Entire staffs at 3 Sonic locations quit after wages cut to '$4/hour plus tips' | Hacker News Reader

Entire staffs at 3 Sonic locations quit after wages cut to '$4/hour plus tips'

kutv.com

43 pointswillart4food29 comments

I'm fascinated that the only source for the 4$/hour + tips is a tweet. As far as I can tell, that's it. In fact, the article doesn't even make the claim, just republishes the tweet.

The Sonic statements says no wage have decreased, but this is not pointed out, fact-checked or commented on.

Real good journalistic work.

And to be honest, the strategy works. The fact that it (hopefully temporarily) cracked HN's frontpage is testament to that.

To be fair, this was published 20 minutes ago on a Friday after work for US. Not hard to get some magic promotion in that fashion.

It looks like they reclassified their employees. The Ohio state min wage is $8.55/hr for employees, but if your employees can get tips, you only need to pay $4.30/hr.[0]

[0]https://www.com.ohio.gov/documents/dico_2019Minimumwageposte...

As I understood, if an tipped employee's salary is below the minimum wage the employer must make up the difference; so the employee would still be making minimum wage.

HAHAHAHAHAHA. No, no employer does this. If you don't like it there's the door. Good luck proving you're not hiding money. You still have to pay taxes as if you were tipped as well. Tipping should just be outlawed.

I'm amazed that this fcked up system of obligatory tipping is still in use in US.

I'm always amazed when others are astonished of the "ridiculousness" of restaurant tipping in the U.S. It's a well understood social convention that everyone follows, creates an incentive for waiters to treat guests well, and creates a more direct connection between a patron and server.

There have been many cases of restaurants that have removed tipping, only to go back at the behest of their staff because waiters made more money from tips than from a higher hourly salary. This makes sense too, if a waiter is incentivized for tips, they will quickly learn how to nudge customers into getting more.

So waiters make more tipping, and U.S. customers accept it as a social norm. What's the problem?

The problem is that it opens restaurant employees up to abuse and discrimination. In most companies, if a client starts abusing an employee, managers can offer some level of protection and insulation, either by inserting themselves or in extreme cases, dropping the client. A restaurant offers far less insulation to waiters/waitresses, which makes it harder to combat entrenched discrimination. This abdication of responsibility arguably reinforces such discrimination, which can have wider effects than just in a restaurant.

This is a problem that needs fixing, but given that waiters/waitresses are often towards the bottom of the economic totem pole, and plenty of other of areas need fixing too, forcing unwanted change on them for some greater moral good before others seems wrong in itself.

Good service should be the norm. They don't get the same minimum wage and service levels are arbitrary. You don't actually seem to understand some things about waiting.

Higher wages only occur in places with higher food prices. Diners and the like often don't make much over minimum wage. Try making a decent wage at a place like a Waffle House. Great greasy diner food a a low cost, which means the waitstaff make nil in tips unless they make it up in volume. Some places also force waiters to pay for dine and dashers. The legality of this is questionable but it definitely happens.

The solution is to remove the tipping minimum wage. If customers then want to provide a tip above and beyond that wage level for exceptional service, fine, but removing the tipping minimum wage would allow for more stable wages, would improve the bottom end of the wages, help with lower hours, etc. This way it removes the arbitrary lower wages that might come from discrimination, foreign eaters, management issues, etc. Prices would go up everywhere, normalizing the costs.

There's the law, and then there's reality. I worked a job that was based on tips, $5 an hour otherwise. I never once in my life saw an increase in my pay for hours where I made no tips.

It has been confirmed. Statement from Sonic etc. See e.g. https://www.cbsnews.com/news/ohio-sonic-employees-quit-near-...

Proof collective action works. The PR was so bad, corporate stepped in and and exercised their right to forcibly acquire the locations in question back from the franchisee. The workers have been offered their jobs back as well.

“Additionally, with the ownership change, employees may now have their paycheck direct deposited and general managers are now eligible for a new bonus program, among other benefits.”

I was going to say, unfortunately this probably came at the personal expense of the employees who probably needed the work.

Great to hear that this actually led to them getting better treatment.

That’s not how I read it. What I read is that the entire story is wrong, no one’s pay is cut, and the reason these signs were posted is unclear. What am I missing?

What I read was that the franchisee who made the labor decision has lost their franchises, the ownership of which has been transferred to a preferred corporate partner.

“Thank you for your inquiry about the about the eight Sonic Drive-Ins in the Columbus, Ohio market that have changed ownership from a franchisee to Sonic’s operating affiliate, SRI Holding Company (SRI) as of Monday, February 25.”

It’s effectively a contractual death penalty for a franchisee (not an uncommon component of franchise agreements as it relates to bad PR or egregious business practices).

This story is (maybe after update?) dated March 1. The official statement is dated February 25. The tweet with the picture is dated Feb 23rd.

Not sure which interpretation to take.

I read it the same way as you, but on closer examination, if you look at the dates the letter was posted and the date of when the policy/acquisition is effective, it seems that Sonic corp did step in after the fact to acquire these and reinstate old policies. But it is amazing how unclear that was.

The source article linked to in the op says different

“One anonymous source close to management stated: “Circleville, Lancaster, and Grove City crews have all walked out and quit after the franchise was bought out by corporate. The regional director, two district managers and four general managers have all been let go. All of which have been working for the company in management for 7+ years.”

Sonics updated statement was that pay was actually not changed

I’d be interested in hearing that from someone whose pay was supposedly not changed, not Sonic PR.

When the people have nothing left to lose, they will make the right choice and strike.

The key is to give the working class the slightest bit of hope to cling onto.

People will accept lots of abuse if they think there is still a chance of making it in life if they obey their masters.

Pretty fucked up if you think about it. In order to circumvent minimum wage laws, they reclassified their employees as tipped employees, thus exempting them from having to pay state minimum wage. These types of practices are common in third world countries. It would seem the US has dropped from a developed nation to a developing one. This is also further proof that a minimum wage doesn’t work. The free market should decide the fair market value of a laborer.

I was with you until the last sentence.

Furthermore, in the United States, what we have doesnt even resemble a free market.

now go learn how the minimum wage laws work with tips. it’s not a “get out of paying employees free” card

I'm not sure about Ohio but I thought the rule was that you were obligated to pay out the difference if tips don't make them go to minimum wage.

So was this policy from the new owners just a way to slightly reduce costs. From any tips the employees got? Do fast food workers get tips? It seems.... so cheap.

> the rule was that you were obligated to pay out the difference if tips don't make them go to minimum wage

That is the rule but, practically speaking, the fastest way to get permanently fired and more-or-less blackballed from ever working in foodservice again is to complain to management (and, worse, the government) about getting shorted on wages due to low tips. So few people do it if they need the job.

Ohioan here, this is correct, however i can't find an official gov source that explains the tip credit mentioned in the new 2019 wage poster [1] [1](https://www.com.ohio.gov/documents/dico_2019Minimumwageposte...)

If you were making $8 plus tips before, and now you’re making $4 plus tips or $8 (whichever is higher), then you’re still being paid $4 less per hour in any hour when you make at least $4 in tips. Because your first $4 of tips is going to bring your wage up to $8 instead of being on top of the $8.

So it’s legal (if the employer actually holds to it) but it still screws over the employees and they still have every right to be pissed.

It's not clear, but I think what happened may be:

1. Restaurant ownership changed 2. New owners set wages at min(4 + tips, 8) instead of 8 + tips. 3. Staff quit

Technically, the minimum amount earned didn't change, but they'd be making less if they got any tips?

It hits them twice. Counting tips means higher taxes. It shouldn't, but the reality is tipped employees underreport if they can, mostly.

If this cut to $4/hr is indeed true and documented act by the management - they'll soon be using their savings to pay for own legal bills.

However - better wait for the full and well-researched story to follow ...

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