Legal Sea Foods is facing two class action suits which raise an interesting question: who should share in the tips?
Behind the suit is an allegation that the people who roll the silverware in napkins, who earn minimum wages, should not get a portion of the tips that are given to the servers and bartenders who earn $3.00 an hour and who primarily depend upon tips for their wages. While to some it may look as though the wait staff is being greedy for not wanting to share their tips, I think the better way to look at it is why is the restaurant having the wait staff pay the hourly employees instead of the restaurant itself?
Our office faced this situation years ago. Several hotels in Boston, usually ones with large function rooms, would have “captains” oversee the functions throughout the hotel and perform primarily managerial duties. Let’s assume that the captains are paid $80,000 per year. The question becomes how should they be paid? The hotel can pay them a salary of $80,000 per year per captain, or the hotel can say that they are part of the wait staff and should participate in the tips at the functions. As a result, captains would earn about $40,000 in tips which allows the hotel to only pay them a base pay of $40,000 in order to earn $80,000.00. The hotel then reduces its overhead by $40,000.00 per captain at the expense of the wait staff, many of whom are from other countries, do not know their rights, and could hardly afford to argue with the hotel out of fear of losing the job that sustains their families. Massachusetts wage laws allow the pooling of tips for wait staff, but it does not allow management to participate in the tips.
A Suffolk Superior Court sided with our clients and awarded substantial damages to the wait staff at the hotel. The law at the time allowed the judge the option of tripling the award of damages and assessing attorneys’ fees, which the court did in our case. Since then, the workers joined a union, and the captains are no longer receiving part of the tips but rather are being paid by the hotel as management. Additionally, the law was changed so that the tripling of the damages and attorneys’ fees is now mandatory.
The Legal Sea Foods case seems to be another example of how restaurant management seeks creative ways to reduce costs by making the wait staff pay the people who roll the silverware in napkins instead of the restaurant increasing the wages of these employees. As in many restaurants, as well as country clubs and function halls, the wait staff is usually not in a position to argue with the management fearing retribution. Wait staff are beholden to management for better shifts, such as a Saturday night shift instead of a Monday day shift, and often those who complain feel it in the pocket book. Certainly those who bus tables traditionally participate in the pooling of tips as they provide direct service to the customers. The question becomes, do the people who wrap your silverware in a napkin provide direct service because customers use the silverware and napkin? If the answer is yes, then why not include the musician who plays the piano during dinner, the custodian who keeps the floor clean, or the cook who prepares your meal? Allowing management to skirt its fiscal responsibilities to pay its hourly employees lead down the slippery slope of having the wait staff fund the payroll for many other positions in the places that we choose to dine. Most people when they dine tip their server based upon the quality of service provide. They assume that the tips go directly to the server, not to fund the payroll for the restaurant.
Restaurants are not the only ones to blame. Often country clubs, function halls, and hotels that host large parties like weddings include a mandatory gratuity for the event, usually 18%. The person having the function assumes that the gratuity is going to the server, but some establishments keep a portion for overhead, which, if not stated on the invoice separately as a service charge is directly in contradiction of the Massachusetts wage laws. The next time you eat out, either at a restaurant, club or function room, make sure your wait staff, if they provided you good service, is receiving from you the gratuity that you paid and they earned. If not, let them know that we are here to help.
Sincerely,
Michael K. Gillis, Esq.
GILLIS & BIKOFSKY, P.C.
1150 Walnut Street
Newton, MA 02461
Phone: 617-244-4300
Fax: 617-964-0862
E-mail: mgillis@gillisandbikofsky.com