Tipsy Bean cafe owner accused of keeping servers' tips. What she said happened
The owner of Tipsy Bean Cafe, 2425 Peach St., was the subject of a firestorm of social media criticism Jan. 19 when it was claimed on Reddit.com that she was keeping electronic tips intended for servers.
Owner Gisele Littrell got so much negative feedback that she produced a Facebook Live video explaining that she has been keeping server tips left electronically since 2022. She said in the video that she has used the funds to pay more than the prevailing wage.
"Everything I did was in the best interest of my employees and in accordance with my understanding of the law," Littrell said Wednesday. "I pooled the electronic tips to pay higher, consistent wages, which my employees voted for, as opposed to lower base wages and splitting tips by shifts. I did not financially benefit from this policy."
Customers who left electronic tips were not informed of the policy for the house to take the tips.
In a post Jan. 20 on Facebook, which has since been deleted, Littrell apologized for misunderstanding the law and changing the job descriptions for servers that she said makes them tip-eligible and that she would pay employees electronic tips retroactively to August of 2022.
"I am currently working with the state to review if our records complied with the law," Littrell said later. "I am working with an employment attorney and have gained a great deal more clarity in regards to wage and handbook policy guidelines.
"I have a new tip pooling and wage policy, as well as, job titles and descriptions currently in place," she said. "I have made mistakes and am doing everything in my power to set things right."
Tipsy Bean has won best coffee shop in a Best of Erie contest four times in a row, starting in 2021. It displays work for sale by local artists and hosts events including live music and speakers.
The accusation that Littrell kept the tips surfaced on Reddit about three weeks ago, and hundreds of comments and accusations flew around for several days, making it onto the coffee shop's Facebook site, where they were soon deleted. With the intention of clarifying her position, Littrell live streamed a video on Facebook Live that was subsequently uploaded to YouTube.
Littrell said in the video that she considered all Tipsy Bean employees to be "shift leaders," who, as managers, would not be eligible for tips of any kind. She allowed servers to keep the tips left in cash.
Pennsylvania law states: "All tips and gratuities paid by credit card or other non-cash method of payment are the property of the employee receiving them.
"Employers are prohibited from deducting any credit card or other payment processing fees from employees' tips."
More: Erie's cup overflows with independent coffee shops. Find them here.
When asked if Littrell broke the law, Danielle L. Woods, press secretary for the state's Department of Labor & Industry responded:
"Neither the Wage Payment and Collection Law nor the Minimum Wage Act (both enforced by L&I) makes a distinction between electronic and cash tips for purposes of compliance," Woods wrote. "Tips, with very few exceptions, are considered to be the property of the employee. More information on Pennsylvania's regulations related to the minimum wage and tipped workers can be found" (on the pa.gov website).
Woods said if anyone had filed a complaint, she could not address it publicly.
"Whether a complaint has been filed or an investigation has been commenced is confidential," Woods said. "Accordingly, the Department of Labor & Industry cannot offer comment."
She said if a complaint were made and found to be true, and the state and owner came to an agreement, that would be public record.
More: In what used to be bank drive-through lanes, there could soon be a tiny coffee shop
"If a labor law violation is determined to have occurred, an administrative order or signed settlement agreement reflecting the violation and penalty would be publicly available," Woods said in an email Jan. 24. "At this time, L&I has not issued violations or entered into a signed settlement agreement with Tipsy Bean."
She said employees who believe they were deprived of their tip income can file a confidential complaint, and the department takes those complaints seriously.
"Any Pennsylvanian who believes they have experienced a violation of Pennsylvania's labor laws is encouraged to submit a complaint with the Department's Bureau of Labor Law Compliance online," she wrote. "The Department investigates all complaints."
In a recent visit to the coffee shop, a reporter found the debit card machine did not offer a way to tip electronically as it did on previous visits. There was a mug for cash tips sitting on the counter near the point of sale.
"We had to temporarily turn off tipping to transition to the new wage and tip policies," Littrell said. "The tipping option is currently active again."
Contact Jennie Geisler at jgeisler@timesnews.com. Find her weekly newsletter at https://profile.goerie.com/newsletters/erielicious/.
This article originally appeared on Erie Times-News: Tipsy Bean cafe tip-collecting allegations addressed by owner
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