Sunset Grill says tip clawback after minimum wage hike bridges 'unfair' pay gap

Claims that Sunset Grill is robbing servers of their tips in the wake of Ontario's minimum-wage hike are false, says the company's CEO. 

"Sunset Grill DOES NOT keep servers tips!" said Sunset Grill's Chief Executive Officer, Angelo Christou, in an emphatic email to CBC News. 

The statement comes after CBC Kitchener-Waterloo looked into online claims made by staff who said they were unsure where an additional one per cent increase to their tip-sharing was going. 

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Comments about the popular breakfast restaurant came only days after Tim Horton's employees said they would be losing paid breaks and cuts to benefits due to Ontario's nearly $3 mandatory increase to the minimum wage, which took effect Jan. 1.

Tip-out raised

Servers at restaurants are often required to pay a portion of their total to coworkers who do not receive gratuities, a practice known as "tip-out."

Sunset Grill told staff in November the amount of their tip-out would increase to five per cent of their sales total, up from four per cent "to ensure the continuation of successful operations following the increases of minimum wage rates."

The increase was mandatory at all franchises.

'Unfair pay equity gap'

Last week a new memo was sent to staff – which was obtained by CBC News – that said the increase was made to "bridge the unfair pay equity gap for all non-serving staff." 

The document said the 5% tip out is evenly distributed to back-of-house staff such as cooks, helpers and dishwashers.

The memo was sent by the Christou family "due to misleading and false information that has been circulating."

Tip share

A representative from the restaurant said in an email "owners are very active in their business, and many of them play a substantial role in the restaurant and perform the same work performed by non-serving staff who receive a portion of the tip out pool including hosting, bussing, cooking and managing."

Under provincial legislation, owners or managers are allowed a share of the tips if they "perform to a substantial degree the same work," done by their own tip-earning employees, or similar tip-receiving employees of other companies in the same industry.

Wage comparison

The new memo also detailed the amount of money a server makes compared to back of house staff to illustrate the company's reasoning for the increase.

According to the memo, on average a server makes between $30 and $50 per hour including tips, wages and after tipping out. And most of this is in cash.

Cooks make an average of $15 to $25 per hour before taxes, while some staff such as helpers and dishwashers make only minimum wage, which is now $14 per hour, it said.

The document noted servers still get free meals and drinks while at work.

'Not one' server has quit

Currently, the restaurant has 75 locations across Canada including three in Waterloo region, and one nearby in Guelph, Ont.

Stelios Lazos, Chief Operating Officer of Sunset Grill, said in an email to CBC Monday morning that "not one server left in spite of the false allegations online."

"All our staff are treated with respect and are well compensated, period," Lazos said.