We previously blogged “Tips on Tips” regarding the lawful practice of tipping in California. Another facet of the tipping process has recently had a face lift in the law. How many times have you gone to a restaurant for a birthday party or office get together with a party of more than eight? And how many times have you seen an “automatic gratuity” or “mandatory service charge” tacked on to your bill as a result of your big party? Usually, when a patron sees that added gratuity, they feel that it is not necessary to add an additional gratuity since it has already been accounted for. Well, now, you’ll see that automatic service charge disappearing in restaurants in California.
The California Department of Labor has reinforced the definition of “tip” for servers in the food industry. Mandatory gratuities, essentially, is an oxymoron. “Gratuity” in itself is a voluntary practice on the part of the patron, who has the sole discretion to assign an amount as a tip. These mandatory service charges, however, does not allow for the patron to assign said amount, but rather, does it for the patron. This makes it non-discretionary as a tip should be. And since the assignment of the gratuity is not under the discretion of the patron, it is at the discretion of the employer to hand out tip monies. Since the employer is responsible for assigning value to the server’s work, rather than the patron who might have tipped the server significantly more, employees might be getting shorted on tips.
So, if you are a server in the food industry, and you observe mandatory gratuities being tacked on bills for tables you wait or serve on, contact an attorney to evaluate a potential claim.