Investigate Before Adding Service Fee, in Hospitality Law

Jeffrey Ruzal, a Senior Counsel in the Labor and Employment practice, in the New York office, wrote an article titled "Investigate Before Adding Service Fee."

Following is an excerpt:

In Carpaneda v. Domino's, federal district court in Massachusetts ruled that a Domino's Pizza delivery driver may present his claim to a jury that Domino's violated the Massachusetts Tips Act and Minimum Fair Wage Act by wrongfully retaining service charges that should have been paid to him as tips.

The Massachusetts Tip Act provides that if an employer charges patrons a service charge, all proceeds from that charge must be provided to the employee in proportion to the service provided. The Act provides, however, a safe harbor which permits employers to retain service charges if they provide patrons a written description of the service charge and explain that it is not a tip for its employees.