Hotel Finds Free Money, It Is Employees' Tips!
Are you planning to host a banquet soon, like a wedding or maybe a measles party? Haha, of course you're not hosting a measles party, because no one is doing that, dummy. But suppose you're having one of those gay weddings we keep reading about, with a cake, because you found a bakery whose religion wasn't violated when they baked a cake and sold it to you, and you get the bill afterward, and, hello, what is that 20 percent fee at the bottom? A "service fee" has been tacked onto your bill!
Okay, you are probably thinking, that's fine, because that service fee will go to all of the nice servers who handed out cake so efficiently, and the bartenders who helped all your friends get drunk on delicious cocktails, and the staff who set up your gorgeous decorations! And yes, that "service fee" is often distributed among the service personnel, and that is fair, plus, also it is possibly the legal thing to do. But sometimes, the service fee is just code for "the hotel raised your banquet price by 20 percent and you thought that was a tip, but really the hotel just kept it."
It seems that some employers in the hospitality industry are thinking "how could we make some easy free money? Hey, we could steal it from our employees' tips!" And employers are tacking service fees onto customers' invoices, but instead of giving this tip money to traditionally tipped employees, like wait staff, employers are keeping it. This is a terrible thing to do to tipped employees, because these workers can be paid way less than the minimum wage -- it's assumed that they'll make it up in tips. And they probably can, unless their employers
steal reclassify it.
Laurie Zabawa, a Hilton Garden Inn banquet manager in Bozeman, Montana, filed a lawsuit in October 2014 claiming that her employer did exactly that. According to Zabawa's complaint, Hilton had for years added a gratuity fee to banquet clients' bills and then distributed the money to the employees who had worked the banquet. When Hilton outsourced its banquet services to Gateway Hospitality Group, Gateway was like, hey banquet employees, how about if we raise your base pay by $1 per hour and then we'll just keep the 20 percent gratuity, mmmkay? And the banquet employees were all, no! Because $1 per hour doesn't even come close to the tip money we're losing in this deal! And Gateway said, you know what, Laurie Zabawa, go ahead and fire those whiners. Like a boss, Laurie Zabawa refused, was demoted, quit, and sued. Montana law has this to say about service charges and tips:
"service charge" means an arbitrary fixed charge added to the customer's bill by an employer in lieu of a tip. It is collected by the employer and must be distributed directly to the nonmanagement employee preparing or serving the food or beverage or to any other employee involved in related services, pursuant to a tip pool agreement.
So it sounds like Laurie Zabawa might have a pretty good case, because of the part where it says service charges "must be distributed directly to the nonmanagement employee involved." Laurie Zabawa, we are rooting for you! As customers, we strenuously object when businesses trick us by thinking we are paying a tip, and then they rip off low-wage employees who help us and bring us delicious food and beverages. Businesses, if you want to make more money, charge us 20 percent more and see if we keep going there, but stop pretending that fee is a tip, because that is just terrible behavior that we hate.