About Our Service Charge
The hospitality industry is evolving in Florida, as it is across the country. With recent legislation at the federal and state level affecting minimum wage, tip-pooling practices and sick leave, full service restaurants will be forced to adapt and evolve with the new legal terrain. When Florida voted for a $15 minimum wage in 2020, we looked at a variety of ways to address the changing labor market. We knew we would need to change our business model in order to compete in an extremely tight labor market. We looked at different models, weighing the pros and cons, and landed on a service charge to ensure that our team is well compensated and continue to attract top talent while ensuring that our guests continue to receive an outstanding experience and our company is well positioned for the future.
In response to the constantly changing business environment, Waterway decided to update our compensation model upon reopening in 2025 to simplify operations for ourselves, our staff, and our customers. After considering various models, we chose a service charge model. We believe this new approach will allow us to compensate our team both fairly and equitably, attract top talent, provide exceptional guest experiences, and position Waterway well for the future.
How the Service Charge Model Impacts the Company Bottom Line
The service charge revenue goes into our general funds and is used to help offset a variety of costs and expenses, much like our revenue from food and beverage. In short, the intent of this model is not to enrich the company financially through retention of Service Charge revenue.
How the Service Charge Model Works
A Service Charge is added to each guest check. This Service Charge is retained (100%) by the company and then distributed to the staff. The server/bartender will receive 17% of net sales. 3% will be distributed to support staff (Bussers, food runners, barbacks and host staff.)
Some of our guests requested the ability to leave an optional gratuity and therefore our credit card payment process will offer an optional opportunity for the guest to leave a tip. The guest should never feel compelled to leave a tip. Any tips are very much appreciated and 100% of your generosity will be given to your server or bartending team.
Frequently Asked Questions:
- In the traditional restaurant tip model, do servers keep 100% of their tips?
- No, there is a long standing practice of tipping support staff such as busboys, bar backs, service bar, food runners, and in some restaurants hostesses. This can cause a server or bartender to tip out approximately 15% or more of their total tip revenue.
- Why did you move to this model? Our team consists of a large group of professionals.
- From our service team to our culinary team. We already have excellent compensation built into our business model for our culinary teams. By moving our service team to a commission based model, we are able to continue to provide an incentive based model to retain and attract professional servers and bartenders that will continue to deliver our high quality service we are known
- Tipped Employee:
- A tipped employee works for the state’s tipped minimum wage rate. The goal is that the minimum wage plus gratuities equal or exceed the state’s non-tipped minimum wage. This employee is a direct W2 employee. Tipped employees are subject to overtime pay rules.
- Commission Employee:
- An employee who receives wages based on commission of items sold, usually determined by a set percentage of sales. Under The Fair Labor Standards Act, so long as a commissioned employee is in a sales position and receives at least 50% of all compensation from commission and earns equal to or more than the state’s non-tipped minimum wage, the base wage may be set at any dollar determined by the employer. This employee is still considered a W2 employee and should have no difference in their individual tax filing status. Our servers and bartenders receive 17% commission of their total sales net of Comp & Voids. Commission employees are not subject to overtime pay per The Fair Labor Standards Act.