There’s been a lot of buzz about tipped wages as Election Day approaches – and hospitality employers will want to track key proposals that may have a huge impact on pay practices. Former President Trump and Vice President...more
The tip wars between hospitality employers and employees continue unabated. Numerous lawsuits contend that restaurants and other employers wrongfully retain or require sharing of customer gratuities, as well as violate Fair...more
The Office of the Attorney General for Washington D.C. (OAG) recently reminded hospitality employers in the city who use mandatory service charges and other fees that they must properly disclose such charges to guests under...more
Back in 2019, I posted about the difference between a Service Charge, an Automatic Gratuity, and a Gratuity/Tip. I explained that a service charge is typically a set amount added to a guest check in lieu of a tip. An...more
The Washington State Department of Labor & Industries (L&I) released a draft administrative policy regarding tips, gratuities, and service charge requirements for employers. The new policy, titled “Tip, Gratuity, and Service...more
Employers in the hospitality industry have been through it all in recent years – from the devastation of the pandemic to ongoing labor shortages to an impending recession. These challenges and dramatic changes have surely...more
On June 28, 2022, Rhode Island enacted new “tip protection” legislation. The law, which applies to all employers of tipped employees, prohibits employers from retaining employee tips, creates new requirements for tip pools,...more
For years, Kentucky has been one of the few outlier states that further complicated tip pooling by requiring all tip pools to be voluntary. While federal regulations have flipped and flopped with the tide of the changing...more
In the current battle to hire and retain good workers, employers have developed creative ways to balance employees’ increased compensation expectations against the costs of running a business. In addition, restaurants using...more
Hospitality employers who utilize the “tip credit” under federal wage and hour law may feel as if they operate with a bullseye on their backs given the multi-prong assault underway against the practice. Not only are you in...more
On March 18, 2022, the U.S. Court of Appeals for the Eleventh Circuit upheld a district court’s decision that an 18% service fee charged at the upscale Miami steakhouse of celebrity chef Nusret Gökçe was not a “tip” and was...more
On March 18, 2022, the Eleventh Circuit Court of Appeals ruled in Compere v. Nusret Miami, LLC, a collective action under the Fair Labor Standards Act (FLSA), that Nusr-et Steakhouse properly used automatically charged fees...more
When writing his famous line in Romeo and Juliet, Shakespeare clearly was not thinking of the Massachusetts Tips Act. The Supreme Judicial Court (SJC) recently issued a reminder that, in fact, a name can be critical to...more
At a city council meeting which began on November 3, 2021, and ended on November 4, 2021, the West Hollywood City Council voted to increase the minimum wage for hourly workers in West Hollywood. In response to significant...more
Although it may have intended for a customer charge to be treated as an administrative overhead fee separate from gratuities paid to its employees, a country club’s reference to the amount as a “service charge” in some...more
Massachusetts is seeing an increase in Tips Act claims, and the Massachusetts Supreme Judicial Court (SJC) just reinforced that a lack of clarity in fee- and tip-related documentation may result in employer liability,...more
Agreeing with the district court, the Court of Appeals for the Fourth Circuit has concluded that the mandatory service charges imposed by a restaurant on dining parties of six or more were not “tips” under the FLSA. However,...more
A service charge can provide a welcome boost to a business’ bottom line, but employers must manage and mitigate the risk of lawsuits, disgorgement and damages. Recent developments across the nation serve as a reminder that...more
A recent settlement between Seattle chef Tom Douglas and his restaurant employees highlights the potentially costly technical requirements of Washington’s automatic service charge laws for hospitality businesses. ...more
Upsetting what many considered settled precedent, a California Court of Appeal has held that a mandatory service charge may qualify as a “gratuity” under California Labor Code Section 351 that must be distributed to the...more
A California appellate court just held that mandatory service charges added by banquet facilities to their contracts may need to be paid to banquet service employees essentially as a form of a gratuity. The October 31, 2019...more
Beginning September 3, 2019, 100% of the service charges collected by hotels, restaurants and similar establishments shall now be distributed equally among all covered workers, excluding managerial employees, pursuant to...more
Over the summer, news broke that Surly Brewing Co. was found liable by a Minnesota court for violations of the state’s tip-pooling law. The brewery, which operates a large beer hall in Minneapolis, was accused by a former...more
Most employers are familiar with the basics. A tip is a voluntary amount of money a guest leaves for an employee over the amount due for the goods sold or services rendered. ...more
Service charges, administrative charges, surcharges, house fees—whatever you call those charges assessed for food and beverage service in restaurants and in hotels—the rules about how they need to be disclosed to guests and...more