About Our Service Charge
The hospitality industry has changed in Florida, as well as across the country. Legislation at the federal & state level has changed the minimum wage, tip-pooling, & sick leave practices. Full-service restaurants have been forced to evolve with the new legal changes. Florida has voted to raise the minimum wage to 15 dollars an hour. Our business had to change in order to compete in an extremely tight labor market. We have tried different models over the last 3 years since new legislation was approved in 2020, but with 3 more increases to minimum wage we realized we needed to evolve. We have decided on a service charge model to ensure 3 things for our staff & guests; 1) That our staff will remain well compensated 2) That we continue to hire talented service & culinary team members 3) That our guests continue to receive the great service, food, & drinks that we have been serving up for the last 15 years.
Starting September 30th, 2024, Sailor’s Return will move to a 18% service charge model.
To clear up any questions, some of the most commonly asked questions and terms are answered below:
What is a Service Charge?
A service charge, which may also be referred to as a service fee, is an additional percentage that is collected on a check for every quest. Typically, this charge is incurred at the time of the service transaction and is included in the total bill. A service is the property of the business and used to help pay for employee wages and benefits. The service member is paid an hourly rate plus commission.
What is Gratuity?
A tip, also referred to as gratuity, is a discretionary, additional payment on top of a check total given as a token of gratitude for good service and great hospitality. Tips are usually shared with service members, bartenders, and support staff, including food runners, bussers, and barbacks.
Who qualifies as a Tipped Employee?
Under the Fair Labor Standards Act (FLSA), a tipped employee is an employee engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips. The employer pays the full minimum wage or takes a credit against the tips earned by the employee towards its minimum wage obligations. This employee receives a W2 and is subject to overtime pay rules.
What is the Tip Credit? How does it work?
The FLSA permits an employer to take a tip credit toward its minimum wage for tipped employees. An employer that claims a tip credit must ensure that the employee receives enough tips from customers per workweek to equal at least the minimum wage. The current Florida tip credit is $3.02 and minimum wage is set at $12 an hour, and so tipped employees make $8.98 an hour. Recent political developments have caused the tip credit to be scrutinized and is in jeopardy of being repealed, which would raise labor costs for employers. Florida has 3 more $1 increases to its minimum wage until it reaches $15 an hour. The tip credit does not increase over time and may not exist in the near future.
Who qualifies as a Commission Employee?
Under The Fair Labor Standards Act (FLSA), a commissioned employee is in a sales position and receives at least 50% of all compensation from commission and earns equal to or more than the state’s non-tipped minimum wage, the base wage may be set at any dollar determined by the employer. Commission paid employees are considered W2 employees and have no change to their individual tax filing status. Our servers and bartenders receive 18% commission of their total sales net of Comp & Voids. Commission employees are not subject to overtime pay per The Fair Labor Standards Act.
In the traditional restaurant tip model, do servers keep 100% of their tips?
No, tips are shared amongst the entire service staff. The bulk of tips go directly to the server or bartender, but they are required to tip out the restaurant support staff, including the food runners, bussers, and barbacks. In some restaurants the hosts and expediters are also tipped. This can lead to around 20% of a service member’s tips being allocated to the service support team.
How are your team members compensated in a service charge model?
Our servers and bartenders are paid an hourly wage plus 18% commission which is shown as an 18% service charge on the bill. We offer an additional gratuity option for exceptional service. Our servers and bartenders receive 100% of both the service charge and the additional gratuity.
Are service charges considered tips or wages?
A service charge is the property of the restaurant, in which the restaurant then pays for hourly wages and employee benefits. In our model, our servers and bartenders receive 100% of the service charge.
Why did you move to this model?
Our team consists of a large group of service and culinary professionals. We continue to pay competitive wages to our culinary team. By changing to a commission-based model for our bartenders and servers, we will be able to continue an incentive based model that appeals to service team professionals. We can continue to provide the quality service that we have been known for.