New Tip Policy at Welk Village Isn’t So Wunnerful to Workers

The Champagne bubbles burst at Lawrence Welk Resort Village for about 70 restaurant workers who were told by resort officials that they must share their tips with management.

“I used to come away on a weekend night with 20 or 22 bucks in my pocket. This last weekend, I made $11.13,” a busboy at the North County resort said. “It doesn’t seem right.”

State Labor Commission officials agree with the busboy and promise to look into the situation.

According to several waiters and waitresses employed at the Welk resort north of Escondido, manager Bud DeSantis called a meeting of restaurant workers last Thursday to announce that all workers receiving tips from special resort dining packages, such as the $28-per-person dinner-theater package, would henceforth receive only 50% of the built-in gratuity of $1.

Although waiters and waitresses formerly received 75 cents and busboys 25 cents per diner, the gratuity split will now be 12.5 cents for busboys, 37.5 cents for waiters and waitresses, and 50 cents for the management, DeSantis said.

DeSantis said the reduction in gratuity revenues to the restaurant workers was more than offset by the increase in the minimum-wage rate they will be receiving.

Because of a state Supreme Court ruling last week striking down the state’s two-tiered minimum wage of $4.25 an hour for most workers, but $3.50 an hour for workers receiving more than $60 a month in tips, “our people will be getting 28% wage increases,” DeSantis said. “I can think of no industry that can take a 28% increase in labor costs (from the former $3.35 an hour wage to the new $4.25 an hour minimum) without doing something about it.”

DeSantis rejected increases in meal prices, reduction in portion sizes or reduction in service personnel to make up the deficit, choosing instead to halve the gratuity to workers.

One angry waiter charged that the Welk management is “playing a cheap trick on us, punishing us because the court said we should be paid the same as everyone else.” Welk employees spoke only after being promised anonymity, claiming that the resort managers had threatened to fire anyone who made trouble.

A waitress, who said she was seeking another job because of the decision to cut the employees’ share of gratuities, said: “I’m bitter about this. They cut us down to a 37-cent tip and then they go ahead spending money like crazy. They brag they are spending $10,000 a room on redoing the resort and building a $2-million administration building and planting a $5,000 palm tree right in the middle of the restaurant, and then telling us that they need our tip pennies.”

Steve Grove, senior commissioner in the San Diego office of the state Industrial Relations Department, said there has been little negative reaction to the state Supreme Court ruling “except for a number of calls from employees asking when they were going to get their retroactive pay.”

Under the court ruling, restaurant employees who have been paid at the lower $3.50-an-hour rate since July 1 will be entitled to back pay amounting to 75 cents an hour.

Grove said most restaurants have anticipated the court ruling and have put aside the extra pay in a reserve fund “so there won’t be much of a problem for them.”

However, James Curry, a deputy director of the state Industrial Relations Department in San Francisco, said his office will dispatch an enforcement team to look into the Lawrence Welk resort situation.

“This appears to be as much a fraud on the customer as the employee,” Curry said. He said resort customers are led to believe that a sufficient tip is included in a package that advertises “tax and gratuity included” and therefore are not likely to leave anything extra for the waiter or waitress unless they request extra service.

A Welk restaurant waiter said that DeSantis and restaurant manager Adrienne Edwards had been requested to delete the 50-cent-per-head gratuity distributed to restaurant staff, lowering the price of the resort’s special packages by that amount and adding a statement that a gratuity was NOT included.

“They refused,” the waiter said, “and said that anyone who didn’t like the new policy could find another job.”

Jef Eatchel, manager of Local 30 of the Hotel Employees & Restaurant Employees Union, said some of the Welk employees sought advice from the San Diego union officers about their plight and received it. The Welk resort employees are not unionized.

“We expect to see a lot of this, of employers going into their employees’ pockets to get around this. We have our attorney looking into the situation,” Eatchel said. He said the union’s concern is to protect workers’ “conditions of employment.”

Curry said he expects the state agency’s field enforcement teams to be busy in coming months to ensure that employers do not violate the state Supreme Court’s ruling, which prohibits using any part of tip income as a part of the required minimum wage.