Hotel Finds Free Money, It Is Employees’ Tips!

[Capt. Obvious]

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.

Wonkette

[uppityperson]

1. wtf? k&r

[NYC_SKP]

2. Oh that's fucked up. President Hillary had this to say about that:

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. Can't find a thing about it.

I think President Warren or Sanders would take a stand.

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[pnwmom]

13. Yeah, let's blame her for everything in the world. Because she's like god, in your opinion.

Warren and Sanders are both fully capable of opening their mouths. What have they said about this situation?

[dsc]

19. so why haven't either one of them done so?

maybe because they are busy doing their jobs, fancy that. Just like Hilary is busy preparing her run.

[C Moon]

31. :/

[Orrex]

40. Clinton has also been silent about the menu selection at my local restaurant

I think Warren or Sanders would take a stand.

[leveymg]

3. Doesn't NY law also call that sort of thing theft of wages? Or, fraud? $500 lunch?

No matter what you call that, it's a fucking rip-off.

[randys1]

4. Capitalism american style, i.e. how stupid are we?

[KamaAina]

5. More here

http://www.democraticunderground.com/10026238328

[Egnever]

6. Um it says right on the bill it is not a gratuity

Pretty lame way to bill someone but it looks to be spelled out very clearly. There is no excuse for not leaving a tip on that bill.

[Lancero]

7. Except under Montana law they are essentially they same.

[Egnever]

9. I would maybe agree with that if it didn't say on the bill

The service charge is not a gratuity. It may be designated that under Montana law but I doubt it is in the majority of states and this bill is from New York so Montana has nothing to do with it anyway.

[pnwmom]

15. Montana is where the lawsuit was filed and where the person works. So Montana law has everything

to do with it.

It doesn't matter what verbiage the employer chooses to add to the bill. Montana law defines what a "service fee" is and the hotel can't just redefine it, clearly or not.

[Egnever]

18. The law suit has no connection to the bill shown.

The bill is from a new York restaurant that has no ties whatsoever with Montana.

Pretty sloppy story.

While I agree the practice described in the law suit is despicable and likely unlawful. The bill shown has nothing to do with the case and in no way implies that the service charge is going to the server. Quite the opposite.

If the bill in the Montana case looks anything like this bill however this is a lawsuit that is going to be lost.

[Pacifist Patriot]

38. Poor choice of graphic, but the laws are even harsher against employers in NY.

Very explicit burden on the employer to explicitly indicate which charges are and are not gratuities in a plain language contract, and for anything ambiguous, "The employer has the burden of demonstrating, by clear and convincing evidence, that the notification was sufficient to ensure that a reasonable customer would understand that such charge was not purported to be a gratuity."

[Egnever]

23. Also I don't think Montana law is as clear as you think it is

n Montana, however, state law provides that service charges that are added to a customer’s bill in lieu of gratuities must go to the non-managerial employee who served the customer or prepared the customer’s food or beverages. In other words, this money belongs to the employee, not the employer. For the purpose of service charges only, the statute states that this money may be subject to a tip pool. However, the law isn’t clear as to whether this tip pool must be by voluntary agreement among the employees or whether the employer may require it.

[A Simple Game]

28. The problem is you don't get the bill until it is too late. Does the bill

match the price on the menu? Or for parties does it match the agreed to price? That would make the difference for any decision I make on whether to do business there or not.

[Egnever]

29. No idea

I would never spend that kind of money on a meal to begin with. I highly doubt that the service charge of the bill shown comes with no warning though.

[A Simple Game]

32. Yeah I imagine the disclaimer is bottom right on the back cover in size 2 comic serif font.

And no, I would never pay 1/10th of that for a meal. I have never had a meal in a restaurant that was better than I could do myself at home for much less and in this case much, much less than just the service charge.

[csziggy]

33. That wasn't for just a meal

As in the first line of the quoted part of the article, "Are you planning to host a banquet soon, like a wedding" so it is a meal for a group. If I were planning a banquet for a group, I would expect a fee to cover gratuities for the staff. Trying to give a percentage in cash for a large group meal would be ridiculous.

If I negotiated a price for a banquet and then saw the extra 20% "service fee" I would expect that to be for service by the staff. And If I caught the disclaimer at the end, I would be raising hell - an extra 20% and I STILL have to make sure the servers get their tips? Fuck that! Management would be hearing from me and I would make sure no organization I am a member of would return to that facility for future events.

Organizations I am a member of that have events with banquets negotiate carefully and pass on the costs to their members. An extra unexpected 20% would make the different between breaking even and having a loss on a major event since those organizations simply don't have a large cushion for their events.

This is just like airlines charging extra for bags on flights. Rather than raising their rates, they're tacking on extra fees to make more money.

[Egnever]

35. not sure why you and the original author insist on making things up

The receipt shown is for a meal for 5 and is standard for the resteraunt in question their name is on the top of the bill you can look them up.

It also has absolutely nothing whatsoever to do with the court case the story is supposedly about.

The story is about banquets and the receipt is from a 5 person dining experience in one of the most expensive dining establishments in america.

One can only guess the author of the original article included it because of the high dollar amount shown on the bill .

While I agree that a practice of charging customers a service charge with the implication it is going to the servers and then not giving it to the servers is wrong, the bill shown is not in any way a demonstration of what is discussed in the suit.

[Pacifist Patriot]

39. Misleading graphic. Should have shown an event contract....

The graphic appears like a dinner bill, until you look at the line items closely. And it's for a venue in New York which requires the explicit language depicted.

The story is referencing the type of event that would have a negotiated contract signed in advance, normally with a deposit paid as well. It's the vagueness of some contracts that lead to this unethical business practice. I'd like to see what this company's contract looks like.

[ND-Dem]

8. what fresh hell is this?

[samsingh]

10. kick

[dissentient]

11. As is known, always give cash separately as a tip

never give a tip by credit card.

This way, shenanigans like this can be bypassed, as the server can just pocket the tip money directly.

[pnwmom]

16. That wouldn't work in this case because the hotel is stating that the fee is a regular part of the

bill, not a tip.

But the hotel will lose in the Montana case because they're re-defining the meaning of a "service fee" - which is defined in Montana statutes.

[dissentient]

21. Yea that is true. I would just never do business with this company ever again

What a slimy operation.

[sunnystarr]

12. hmmm operating and administrative expenses ...

Isn't that what the cost of the meal, drinks, and for a hotel, rooms is supposed to cover?? If we don't watch out they'll be tacking 20% to our grocery bills, mortgage, utilities, etc. etc. next. If the public doesn't complain then it will spread.

[Sherman A1]

14. I believe that

this bill is from 2009. While the practice may continue, I would think we could have a better example.

[C_U_L8R]

17. Chasing away customers

just doesn't seem like a very smart long-term strategy.

Poor poor Masa may not be around much longer
if they keep fleecing customers with such panache.

[Egnever]

20. I doubt that

Two things wrong with this. First that bill is not related at all to the case in the story and second mass is known as one of the most expensive restaurants in America. I doubt the customer under any illusion about their billing.
http://en.m.wikipedia.org/wiki/Masa_(restaurant)

This story is very sloppy which is sad because the complaint in the law suit sounds valid. The presentation of this particular bill as an example weakens what should be a compelling narrative by muddying the waters with something completely unrelated.

[C_U_L8R]

24. Garbage in. Garbage out.

Ha!! The story may well be incorrect.

Still Masa will charge you $200 if you cancel a reservation under 48 hours.
Well within their right to do so but its not a shining example of customer love.
And with the weather being what it's been, I imagine there may be some
unfortunate folks with empty stomachs and lighter wallets.

[Egnever]

25. Yea I doubt I will ever darken Masa's door

I have never been one to go for over charging as a status symbol. Having said that I doubt anyone going to that restaurant is under any illusion about the reasonable pricing there.

[Spitfire of ATJ]

22. That's false advertizing on their rates.

[Liberal_in_LA]

27. exactly

[Liberal_in_LA]

26. kick

[rocktivity]

30. They're also supposed to POST SIGNS INFORMING THE GUESTS that tipping is not required

because a "generous gratuity has already been provided by your host." The ad agency I worked for did that for the company year-end parties -- at a nearby Hilton hotel!


rocktivity

[olddots]

34. Capitalism is evolving into fascism

So called conservatives want to conserve fascism .

[sorefeet]

36. Zabawa is a bad name in Montana

Steve Zabawa is a right wing Koch lover and has tried to destroy medical marijuana in this state. I just don't trust the name.

[sybylla]

37. Same shit happens when you order delivery from some restaurants.

Check your bills and ask the delivery people. I did, and I found out that my local Pizza Hut not only collects a delivery charge, but they also share none of it with the delivery people while expecting them to clock out and deliver my pizza in their own vehicle on their own time.

I bitched about it on Yelp. Won't be eating there again ever - not even dining in.

[RiffRandell]

41. Employee's tips, but not enough to buy Paris a new purse. nt

Last edited Thu Feb 19, 2015, 09:40 AM - Edit history (1)