About Our Operation Charge
The hospitality industry is evolving in Florida, as it is across the country. With recent legislation at the federal & 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 the commission model 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.
Starting July, 1 2026, all Kyle G’s Oyster & Wine will charge a 16% operation charge to all in house purchases.
There are many changes and conceptions of terms used. Below are some definitions and FAQs to help answer any questions.
Operation Charge
An operation charge is any amount added to a customer’s bill (except for food, beverage, product, or tax) that the customer is required to pay. The term “operations charge” can include large-party automatic gratuities (which by definition are not actually gratuities because they are not at the discretion of the customer), service fees in commission-based pay models, credit card surcharges, or any other fee or charge. Any additional charge a customer must pay is an operations charge.
Gratuity
A gratuity is always completely voluntary. It is the customer’s choice whether to give a tip or gratuity, and the customer decides what the amount will be. The key factor is that any amount given is completely at the customer’s discretion.
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 16% commission of their total sales net of Comp & Voids. Commission employees are not subject to overtime pay per The Fair Labor Standards Act.
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 restaurant’s hostesses. This can cause a server or bartender to tip out approximately 20% or more of their total tip revenue. In our model the service team keeps all of the operation charge and any Additional Gratuity that is given.
How are your team members compensated in a commission model?
Our team is paid an hourly wage plus a 16% commission reflected as a 16% operation charge. We also have an additional gratuity line for exceptional service. Our service team receives 100% of both the service charge and the additional gratuity.
Are operation charges considered tips or wages?
An operation charge technically is the property of the restaurant, in which the restaurant then pays for hourly wages, benefits, etc. In this model, our service team does receive 100% of the operation charge.
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, and we are happy to say we lead the way with wages in our area and have the highest compensated culinary teams in our area. 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 for.