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  • Posts by Bernice Blessing
    Associate

    Bernice Blessing’s practice focuses on labor and employment, as well as hospitality and corporate law.  Bernice has experience providing guidance on legal issues ranging from wage and hour, discrimination and harassment, and ...

Pending the results of a lawsuit challenging the medical requirements under the Hotel Employees Health and Safety Initiative (“I-124”), the City of Seattle has agreed to delay enforcement of Part 3 of that law.  Part 3 requires hotels with 100 or more guest rooms to provide insurance at no greater than 5% of medical costs to certain low wage workers, as defined under I-124. If a low wage employee does not enroll in insurance or pays more than 5% of wages toward insurance costs, the hotel employer is required to provide a healthcare subsidy to the employee. 

Just when it seemed that service charges were all the rage, tip pooling has reemerged to grab the headlines.  Making the rounds from courts to agencies, and now Congress, the issue appears to have been settled by Congress that employers can impose mandatory tip pooling to include certain non-tipped employees.

Can Non-Tipped Employees Participate in the Mandatory Tip Pool?

Water question markUnder the Fair Labor Standards Act (the “FLSA”), employees who are customarily and regularly tipped can be required to participate in a mandatory tip pool.  Under a tip pooling approach, the employer directs tipped employees to combine their tips, and the employer determines a structure for redistributing the tips among the employees in the tip pool. As we have reviewed previously in this blog, employees in tipped positions have challenged mandatory tip pools that include non-tipped employees, such as dishwashers and cooks, asserting that they violate the FLSA. Because those employees are not customarily and regularly tipped, the argument was not without merit as the law has always made clear that tips are the property of the employees to whom customers given them.  However, the law also provided that tip pools may be imposed by employers.  The FLSA further allowed that employers may claim a tip credit against the federal minimum wage. 

TipsIn a recent blog post, we highlighted the trend amongst hoteliers and restaurateurs toward adopting service charge models to meet the rise in state and local minimum wage requirements. Although “no-tip” and “service charge” policies are receiving their fair share of attention in the news, employers with improperly designed tip pools are garnering their own headlines—and lawsuits. For example, Red Robin recently agreed to a $1.3 million settlement in response to class action claims against the company that it impermissibly included back of house kitchen staff in the servers’ tip pool. If your company requires employees to pool their tips, or is considering doing so, it will want to avoid some common and costly pitfalls that have beleaguered others. For starters: 

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 consistent and livable wages. If your company is considering making such a move, you will want to do your homework to avoid the negative headlines, legal complications and financial burden that can accompany improper implementation of service charge or tip pool policies. Today’s post will focus on service charges.

2015 HFTP Annual Convention and Tradeshow was held in Bellevue, Washington from October 21-24.

For those of you who attended, or did not attend the Convention and Tradeshow, my presentation, “Who Moved My Minimum Wage?! (The Future of Tips & Service Charges)”, is available below. It features topic of understanding tips and service charges and how they may be used to comply with varying minimum wage laws.

Feel free to contact me if you have any questions.

Bernice photo

Collective bargainingBernice Johnson Blessing is an Associate in GSB’s Labor and Employment, and Hospitality and Corporate Law practice group.  She is also the newest member of the hospitality team and has had a distinguished career in leading human resources teams for hotel management companies and major hospitality brands for more than 15 years. You can reach Bernice at bblessing@gsblaw.com or 206.816.1465.

From franchisers and companies hiring workers through staffing agencies, to participants in the so-called “sharing economy,” companies and individuals today enter into a variety of contractual arrangements to reduce costs and to maximize available capital, flexibility, talent and efficiency in delivering goods and services. The recent decision of the National Labor Relations Board (“NLRB” or “Board”) in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015), may change how many of these relationships function, and even, whether some of them are now too risky for some participants.

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Greg Duff, Editor
Greg Duff founded and chairs GSB’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.

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