Parasole dips into tips

Servers at Parasole restaurants received word earlier this month that they'll have to give up 2 percent of their credit card tips to the house.

A server at Good Earth Roseville tells City Pages that higher-ups explained the move as being necessary due to rising credit card use among customers and higher fees from banks. The excised 2 percent on their tips will make up for rising fees.

The workers are in a quasi-revolt because they're making minimum wage already.

"People aren't tipping as much because the economy is bad," the server said. "Now they're asking us to take a 2 percent cut in income."

City Pages called Good Earth to ask about the issue but was directed to Parasole's corporate offices. Vice President of Business Development Kip Clayton declined to comment.

"Whatever we end up doing in terms of compensation for employees is between us and the employees," Clayton says. "So there's no reason for us to share it with the rest of the world."

The waitstaffer City Pages spoke with says an official announcement was posted in the kitchen explaining that this change would affect servers at all Parasole restaurants, including Chino Latino, Uptown Cafeteria and Sky Bar, Il Gatto, and Manny's Steakhouse.

Restaurateurs "can take up to whatever the credit card company takes," explains James Honerman of the Department of Labor and Industry.

Which means that as long as the credit card in question charges a 2 percent fee to the restaurant, the restaurant can pass along that 2 percent penalty to the waiter receiving the tip.

"It would be one thing if the employer is keeping the 2 percent," explains Michelle Drake, employment lawyer for Nichols Kaster, "but it's really the credit card company keeping that percentage."

That a credit card tip would go to an employer might be shocking to someone who goes out to dinner, but it isn't all that unusual.

"That's fairly commonplace," says Mike Moberg, a labor attorney. "They're going to make sure the restaurant doesn't get shorted any money."

There's been a lot of chatter on Twitter over the issue, with a number of users questioning the legality of Parasole's decision to charge servers for their tips.

Some have pointed to Minnesota statute 177.4, subdivision 3, but that piece of legislation alone doesn't govern the rules, as Honerman and Drake point out. In fact, that section of state law focuses on protecting workers' rights to share their tips with their colleagues if they choose.

"When the servers share their tips with people in the back of the house, the employer is not allowed to hold the money for somebody who wasn't there at the end of the shift to get his allocation," explains state Sen. Linda Higgins, who cosponsored an amendment in the last session to make tip-sharing more convenient for employees who wish to share their tips. "This would allow the employee to hold the money for the people until they come in the next day."

Even though they were perfectly within their right to do so, Parasole executives—who did not return a voicemail seeking comment—may be wondering whether the 2 percent pass-along penalty is worth the public relations fiasco.

In statements issued via Twitter, Parasole said its success is built on taking care of its guests and employees, then added that its servers are better off when customers use credit cards because they tend to spend more money than people who pay in cash.

"Guests who pay with credit cards spend on average 25 percent more than guests paying cash. This results in higher tips and wages for our servers," Parasole tweeted. "Parasole Restaurant's success is built on taking care of our guests and our employees. The average tenure of our servers is between four and five years."

We put in another call to Parasole to ask if a live human being would be willing to talk to us in greater detail than these two tweets. We'll let you know if they get back to us.

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