Clocking Out Before Cashing Out in Restaurants

“Cashing out” is restaurant lingo for completing all sales transactions, including credit card slip entries and tip payouts, at the end of a restaurant shift. Allowing servers to clock out and leave before their end-day paperwork is double-checked for errors and discrepancies can wreak havoc with balancing the cash register till. Making servers wait off the clock for final accounting and tip-outs can land you in hot water for state or federal labor violations.

Failing to “Count Every Hour” is one of the top three Federal Labor Standards Act violations that results in fines and back wages. Several U.S. Supreme Court rulings have found that if employees are “engaged to wait” as required by an employer, they must be paid for their time. Employees have two years to report violations and may do so anonymously. A slight increase in hourly labor costs by keeping servers on the clock until they’ve cashed out protects you from expensive penalties. Streamlining the cashing-out process will cut down on payroll hours.

It’s customary for many restaurants to give servers credit card tips in cash at the end of the shift. It's considered a mutually beneficial perk of the profession, as servers exchange smaller bills for larger ones to stock the cash register drawer with denominations for making change.

Break down the closing and clocking-out process step by step to find areas for improvement. Emphasize to staff the need for speed and accuracy. Discourage clock-riding and other time-wasters by personally supervising the process, even if it isn’t one of your normal duties, until an efficient routine is established.

Some restaurants distribute tips at a later date by check or cash. By law credit card tips must be provided no later than the next regular pay day. Paying by check may require different accounting procedures; consult a legal adviser familiar with the tax implications of this scenario.

Point of Sale systems typically include easy-to-use, speedy functions that make it impossible to clock out until credit card slips and tips are entered and processed. A printable report verifies claimed tips and the individual amount due. Even if a cashier is still busy with customers, a POS system makes it easy to distribute tips promptly because there's no need to calculate what's due.

If a server has to leave the restaurant prior to the end of his shift, a manager can override the POS system to close out finished tables or turn active tables over to another server.

Restaurants that hand-post time cards, tip reports and other closing paperwork may have a supervisor estimate hours and claimed tips, penciling in the info. Stow any cash tips in a sealed envelope in a secure place. Have the waiter review and initial the time card and collect tips when reporting for the next shift.