QUESTION

Is it legal to charge an automatic gratuity?

Asked on Jun 18th, 2013 on Entertainment Law - Nebraska
More details to this question:
I am a member at a country club and pay monthly dues. The club recently renovated the clubhouse and pool area. The pool has a snack bar window to purchase food and drinks from the club restaurant. My family often purchases sandwiches, drinks, ice cream and other food from the window, and charges it to our club membership number. I received my first club statement for the summer, and it shows I was charged 18% gratuity for all my purchases at the snack bar window. There is no sign or anything on the menu which states an automatic gratuity. The employee sits in the window and takes your order. You come back and pick it up at the window. This is similar to a fast food restaurant, and no service is provided to justify a tip or gratuity. My wife contacted the club by phone and was told to write an email to the director of membership. She spoke to the girl working the pool snack bar window today. The employee used a popsicle as an example. The sign on the window says a popsicle is $2.50. When she rings it up the receipt shows the actual popsicle is $1.75, and tax and gratuity are added to make the total cost of the popsicle $2.50. My wife asked why she had a tip jar out if the gratuity is included. The employee said they do not see any of the money that is called "gratuity" on the receipt. That all goes to the restaurant, not the employees. I know it is illegal to call anything which is mandatory a tip or gratuity. Mandatory charges must be called service fees, or something similar, and must be properly declared on the business income or payroll taxes. I am guessing the club method of charging mandatory gratuity without stating as such is illegal. I am guessing charging mandatory gratuity and not giving the money to the server or employee is also illegal. I want to write a letter to the club and protest this apparently new policy - it was not in place last summer. I want to tell them I will not use the snack bar as long as this policy is there.
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2 ANSWERS

Susan Marie Basko
Wow. I was in disagreement with you, until I read that the service employees are not actually getting these mandatory gratuities. This is extremely deceptive, if nothing else. The whole scheme sounds deceptive and illegal to me. It would be legal and not deceptive if the service people were being given the gratuities and if those were on top of their regular salaries. Good for you for spotting this situation. You should go to head of the club and complain. They may have been tricked by the snack bar owner into thinking this gratuity charge would be going to the employees. You can go as far as you want and complain as high up the legal chain as you want, but the first step with the most integrity is to complain to the club director and manager and ask them to sort it out. They are most likely unaware of what is really happening. They may be grateful to know.
Answered on Jun 19th, 2013 at 5:08 PM

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Acquisitions Attorney serving Lincoln, NE at Jayne L. Sebby
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Implicit in leaving a "gratuity" is that the money will go to supplement your server's wages. Food service establishments are allowed to pay way below minimum wage with the understanding that tips will both cover the difference and reward good service. Wait staff are also required to pay taxes on the tips they receive and employers often take 15% out of the regular wages for this purpose. Bring this issue up with management and/or the board if there is one immediately.
Answered on Jun 19th, 2013 at 5:07 PM

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