Hotel To Pay Out $1.3 Million For Taking Waiters' Tips

Crowne Plaza taking waiters tipsTacking a 15 or 20 percent gratuity charge on a bill is a good way to ensure that your waitstaff isn't stiffed by stingy patrons. It turns out that it's also a way for management to pocket some extra cash while stiffing its waitstaff. Such practices have becoming increasingly common, or at least increasingly prosecuted. The Crowne Plaza Hotel in the Berkshires is now the latest establishment to agree to a massive class-action payout to current and former service employees.

Patrons at all the hotel's banquets are charged a 20 percent service fee. Under state law, only employees directly involved in the service of customers are entitled to that money. But according to the lawsuit, filed in November 2009, the Crowne Plaza kept a third of the tips, reports The Berkshire Eagle. The hotel has agreed to a $1.3 million settlement, but admits no wrongdoing.

One hundred and fifty current and former employees are covered by the lawsuit, and those who served for the longest period will be receiving checks in the tens of thousands of dollars, assuming the settlement receives final approval at a hearing on May 1.

"We only make $2.63 an hour and the waitstaff relies on tips," Anthony Chavarry, the lead plaintiff, told The Berkshire Eagle. "So a substantial portion of our income was being skimmed off the top."

Tip-snatching has become an epidemic in the Berkshires, the touristy highlands of western Massachusetts and Connecticut. There have been three other settlements in the last four years; the largest was $14,750,000, paid out by the Canyon Ranch resort in 2008.

But the issue isn't limited to luxury New England hotels. In 2008, a court forced American Airlines to pay $325,000 to nine current and former skycaps at Logan International Airport. After the airline imposed a $2 curbside baggage fee, the lawsuit claimed, most passengers assumed that the fee went to the skycaps, and they stopped tipping them. The airline contended that the fee was in no way intended to replace tips, but the judge said that's what it was clearly doing regardless.

Right now, there's a lawsuit pending against the Harvard Club of Boston, which levies a surcharge on members "in lieu of gratuity." That money goes to the club's operating expenses, and never the employees. Although the club claims that waitstaff is told that it's a no-tipping establishment, this isn't relevant under Massachusetts law, reports Harvard Magazine.

All that matters is whether the customers know. It's unlawful for a diner to pay that extra money, believing it's a reward for good service, if it actually ends up in the manager's wallet, or toward reupholstering the sofa.

Next: JFK's Teenage Intern Details Their Alleged Affair In New Book

Don't Miss: Companies Hiring Now

Stories from Come Recommended

Add a Comment

*0 / 3000 Character Maximum


Filter by:

How do you report resorts that take the tips from the staff, giving the staff NO tips at all!! Where do I go to report this ??

June 18 2012 at 2:22 PM Report abuse rate up rate down Reply

Someone should take a look at the cruise lines policy of a daily fee, most often $10 per passenger for supposed tips for the crew. I wonder if any of that money is skimmed by the cruise lines.

March 03 2012 at 8:06 PM Report abuse rate up rate down Reply
Jn Brown

always tip cash. i never worked in any place management did not steal employees money

March 02 2012 at 11:07 AM Report abuse rate up rate down Reply

Service staff should be paid at least the state min. wage ($8.60 in Oregon) and tips just additional..thats the law in Oregon and resturants seem to do well with it..
Skimming tips by management,,should have involved jail time.

February 15 2012 at 5:47 AM Report abuse rate up rate down Reply

"We only make $2.63 an hour.....WHAT!? Seriously, this can't be correct. They'd be better off working at McDonald's for minimum wage rather than at this pay scale. Unless you're getting $10-15 hour in tips. It can't be cheap living in the Massachusetts/ Connecticut area.

February 15 2012 at 2:33 AM Report abuse rate up rate down Reply
1 reply to bassd220's comment

That is correct. It is the standard wage for service workers in any industry where "tips" are accepted. Some workers do make good money in tips. It depends on the place, the clientele, the day of the week, and events or non-events scheduled. A service worker's pay is NOT a steady paycheck. They can walk out with $600 a night working in a nightclub on a Friday or Saturday night, $200-300 on a good night in a decent restaurant, or sometimes $15-$50 for standing on their feet and working a 12 hour shift on a "bad" day, which could be Mondays- Fridays at any given service joint.

February 15 2012 at 4:20 AM Report abuse rate up rate down Reply

it is the same thing when restaurants charge a delivery fee but that money does not go to the drivers. People believe that fee goes to the drivers which in 99% cases it does not. That is decieving the public as far as I'm concerned.

February 15 2012 at 2:31 AM Report abuse rate up rate down Reply

WOW... That's just messed up. Complete disrecpect towards their staff and lso something that would mot likely mak the average patron very upset as well. I make a pratice of tipping well because I had work when I was younger that was tip based. I worked at a Denny's even and that is where I could say I made my mind up to be sure to tip well. I was stiffed and tipped so poorly while working there I had nights I was forced to declare more tips then I truly mad!. I still recall after 14 years this one group that came in every single Saturday evening. I was somehow always put on this very large group, 10+ each time. They where people from a car show in the Scottsdale Pavillions and all had serious money, or at least enought to own very very rare and expensive autos most dream of. Anyways, to the point here. Their check was always well over 200 dollars and the average tip I got was $15. No matter the bill, $15 for the 2 hours worth of demanding service they required. After 4 months of this I walked out as they came in because the manager said that I had to move from my section where I was doing just fine and making ok tips to cater to these butt heads again. I swore to myself I would never be that way and haven't ever since. Now if the company was stealing on top of the small tips we made I know it would have caused a huge uproar. I dated a girl who worked at a sports bar that required the wait staff to pool tips. The owner was there every night to hand them out, but if they made over $15 an hour he would take any amount past that mark and either pocket it or something other then give it to the hard working people who kept his bar running. They all put up with this for some reason, but they all where like 19 to 22 so being younge probable had alot to do with it. I was shocked when she told me this was standard practice and disclosed at the begining of training. It's theft plain and simple to me and those who rip off their employees this way should be subject to civil & CRIMINAL justice!

February 15 2012 at 1:35 AM Report abuse rate up rate down Reply
1 reply to oaoroho's comment

Why the hell do I always put a damn E at the end of young.... I know it doesn't belong their, but I always do it damn it....

February 15 2012 at 1:37 AM Report abuse rate up rate down Reply

Crooks! Now those who are accustomed to staying or using one of these facilities can boycott them. These arrogant people who own these hotels and set outrageous rules should fall by their own standards.

February 14 2012 at 10:29 PM Report abuse +2 rate up rate down Reply

That is standard practice within the hotel industry for the hotel to take a portion of the banquet tips. This is not to be confused with restaurant tips or bar tips ... only banquet. In banquets it's called a service fee instead of a tip. I work in the industry and have worked in three different states that allow it. I certainly do not agree with the practice and feel it should be banned. The money belongs to those who worked the function!

February 14 2012 at 10:11 PM Report abuse rate up rate down Reply

This is precisely why I always pay my waiter in cash, face to face. What he or she does with it after that is none of my business. They can keep it, share it, hide it, whatever, they earned it.

February 14 2012 at 9:24 PM Report abuse +3 rate up rate down Reply
1 reply to TexasTR24's comment

Right Texas, not only that but come on now, this is 2012 and they make 2 something an hour plus tips? What about the restaurants that are not up scale, or high end where the waitstaff doesn't get the big tips, and sometimes, no tips at all. I think they should ALL make at least min wage plus tips. With some of the things they have to put up from the public, it's a shame, and no, I do not work at any restaurant .

February 15 2012 at 1:59 AM Report abuse rate up rate down Reply

Search Articles

Picks From the Web