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
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
Some restaurants in Atlanta, Charlotte, and other cities have begun adding a service charge to diners’ bills. The trend has grown enough in the District of Columbia, for example, that its attorney general recently warned...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
Ohio- Substantially compliant acknowledgment clause WWSD, LLC v. Woods, 10th Dist. Franklin No. 20AP-403, 2022-Ohio-952- In this appeal, the Tenth Appellate District affirmed the trial court’s decision, agreeing that...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
A Miami restaurant’s mandatory 18% service charge did not constitute a “tip” under the Fair Labor Standards Act (FLSA) and therefore was properly applied toward satisfying the FLSA’s employee wage requirements, the U.S. Court...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
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
On August 23, 2021, the Massachusetts Supreme Judicial Court ruled in Hovagimian v. Concert Blue Hill, LLC, that the Massachusetts Tips Act requires that an employer pay service employees any “service charge” listed on an...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
Carroll v. City & Cnty. of S.F., 41 Cal. App. 5th 805, 254 Cal. Rptr. 3d 519 (2019) - Summary: Each alleged reduction of monthly disability retirement benefit payments for discriminatory reasons was continuing violation...more
Attention hospitality employers. Is that charge you add to a guest check a service charge (typically a set amount added to a guest check in lieu of a tip)? Or an automatic gratuity (such as a set amount for a party of 8 or...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
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