CBC News: Restaurants 'taking from Peter to pay Paul' amid minimum wage hike
By Jenny Cowley and Nelisha Vellani
Higher percentage of servers' tips being shared amongst other staff
A number of popular Canadian restaurants have increased the amount of tips servers must share with their colleagues, CBC's Marketplace has learned. And many servers say that money is being doled out to higher-paid staff in lieu of a raise.
"Tipping out" is a common practice in which servers pay into a pool that managers then distribute to non-tip-receiving staff such as hostesses, bussers and kitchen workers.
As businesses grapple with increases to minimum wage, some have cut employee hours, reduced benefits or found other ways to offset increased costs.
In a hidden microphone investigation, Marketplace visited seven randomly selected restaurant chains that had raised servers' tip out percentages since Ontario's minimum wage went from $11.60 to $14 on Jan. 1 (those who serve liquor in licensed establishments saw their minimum hourly wage rise from $10.10 to $12.20).
Many large family dining chains calculate tip out as a percentage — typically between two and five per cent — of each server's total food and beverage sales each shift. If 10 tables each spend $100, the server's tip out could be between $20 and $50.
Apart from Quebec, which does not allow restaurant owners to enforce tip sharing, there are no federal or provincial regulations governing tip out amounts.
Most of the restaurant locations Marketplace visited had bumped the tip out by one percentage point.
For instance, The Keg went from four to five per cent. East Side Mario's from 2.5 to 3.5 per cent.
Earls, a chain with 56 locations across Canada, increased its tip out by 0.5 percentage points, but it had the highest total tip out, at 5.5 per cent.
An employee at Moxie's, which has 66 locations, told Marketplace their tip out was expected to increase to 5.75 per cent, from 4.75.
Servers 'aren't happy'
Ontario and Alberta will both have a $15 minimum wage by this time next year, and in several other provinces, the minimum wage increases each year on a certain date. With those increases, there is pressure on some restaurateurs to also give a salary hike to higher-paid workers, often as an incentive to keep reliable and valuable staff.
"We, the servers, have to pick up the slack," said one employee at a Keg location. "The servers aren't happy about it, but there's nothing we can do."
A server at a popular family dining chain in Alberta says it isn't fair to supplement the higher-paid workers' wages with those of lower-paid ones.
"I am a little frustrated," said Grace Ford. "There's days where I worked 12 hours, and I still give out $80 of my tips that I've worked all day for to people who sometimes mess up [customers'] food … a customer gets mad, it's me who in the long run suffers from it.
"There's money taken out of my pocket that I worked so hard for, and it just disappears and goes to other people who already make more money than I do."
Out of pocket
In statements to Marketplace, the Ontario Ministry of Labour said, "Tip pool money (including tip outs) can only come from an employee's tips or other gratuities, not from any other source."
But tip outs must still be paid when servers don't get tipped, or earn less in tips than what they would have to contribute.
In a restaurant with a five per cent tip-out policy, a server still has to tip out $5 on every $100 tab.
Some employees Marketplace spoke to said they've sometimes had to pay out of their own pockets to make their tip-out contribution.
At one Moxie's location a server told CBC, "The amount of times I've … pretty much had to give the restaurant money out of my pocket, it's a lot."
A server at a Montana's said, "There [were] times that I had a party of 12 … they didn't tip me because they were upset with the food that they got, nothing to do with my service. And I actually paid to come to work."
Restaurants respond
"Employers are feeling very confident to be able to start changing the tip pool and how it's distributed amongst the staff," says Deena Ladd, a workers' rights advocate.
"And I would say to employers that, you know, part of you running your restaurant is based on customer satisfaction. Do you really want your customers knowing how you're treating your workers?"
She says restaurant owners should be creating a tip pool that is not "taking it out on servers" and that all the employees feel is fair.
In a statement, Earls told Marketplace, "Our people are our greatest asset, and our priority has always been to make sure all roles contributing to the service experience are fairly compensated."
Moxie's said it is confident that all of its policies are lawful and fair.
Sunset Grill referred Marketplace to a CBC story last month that reported the increase in tip outs was made to "bridge the unfair pay equity gap for all non-serving staff."
The Keg, East Side Mario's, Kelsey's and Montana's did not respond to requests for comment.
Restaurants Canada, the group representing the industry, said in a statement, "Tip-pools and tip outs are a way to recognize the efforts of the entire team — from the server to the kitchen staff to the hosts and the bussers."
The group would not publicly disclose its member restaurants. Earls told CBC the organization's statement accurately reflects its point of view.
'Find other ways'
Ford says it's wrong to take more from servers.
"They should stop raising the money that's coming out of my pocket and find other ways to give them higher wages — or increase food prices even," she said.
An Ottawa restaurateur also disagrees with hiking tip outs for servers.
"We felt that some of the models that we're seeing elsewhere is a bit of robbing Peter to pay Paul," said Ivan Getz, owner and manager of Union Local 613. "When we make decisions here, my staff know exactly how much money I make. When we make strategic decisions, they're involved in that process."
His solution? Shaving dollars off his profits and slight increases to menu prices.
"The customer wouldn't even notice it."
Rabble.ca: Defending minimum wage victories from big business backlash
By Scott Neigh
Pam Frache is the Ontario coordinator of the Fight for $15 and Fairness campaign, which has won major victories around minimum wage increases and reforms to labour law in 2017. And this year, with a provincial election looming, they are facing a major backlash from big business. Frache talks with Scott Neigh about the overall trajectory of the campaign, about the backlash, and about fighting to defend what they won last year.
It is generally true that when social movements or communities-in-struggle win something, that is rarely the end of the story. Whatever powerful interests have been beaten back to win gains for ordinary people tend to retreat temporarily, regroup, and then come back all the fiercer for having been shown to be vulnerable. Movements must then figure out how to defend their gains and, even better, figure out how to embed what they have won in the political landscape such that rolling it back is no longer feasible.
The Fight for $15 and Fairness campaign in Ontario is a good example. Though minimum wage struggles have a much longer history in the province, the current campaign began in 2013 in an intiative spearheaded by the Workers Action Centre in Toronto. There was little movement infrastructure to start with, but in the years since, a province-wide network of workers, community groups, unions, anti-poverty organizations, workers centres, faith groups, health providers, and labour councils has taken shape and, in several stages, pushed forward an ambitious agenda.
In 2017, in the face of growing pressure from this movement, the Liberal provincial government of Premier Kathleen Wynne introduced and ultimately passed legislation making sweeping changes to employment standards. Though the labour law reforms still leave much room for improvement, they are, according to Frache, an "extraordinary start" in terms of improving the lives of low-wage and precarious workers. And despite their earlier insistence that they would not do so, the Liberals ended up giving in to the wage demands too -- the minimum wage went from $11.60/hr to $14/hr as of January 1, 2018, and it is scheduled to go up to $15/hr on January 1, 2019.
While the legislation was being debated, there was no shortage of opposition from corporate interests. And since the minimum wage hike took effect at the beginning of the year, the reaction from the business lobby has been loud and fierce. While it has largely been framed as a defence of small business, actual small business owners seem to be taking a range of positions on the issue, while large corporations and institutions beholden to them drive the backlash. With a provincial election scheduled for June 7, 2018, the big business lobby seems keen to elect a government that will roll back the recent gains by low-wage workers.
Resistance to this big business backlash has been widespread and spirited. Some of it has been spontaneous – for instance, in various cities instances have come to light of businesses retaliating against workers who benefit from the minimum wage hike by clawing back various kinds of perqs and benefits, and in many cases there have been spontaneous local campaigns to shame the businsesses into relenting.
The Fight for $15 and Fairness itself has been doing a number of things to defend the recent gains and to make them harder for any future government to roll back. An important piece of that is doing trainings in a wide range of contexts, particularly with people who do frontline work related to employment, to make sure that as many people as possible know how the new legislation benefits them, and to get as many people as possible accessing the benefits and rights to which they are now entitled. Another piece involves countering scaremongering by the big business lobby by circulating solid research on the actual likely impacts of the minimum wage hike.
Of course, they are also using the movement infrastructure built over the last five years to mobilize people. In particular, they are part of the movement to defend Tim Horton's workers who have had various benefits clawed back at some franchises, despite the fact that the hard work of the mostly low-wage workers at Tim Horton's generates billions of dollars in revenue and hundreds of millions of dollars in profit each year for its parent company, Restaurant Brands International.
And in terms of the provincial election, Frache said, the ultimate goal is to "build a movement so strong that no political party wants to mess with us."
Image: Modified from an image created by Errol Young and used with the permission of the Fight for $15 and Fairness.
Toronto Star: Why Tim Hortons’ foul play gives unions a big assist
By Martin Regg Cohn
There’s a missing ingredient in the battle still brewing at Tim Hortons.
Never mind the conventional narrative of family-owned businesses versus their vulnerable employees. It has more to do with the economic power imbalance when business (big and small) wages war against minimum wage workers who aren’t organized to fight back.
CBC: Women and minimum wage
By Jacqueline Hansen
Jacqueline Hansen looks at why more women than men are still at the bottom end of the income ladder
Financial Post: Ontario minimum wage hike having 'trickle up' effect on paycheques of higher earners
By Aleksandra Sagan
Many companies have bumped the hourly pay for employees who were making close to the new $14 an hour minimum
Nick Cluley and his wife, who have always paid their Coffee Public employees more than minimum wage, have boosted everyone’s pay by $1.25 an hour since Jan. 1 — not just those earning below $14, as a new Ontario law required.
They did that “to avoid tensions that might come from more experienced people, you know, being crunched right up against the same salary as someone that just started,” he said.
The new starting wage is $14.75, though the staff average is closer to $15.45, he said, adding they raised prices by about 10 per cent on everything they serve in their Toronto and Port Hope, Ont., shops.
From small mom-and-pop shops to a discount retail giant, there are already examples of companies that have bumped the hourly pay for employees who were making close to the new $14 an hour minimum — suggesting Ontario’s recent minimum wage hike is affecting more than just the lowest paid workers.
There’s little question that a minimum wage hike in Ontario will have a “trickle up” effect to raise wages for other workers, said Bernard Wolf, a professor emeritus at York University’s Schulich School of Business in Toronto.
“The question is simply how much and how pervasive that is,” he said, adding it’s likely a considerable number of employers in Ontario — where the minimum wage rose to $14 on Jan. 1, 2018 — will make such a move.
That ripple effect through the economy comes as employees who find minimum wage has now risen close to what they’re earning ask for raises to reflect their comparative skill level, Wolf said, or because their cost-of-living has increased as the price of goods goes up to offset the higher labour cost.
For employers already making the move, they benefit from positioning themselves as the good guy compared to other companies that raised the ire of consumers for clawing back employee benefits and other perks instead, he said.
Union Local 613 co-owner Ivan Gedz raised wages for all his kitchen staff to $16 in November, after realizing his Ottawa eatery could not only meet the new minimum in January, but surpass it.
The raises, which amount to between 50 cents and as much as $4 per hour depending on the employee, reflect Gedz’s belief in equality and because he realized the situation presented an opportunity to be an industry leader, he said. He raised prices on some items to offset the hit to his bottom line.
But small businesses aren’t the only ones setting a higher bar.
Walmart Canada, which employs more than 95,000 associates, increased its starting minimum wage on Dec. 23, 2017 just ahead of the Ontario-wide hike, said spokeswoman Anika Malik, adding all the company’s associates earn more than their provincial minimum wage.
“All pay bands also moved up accordingly to maintain appropriate relative compensation at all levels,” she said. The company isn’t cutting any roles, and employees will still be eligible for bonuses and performance increases, Malik said.
Meanwhile, one coffee chain has applied the pay increase to more than just their Ontario-based employees.
JJ Bean Coffee Roasters, which has more than a dozen locations across Toronto and Vancouver, first increased wages in Toronto on Dec. 17, 2017 and followed suit in Vancouver on Jan. 14, 2018, according to a letter from its senior leadership team.
Its national starting wage is now $14 an hour, and it increased wages for all employees making below $20 hourly. The company increased prices at its cafes by one to three per cent.
“We believe people have intrinsic value and that everyone who takes part in the journey of coffee — from farmers to baristas — deserves to be fairly rewarded for their work,” the letter reads.
CTV News Regina: Protestors asking for higher min. wage
Protesters in Regina are asking for a higher minimum wage in the province, showing solidarity for Tim Hortons employees in Ontario.
CTV News: Tim Hortons protests spread
Protest organizer Deena Ladd and fair economy campaigner Brittany Smith says this is such an amazing response from customers across Canada.
Toronto Star: Tim Hortons protests sweep the nation after minimum-wage hike
By Sara Mojtehedzadeh
Protesters rallied across Canada calling on Tim Hortons’ franchisees and their parent company Restaurant Brands International to reverse claw-backs to workers’ benefits, tips and other entitlements — changes implemented at some Ontario locations following a $2.40- hike to the minimum wage.
Demonstrators aimed to gather at 42 Ontario locations Friday, including 20 in Toronto. Eleven more rallies were scheduled to take place across Canada, according to organizers, who belong to the Fight-for-$15 movement, the Ontario Federation of Labour, and the independent advocacy group Lead Now.
CTV Atlantic: Halifax protesters march in solidarity with Ontario Tim Hortons workers
As a part of the nation-wide day of action, protestors gathered in Halifax to rally in support of Tim Hortons workers in Ontario.
Protesters are angered by some Tim Hortons franchisees who slashed workers' benefits and breaks after the province raised its minimum wage.
About 50 demonstrations were planned in cities across the country on Friday, although at least 38 were based in Ontario, including 18 planned in Toronto. As of Dec. 31, 2016, the number of Tim Hortons locations in Canada was 3,801.
Other cities involved in the protest included Calgary, Saskatoon, Regina, Vancouver and two other cities in British Columbia.
About 40 people marched up the middle of Spring Garden Road in Halifax, N.S. in solidarity with the workers Friday.
The group stopped in front of the Tim Hortons to wave their signs and chant a message that has spread from the situation west of the province gaining national attention.
“Workers and community organizations across the country are watching,” said one protester.
Rally goers in Halifax said they’re fighting for a $15 an hour minimum wage, as well as sick days and paid breaks.
Protesters also got signatures for their petition, asking the Nova Scotia government to increase the minimum wage.
“I believe that people need to make enough money to live,” said protester, Beth Pulos.
Nova Scotia has the lowest minimum wage in Canada with the current minimum wage being $10.85. The province raised the wage by 15 cents last year.
“Anyone who thinks that we can function effectively in the $15 world as a 15 cent jurisdiction is not being economically realistic. that's where our government is,” said NDP leader, Gary Burrill.
Protesters said big businesses like Tim Hortons could easily absorb a bump to minimum wage, but smaller restaurants would have to make some changes to accommodate the higher wage.
“Food prices would increase, or you're going to have to look at your systems and cut expenses elsewhere. Either find cheaper options or look at your whole system and find out if there's more efficient ways you can do stuff,” said Halifax restaurant owner, Cory Urqhart.
Urqhart has 13 employees at Envie and the servers start at minimum wage. All of the employees receive health benefits and paid breaks and he said he doesn't want to change that.
Urqhart also said introducing a higher minimum wage over a period of a few years would be a good start for a small business like his.
President of the Halifax Dartmouth and District Labour Council, Suzanne MacNeil was among one of those at the protest and she said it’s the big businesses rally goers want to reach.
“We think that if business owners are depending on paying poverty wages in order to give hundreds of millions in profits to their shareholders, then we say, they need to rethink their business plan,” she said.
Rally organizers said they’re planning another rally in about a month and they believe it’s important to keep the pressure on the province and big coporations to let them know their workers are watching.
Tim Hortons has said the employee benefit cutbacks made by some franchises in Ontario "do not reflect the values of our brand, the views of our company, or the views of the overwhelming majority" of restaurant owners.
With files from CTV Atlantic’s Emily Baron Cadloff and David Hodges of the Canadian Press.
Toronto Star: What will 2018 bring for the war on wage theft?
By Sara Mojtehedzadeh
On a grey October morning, Paul Cheung sat in a nondescript Bay St. boardroom armed with a red polyester briefcase, facing three besuited figures: his former bosses and their lawyer.
Cheung, a diminutive figure dressed in a neat track suit and white sneakers, was alone.
Both sides agreed on one thing. Cheung, a personal support worker caring for the sick and disabled, was shortchanged by his employer on $84 worth of holiday pay between 2009 and 2016. But a two-year statute of limitations meant he could only recover some of his entitlements.
So the Ministry of Labour ordered the company to pay him what they legally owed — a total of $3.97.
Cheung knew his chances of getting the full amount were slim; the arbitrator couldn’t change the law, only apply it. Ultimately, he lost his appeal. But, he says, that wasn’t point.
“This is not for me. It’s for my 500 coworkers,” he told the Star.
“I wanted to voice it to the public,” he added. “It was wrong.”
If he had an unwinnable case, it also represents something bigger: a system that has long relied on workers to come forward as individuals — often without legal support — to file and pursue complaints against better-resourced employers.
Cheung argues the odds currently weigh heavily against them.
“It’s a long agony,” is how he describes the complaints process.
Ontario’s new set of labour and employment laws, Bill 148, will double the Ministry of Labour’s complement of employment standards inspectors, increasing their capacity to proactively inspect around 10 per cent of Ontario workplaces. Fines imposed on law-breaking employers will also increase.
It’s a quiet shift, but one that statistics show matters.
“The changing workplace raises squarely the question of whether the traditional approaches to investigation of complaints and to enforcement are sufficient,” says a final report written by two independent expert advisers to the Ministry of Labour earlier this year.
On average, there are around 15,000 complaints made by workers for things like failure to pay wages, overtime, or holiday pay ever year. But between 2009 and 2015, one-third of unpaid wages owed to individual complainants had never been collected, a Star investigation found last year.
While individual complaints, even when upheld by the ministry, sometimes didn’t result in workers getting the wages and entitlements they were owed — but proactive ministry investigations, which are conducted at the behest of the ministry and don’t require a worker to come forward, were far and away more successful.
Fast forward to 2017 and things have started to change. In 2014, just eight law-breaking employers were subject to prosecutions with serious financial penalties. The figure this year is 119 — a 1,388 per cent increase.
Nonetheless, overall trends have remained static — which is why Deena Ladd of the Toronto-based Workers’ Action Centre says 2018 needs to be the year of enforcement.
Last year, the government’s rate of recovery when individual workers filed claims for unpaid entitlements was still around one-third, according to data obtained by the Star through a Freedom of Information request. Since 2013, this low recovery rate has resulted in some $38 million in missing wages for workers.
The recovery rate for proactive inspections, which Bill 148 will expand, was almost 100 per cent.
Often — as in Cheung’s case — the sum at stake is relatively small, the Star’s statistics show. Last year, for example, the overwhelming majority of claims — roughly 70 per cent — were for less than $2,500.
For a low-wage worker, it’s still money that could mean food on the table. For Cheung, it means something bigger.
“It’s not just about money. It’s about principle. Honesty,” he said.
“This is hard earned money.”