Tipping at Starbucks and Other Coffee Houses: A Curious Phenomenon. Will Wage And Hour Cases Soon Follow?

Joseph & Kirschenbaum has been involved in many of the most prominent wage and hour cases of the 21st century – especially cases concerning restaurant tip pool violations. That said, even though we have deep experience and knowledge in this area of law – and about the cultural and economic implications of tipping – this topic is constantly evolving.

For instance, consider this curious trend: the proliferation of tipping at Starbucks and other coffee houses. Restaurant servers, who often earn less than minimum wage, often make up the difference through tips. Yet Starbucks employees earn above the federal minimum wage already, so the tips just add to their net. That’s a good thing, obviously. This model helps baristas earn a decent living, and it helps prevent management from engaging in practices that would violate the Fair Labor Standards Act (FLSA) or New York Labor Laws (NYLL).

Tips Going Up; Tippers Becoming More Numerous

Estimates suggest that the size of the average tip is going up, and the number of people who tip at coffee shops may also be going up. That’s obviously good news for business, but it also marks a peculiar cultural milestone. John McCarty, a professor at the College of New Jersey, conducted research for the American Association of Consumer Research about this practice. He says the custom of tipping coffee shop and sandwich shop workers only began around 20 years ago. Prior to that, people tipped for table service but not for counter service.

McCarty, who says he now tips 20% of his order at his coffee shop, describes the habit: “many people tip automatically and don’t think through how much it affects the quality of service they get, or the rationality of it.”

Auburn University’s Head of Dietetics and Nutrition, Martin O’Neill, celebrates the progress, saying: “[baristas] work very hard, and putting a bit of extra cash into their pockets is not a bad thing.”

Welcome Rewards for Baristas: But Potential for Legal Issues?

Whenever a new source of money gets injected into an industry – particularly a restaurant-related business – you can expect financially savvy owners and managers to try to exploit it. This isn’t necessarily a bad thing. If you own or run a business, you want to look for and exploit (legal!) efficiencies. However, it raises questions. Will the proliferation of over the counter tipping lead to litigation, ultimately? It’s probably unlikely that bad practices will evolve at a restaurant chain like Starbucks, particularly since that company has a good labor record. However, at smaller coffee houses or restaurants, it’s conceivable that tip pool violations could occur.

If you or someone you love has a potential restaurant wage and hour tip violation case, call Joseph & Kirschenbaum today at (212) 688-5640 for a free consultation.

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