Jeffrey (Jeff) H. Ruzal, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, was quoted in Law360 Employment Authority, in “DC Service Fees a Case Study for Tip Wage Phaseout,” by Jon Steingart. (Read the full version – subscription required.)

Following is an excerpt:

Restaurant service fees have emerged as an early byproduct of a move by Washington, D.C., to phase out businesses’ ability to legally pay subminimum wages to workers who earn tips, prompting the city’s attorney general to issue guidance to help operators comply with consumer protection law. …
Over a five-year period, the tipped minimum wage will increase until it matches the general minimum wage in 2027, thanks to Initiative 82, a ballot measure voters approved in November by a nearly 3-1 margin.

Before the initiative, known as the District of Columbia Tip Credit Elimination Act of 2022, passed, restaurants could pay tipped workers $5.35 per hour, although the wage floor for others was $16.10. The tipped minimum wage has already risen to $8 and is set to increase by $2 an hour in each of the next three years before it syncs up with the standard wage floor in four years. …

Jeff Ruzal, a member of Epstein Becker Green who also counsels New York hospitality employers, told Law360 a key distinction between the wage order and D.C.’s consumer protection law is who it’s intended to protect.

“When you’re talking about who’s going to be the plaintiff in a lawsuit or a complaint or an agency charge from the AG, is it going to be an employee or is it going to be a consumer?” he asked.

The fee guidance comes in response to how restaurants are implementing Initiative 82 and seems like it’s designed to benefit employees as well as customers, Ruzal said. But relying on a law that’s intended to crack down on deceptive fees seems like a roundabout way to help put money in workers’ pockets, he said.

“It doesn’t seem to me as clear as the state of New York,” he said. “If it’s presumed to be a gratuity and it’s not shared with the employee, then the employee is the aggrieved party.”


Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.