FEDS revamp Waitress compensation due to e coli poisoning

Real Estate Agent with LoanCentral

Regulators are proposing a change in how food servers in the United States are paid due to recent e coli poisoning at a local restaurant. E Coli (short for "Escherichia coli" ), can cause serious food poisoning in humans and the bacteria is responsible for occasional product recalls due to unsanitary conditions at Major Slaughterhouse 's around the country. Clearly the fault of the food server known as the "Waiter" or "Waitress".  

Mr. Tommy Aikey awoke a few days ago with food poisoning after having a Steak meal served by Wendy Knowfalt, a food server at "Steak and Ail".   After Tommy Aikey reported the incident to local authorities, the legislators and regulators quickly got to work on a new bill that will prevent this type of food poisoning in the future.

From the experts within the government, all indications show that clearly the waitress was at fault for the ordeal.  

 Here is a breakdown of the new regulation and the three main components.  

1.     Waiters and waitresses will no longer be able to have their tips or other compensation based on the type of the meal they serve or based on the servers experience level, or service levels to the customer. For example:

    • A Waiter or Waitress may not be paid more for a steak dinner, than a Shrimp or chicken dinner. They must be paid the same regardless of whether the food comes out warm, or cold due to any delay where the food was prepared while the server was on break.
    • When customers order their meal, they must be presented with a minimum of 3 different menus from competing restaurants in the area.
    • The customer must wait 3 hours to order their meal after signing a disclosure showing what type of salad, starch and vegetable will be served with the meal. If the restaurant owner provides these "ancillary" items - he may not charge a higher margin on one item over the other.

 2.      Compensation to the waiter/waitress must be either paid by TIPS from the consumer, or by credit card - NOT by BOTH.                                      

 i.  Note that for these purposes, both the Restaurant itself AND the Wait staff are considered "Servers", thus - if the Credit card option is used to pay the cashier (owner of the restaurant), then NO TIPS may be accepted by the waitress.

3.      Anti-Steering Provision and Safe Harbor.                                      

i.      A "Server" may not "Steer" a consumer into a meal by a certain animal type if they will receive greater compensation from that meal, than in other meals which may have been offered the consumer... unless the offered meal is in the consumers' best interest (Safe Harbor).

1. Note that it is unclear within the proposed law how far this legal definition goes, and the Feds are offering NO CLARIFICATION. If the same steak dinner is available 2 blocks away, is it in the best interest to send the client to the competing restaurant?

2. Is serving Steak over Salmon in the best interest of the consumer's health. All questions that have severe penalties and will only be clarified during future inspections of the restaurant by the Food Inspector.  

Lastly, in another unrelated law that is being considered called QRM, or Qualified Reluctantly Meals- certain Restaurant owners should be aware that they may have to eat 5% of the consumer's meal prior to serving.    

Welcome to my world of analogies. Yes the story is bogus to illustrate how crazy and confusing the recent announcement of the Fed rule regulating and changing compensation to loan officers set to become effective on April 1st.

I'd like the solution of transparancy and lower costs to the consumer be found in the Free Market this country was built on. The SAFE Act will keep most of the bad originators out of the business. A 5 page GFE confuses the consumer - all they need is the Rate and total fees to obtain that rate to do a quick inclusive comparison. A breakdown of all costs, payments etc can be attached.

I trust the newly formed government entity with Elizabeth Warren will be working on this and I actually have great confidence in her ability to be successful.

We are all wanting to protect the consumer and have a more transparent lending process but I believe focusing on Loan Officer Compensation is not the answer.  


In this Story,                  the Is Equivalent to

Meat Slaughterhouse      Big Banks funding the loans

FDA                              Federal Reserve Board of Governors

Meat Distributor             Wholesale Lender

Restaurant                    Mortgage Brokerage Firm

Waiter/ Waitress             Loan Officer

Comments (1)

Jim Marcinkowski
Inlanta Mortgage - Fort Myers, FL

April 1st will be interesting, to see how this actually plays out. Your analogy is dead on. It's like blaming the car salesman for selling the defective car that Toyota made. Penalize the one who has the least to do with this debacle.  

Mar 08, 2011 12:40 PM