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Thread: charging 18% gratuity and NOT giving it to employees

  1. #1
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    Default charging 18% gratuity and NOT giving it to employees

    My employer (a winery) currently charges an 18% "gratuity" (NOT service charge) for events (usually weddings). The event staff does not get any portion of this gratuity, instead it goes back to the house. This is illegal, right?

    In addition, we are required to split the tips we receive during the wedding (this is a small amount) with the event manager. I understand that this is against the law as well.

    Do I need an attorney to pursue this or can I just go to the labor board? This is a large chunk of change for some of us employees.

  2. #2

    Default

    This can be a complicated issue.

    You state that the charge is a "gratuity" and not a "service charge." This answers the question. Gratuities must be given to the employee, service charges do not. However, just because it is called "Gratuity" on the check does not mean that it is a gratuity.

    The DLSE has found that a 18% charge placed on a customer's bill for massages was a service charge and not a gratuity. The charge was called a "gratuity" on the bill. However, because the charge was automatic and the customer had to pay it, it was deemed a service charge.

    In addition, it is possible for all such charges to be kept by the employer, even if they are gratuities, provided that the employer makes such policy clear to the customer. You should consult the contract that the client signs and see if it contains a disclosure that all such "gratuities" are retained directly by the employer.
    Michael Tracy
    Attorney
    http://www.laborlawradio.com

    Disclaimer: The above response is a general statement of the law and should not be relied upon as legal advice. It only assumes the facts that are stated in the message. The above response does not serve to form an attorney-client relationship.

  3. #3
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    Default 18% gratuity not given to employees

    The 18% is called a gratuity, but it is a mandatory charge. The customer (bride/groom) is required to pay this charge. However, there is no disclosure on the event contract about the gratuity being retained by the employer.

    Basically, the customer is under the impression that they already pd a gratuity so they never end up paying one. We rely on the minimal amount of tips that the bar gets (average of $13 per night.

    Based on the information I provided, are we entitled to all or part of the past "gratuity" that the employer has been charging?

  4. #4
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    Default Pizza Parlor Employee Tips

    Hello!
    My daughter has friends that work in a local pizza parlor and the following situation is happening:

    All employee tips must go into a "jar" and all tips are kept by management. At the end of each pay period each employee receives $1.00 of "tip" for each hour worked during that pay period.

    Also, management will pull money out of the jar at times for personal use and it is not included in the total.

    Is this practice legal? I worked in the food service industry for years when I was younger and we survived on our tips.

    Any advice is most appreciated!

    Thanks!

  5. #5

    Default

    Any tips must go directly to the employees providing the service. A manager may nor share in the tips at all. The law is pretty clear in this area.
    Michael Tracy
    Attorney
    http://www.laborlawradio.com

    Disclaimer: The above response is a general statement of the law and should not be relied upon as legal advice. It only assumes the facts that are stated in the message. The above response does not serve to form an attorney-client relationship.

  6. #6
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    Default Thanks

    Thanks for your reply...much appreciated!

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