RE:      The issues regarding to the equated tips sharing policy

Review of current tips pooling policy

Current tips policy has been clearly stated on the Gateway Casinos Policy Manual as follows:

“There are two separate tip pools within the Casino: Table Games and Slot Department. Tips are pooled and calculated on a daily basis and the amount of shares you receive is calculated at an hourly rate. The tip pools are administered by the staff Committee on site, overseen by Management, and belong to solely to the eligible employees on site.”

This policy has been agreed to by the employees and implemented for several years. It also becomes the basis of an employment of the two departments: Table Games and Slot Department.

More and more, it brings an attention to the company that the Slot Department generated average higher hour tips rate. Many factors contributed to this kind change. However, one of important factors is due to most Slot Attendants’ hard work and their efforts to improve their customer service skills. Generally, the customers have a higher rank of satisfactions to the Slot Department. 

Some concerns for the new equated tips sharing policy

Recently, the company posted a memo for the new tips pool policy – “Equated tips Sharing”. This new policy is not agreed to by the employees and will be mandatory to be implemented by the company on April 1 2008. It requires all Slot Attendants and Dealers to contribute their tips for a tips pool and then equally shared. Obviously, it is actually an issue how to share or distribute the tips generated from the Slot Attendants. This issue brings some of concerns from the Slot Attendants.

  1. Besides other regulations or acts, all companies or employers should follow three basic acts: Human Right Act, Employment Standards Act and Labor Relations Act. If other regulations contravene these three acts, they should be corrected. Interpretation Guidelines Manual, British Columbia Employment Standards Act and Regulations has defined that “Gratuities (tips) are paid by customers to the person who served them in appreciation for the service. While tips are considered income for income tax purposes, they are not wages for purposes of this Act.”  The equated tips sharing policy damaged the property rights of employee.
  2. Tips or gratuities are property of the employee to whom or for tips and gratuities. Tip pooling is legal, however, employer control over tips is not legal anywhere. To force employee sharing their tips may cause other legal issues. According to BC Policy Interpretation for Employment Standards Act, the distribution formula of tips pools should be agreed to by the employees.
  3. It contravenes the BC Employment Standards Act that an employer requires all tips to be put in a tips pool and then to be distributed to all employees.  If the “Equated tips Sharing” is considered impropriety either legally or operationally in the future, we will request the company to fully reimburse our losses due to implementation this kind policy.
  4. The Slot Department and Table Games are two different departments. Each of them could be solely existed and provide their services. When we hired or transferred to the slot department, the company policy manual informed we that there are two separate tip pools within casino: table games and slot department. If the company requires that the Slot Department to contribute all their tips for equated sharing with a different department, it obviously should consider our opinion.
  5. The currently tips-pooling policy has motivated slot attendants and slot supervisors performing good jobs and brought a good profit for company as well. It already forms a good circle system (between motivated-performance and outcomes) for slot department.  However, the equated tip sharing will not only reduce employee morale and loss of employees, but also often reduces the effort of the staff: "Why should I bother to work so hard now."  It will bring the negative impact to current job performance. The negative working attitude would bring damages to our performance and then reduce the company profit.
  6. Since there are a less Slot attendants and more dealers on site, imaging, if the equated tips sharing policy implemented, it would not significantly increase the hourly tips rate for dealers, but would significantly reduce Slot attendants’ hourly tips rate. It would not be significantly to encourage dealers’ efforts, but would be significantly to affect Slot attendant’s attitude.
  7. The Slot department generates about 75% (estimated) of revenue for the company and has a higher customer satisfaction, the management should adopt the positive measures to strengthen the department, not negative measures to damage department. The more successful, the more revenues!
  8. The employees of slot department have an averagely higher seniority, but the company gives them lower hourly wage rate. This is another reason why it is unfair to ask them to contribute all their tips for equally sharing with other employees.

Suggestions

Considering that the part of cashers help the Slot Department to provide good customer services, it may be reasonable to require Slot Department to share a certain amount or rate to reward cashers’ efforts.

  1. Comparing with the equated tips sharing policy, the cashers share 15% of Slot daily tips pool would bring a little higher hourly tips rate for them, the Slot attendant would not have dramatically reduce in tips rate, and the dealers only have one or two dollars difference. This difference for the dealers could be recovered by introduces the poker game or other measures in the future.

 

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Interpretation Guidelines Manual for British Columbia Employment Standards Act and Regulations (http://www.labour.gov.bc.ca/esb/igm/esa-part-1/igm-esa-s1-wages.htm#3)

Non-wages: Subsection (f)
Gratuities (tips) are not wages unless used to pay an employer’s business costs. Gratuities are paid by customers to the person who served them in appreciation for the service. While tips are considered income for income tax purposes, they are not wages for purposes of this Act. Since tips are not paid by the employer to the employee for work performed, they are not wages, therefore, the Director has no jurisdiction over tips.