff seems consistently overwhelmed on lunch shifts in the middle of the week, the data you collect can point these things out. All you have to do is implement the proper solutions.

Mobile Enhances Loyalty Features and Collects Better Data

Have you ever tried punch cards for a loyalty program? How effective was that? Did you try credit-card or barcode style? How many customers have lost their cards time and time again? What if they could keep their cards with them 24/7 and never lose them? Then, what if they received their points automatically when they made a qualifying purchase? That’s the elegant simplicity of a mobile loyalty program. No taking time out to punch cards or explain the registration process, it just happens.

Of course, you’ll need to set up a loyalty program within your app first, but if you happen to use a modern, competitive builder that shouldn’t take too much time. Similarly, there are modules available for all types of traditionally built apps.

With a loyalty program you, as the restaurant owner or manager, can then see how your customers use your loyalty program. If you offer different redemption options, say a free appetizer vs. a 10 percent discount, which gets chosen most often? What other tests could you run to optimize the experience of your customers?

Mobile solutions, particularly apps, can give you the opportunity to create promotions that appeal to specific customers. You could offer small discounts on a regular order of theirs, for example, or create a limited time sale for every customer within a 10-minute drive of your location. These promotions can be especially useful for businesses that deal with goods that only stay fresh for a short time, such as bakeries.

Does Mobile Offer a Better ROI?

In nearly every case, that answer is a definite, “Yes.” Compared to nearly every other marketing activity, mobile offers the best results and the easiest to track. When you just consider it’s power to streamline your business and reduce waste, it can easily pay for itself as long as you start with a reasonably priced mobile solution and build up as you learn how to manage it.

As a restaurant, your business faces a number of unique challenges. Chief among them is inventory management. Many establishments fail after taking losses month after month because of improper inventory management. Mobile can help you stay on top of this challenge by predicting what your customers will order week after week, month after month and point out patterns that you may have trouble visualizing with numbers alone. The data you collect will not only help your business now but shape the way it evolves in the future- that’s the real power of mobile when it comes to enhancing the operational efficiency of restaurants.

Three Ways Mobile Can Improve Operational Efficiency for Restaurants posted first on happyhourspecialsyum.blogspot.com

What are the Most Commonly Misused Items in Restaurants?

“Ask the Expert” features advice from Wade Winters, Vice President of Supply Chain for Consolidated Concepts Inc. Please send questions for this column to Modern Restaurant Management (MRM) magazine Executive Editor Barbara Castiglia at bcastiglia@modernrestaurantmanagement.com.

In this MRM News clip, Winters answers: What are the most commonly misused items in restaurants? 

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Gordon Ramsay Says: ‘Don’t Order The Special!’ Eight Reasons You Should Ignore Him

Gordon Ramsay recently advised us not to order the special: “Specials are there to disappear throughout the evening, “ he said.

 

It is true that the daily special can sometimes be a bad choice. Anthony Bourdain talks about this in his book Kitchen Confidential: “…never order the seafood special on a Monday.”

 

Most fish markets don’t deliver on weekends. Any seafood dishes offered on Monday won’t be as fresh as they should be. This is why the “don’t eat fish on Monday” debate continues to rage on between freshness loving chefs.

 

Certainly, it is wise to heed Bourdain’s advice and to exercise caution when it comes to seafood specials.  If you can’t smell the salty air, don’t order them. If the waiter is trying to push fish specials on a Monday, it should be a red flag.

It should come as no surprise that the dishes on the specials menu can often be made of food chefs need to get rid of fast; such as old vegetables or leftover sauces. Pasta, soup and sauces can mask not-so-fresh ingredients: the extra hollandaise sauce from the eggs benedict special becomes the béarnaise sauce for tomorrow’s steak dinner. That is not necessarily bad if the chef is skilled, but the tricks used to minimize less-than-fresh flavors probably aren’t what you think about when you see the specials of the day.

 

Despite what the name suggests, both celebrity chefs think the daily “special” is anything but. Restaurateurs know that many diners will order the special, and consequently, they will raise the price. As everything in a restaurant is designed to minimize waste and maximize customer satisfaction (which is a delicate line to balance), the house specials are utilized to make the balance work and maximize profits.

 

Ramsay’s disdain for the daily special was also evident when he said: “When they list ten specials? That’s not special.”

Here are eight reasons you might want to ignore Ramsay’s advice:

 

1. Chefs do place legitimate items on the specials menu that they want to test as a trial dish ahead of a menu change or expansion.
2. Offering specials and tracking sales and customer feedback is a great way to build a new menu.
3. The special of the day is often more elaborate and something that is rarely offered.
4. Chefs use specials to showcase their flair and creativity and can take pride in demonstrating their skills.
5. Sometimes chefs get a great price on an ingredient and use the opportunity to use the excess product while it is still fresh.
6. Ingredients may have been sourced from a supplier as a trial or one-off purchase, or some suppliers may gift a restaurant some samples with a view to further business.
7. Specials showcase highly seasonal ingredients that practically can’t be on the regular menu year round.
8. The specials menu offers patrons something different, so they don’t become bored with the regular menu.

Most people will try the daily special if sold correctly: It needs to be presented as a one of a kind, limited time only option that is worth the extra cost. Asking the server for a recommendation is a good practice as they frequently sample the range of dishes (including specials) on the menu. Your server can offer insight to what the chef has added or what the locals love.

So, if your preference is to experience something unique with fresh seasonal products or unusual combinations and you like to try new things to eat when you go to a restaurant: then go ahead, be adventurous. If you do decide to order the special the chances are you will be pleasantly surprised. You may discover a new favorite, or you may be inclined to send your compliments to the chef.

 

 

Gordon Ramsay Says: ‘Don’t Order The Special!’ Eight Reasons You Should Ignore Him posted first on happyhourspecialsyum.blogspot.com