Restaurant Managers, Don't Pass Your Losses Onto Employees

Can an employer make pay deductions when a customer leaves without paying? In this video, I address this common question and explain why punishing a server for a customer’s bad decision can hurt employee morale.

First of all, because the server’s pay is probably set up as a tipped credit minimum wage, any deduction will take them below the legal minimum.

Even in a situation where the server is making minimum wage, you’ll have to check with the department of labor in order to make sure you’re following the regulations.

That said, I do not recommend docking pay for a customer’s mistake. This can really hurt employee morale and conflict with team-building efforts. Building a loyal team is crucial to creating a positive work environment. Making pay deductions will only weaken that loyalty and most likely cause more harm than good.

If you find that an employee is doing something wrong that leads to customers leaving without paying, then you can have conversations with that person or hold training sessions in order to better prepare your staff. These are options that address the problem head-on and promote constructive outcomes.

Although it can be frustrating when a customer leaves without paying, punishing your servers is not a good way to regain that lost revenue. Your long-term relationship with your team is much more valuable than a single bill not paid.

Think about employee morale first and foremost. Pay deductions are not the answer to dine and dash situations. If you want to change the situation, focus on helping your employees rather than punishing them.