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Understanding the difference between service charges and tips is critical for New York restaurant owners to remain compliant with state and federal labor laws. Misclassifying these charges can lead to legal disputes,...more
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
Starting July 1, 2024, California will make it unlawful for businesses to add any automatic service charges onto consumer bills. Service charges are mandatory fees tacked onto bills (often for the provision of services in the...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
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
DOLE Issues Guidelines and Procedures for Work-Related Permits and Visas - New Order or Decree - On October 17, 2019, the Department of Labor and Employment (DOLE) published an order providing guidelines on the issuance...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
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
As lawmakers continue to increase the minimum wage in states and cities across the country, many hoteliers and restaurateurs are implementing service charges and tip pools in order to meet rising costs and help workers earn...more