Tipping Turmoil: The Scoop

Parents, employees question ice cream shop practices

By Michael Turton

A popular local ice cream parlor has found itself embroiled in controversy in recent weeks over how it distributes tips earned by its employees. Moo Moo’s Creamery, located on Cold Spring’s riverfront, has been strongly criticized by local residents on social media sites.

At least two parents whose sons are former employees at the ice cream shop, claimed on the invitational Facebook site Philipstown Locals that tips are not shared with employees. Moo Moo’s owner has denied the claim, however the scant information provided to date on employee paychecks has made it impossible for workers to determine how much of their pay is derived from tips.

Moo Moo's signIn correspondence with The Paper, and on Facebook, Moo Moo’s owner Alexi Katsetos has stated that steps toward greater transparency and improved payment procedures are now being instituted while asserting that tips have always been shared equally among employees.

A discussion of Moo Moo’s handling of tips took place around July 1 on Philipstown Locals. As part of the exchange, Lesley Robertson, whose son worked at Moo Moo’s in the past, wrote, “… the kids at Moo Moo’s Creamery do not get any share of the tips. They never have … my suggestion is that you hand the tip directly to the employee …”

Robertson’s claim was supported by Lori Moss, whose son is also a former Moo Moo’s employee. When someone asked “Do the employees get the tips or not?” Moss simply responded “No.” Cold Spring resident Stephen Geiger went so far as to suggest a boycott of Moo Moo’s on the Fourth of July and encouraged an employee walkout. Neither of those scenarios became a reality.

Owner responds

Katsetos responded on the same site. “What has happened is getting blown out of proportion. All of my employees have had pay plus their tips,” he wrote. “There was some miscommunication between employees and myself which has been cleared up…” Yvonne Mee also posted a statement on behalf of Moo Moo’s Creamery management supporting Katsetos’ assertion. “To be clear … all of our employees receive a base pay, plus all of the tips that all of you generously give them,” she wrote.

Miscommunication seems to have been a major factor. Information The Paper received from three former Moo Moo’s employees, all of whom did not want to be named, indicated that they were never told their hourly rate of pay nor were they ever told how much of their pay came from the tip pool. It wasn’t for lack of trying. One of the employees provided The Paper with a copy of his resignation letter to Katsetos, which read in part: “In light of your business practices I am very frustrated. Although young, I am aware that your employees are entitled to their tips and if they are included in our paychecks they need to be defined as such.”

The same employee also provided a copy of one of his Moo Moo’s pay stubs and his W-2 tax form. The paystub indicated only gross pay with no indication of the pay period, number of hours worked, hourly rate of pay or tips received. His 2012 and 2013 W-2 tax forms had a “0” entered in the box titled “Local wages, tips etc.”

Changes being made

Katsetos appears to be changing some of Moo Moo’s procedures in order to address the concerns raised. On Philipstown Locals some had suggested that employees count the tips rather than Katsetos, which had been the practice. Responding to that suggestion he wrote: “Fair enough. It is something I will definitely take into consideration and if that is what is needed to restore trust after this attack then so be it, Moo Moo’s will do it.” That change appears to have been implemented. In an email to The Paper on July 9 Katsetos said: “Employees count all of the tips at the end of each night.”

As part of his Philipstown Locals post Katsetos admitted that he is at least partially responsible for the controversy, while insisting that tips have been handled properly. “Part of the issue is the way I did paychecks. (They) should have been more clearly detailed … I take full responsibility for that,” he wrote. “That being said, it does NOT mean employees were not distributed their tips — they were distributed.”

Katsetos was vague in responding to an email from The Paper inquiring if W-2 tax forms would now include total tips received in a year and if paycheck stubs would be revised to include pay period, hourly rate of pay and tips. As part of his July 9 email in which he said employees would now count the tips he said only that “All other concerns have been handled internally.” He had not responded to The Paper’s request for clarification as of noon on July 10.

Legal matters

The website Fair Employment Legal Update provided details on New York State law concerning how tips must be handled. On Jan. 7, 2011, it stated in part: “When tip sharing or tip pooling … employers must keep records of all tips and make these records, and any company policies on tipping, available to employees.”

RestaurantInsider.com also weighs in on what the New York State Department of Labor says about how businesses are required to handle tips. It states: “… to be acceptable under law, a tip pool ‘must be completely voluntary, initiated by the employees themselves with or without the knowledge of management, and not made part of the terms of hire or conditions of continuing employment.’ This means that an employer may not be involved in a tip pool — other than that of a ‘ministerial’ or administrative function of ‘distributing tips charged on credit cards according to a formula devised solely by the affected employees.’” It further states: “… a restaurant owner cannot determine whether or not he wants to be a ‘pooled house’ (for tips) — it is up to the employees only.”

Meanwhile, the love affair with ice cream continues across the country. According to businessinsider.com, Americans consume an average of 5.5 gallons of ice cream per person per year, the second most in the world. New Zealand gets the biggest scoop. Its residents enjoy 7.5 gallons each per year.

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