Federal wage laws treat "gratuities" and "service charges" differently.  As stated in the previous section (Introduction), your employer is prohibited from requiring you to share tips (i.e. gratuities) with kitchen workers, members of management, etc.  However, there is no such prohibition on "service charges" or "banquet fees." 

In fact, many restaurants distribute the "service charge" or "banquet fee" to banquet planners, managers, caterers, etc.  So long as the charge/fee is truly not a gratuity, federal law does not prohibit the employer's distribution of these fees to non-service personnel. 

This is extremely common in restaurants, hotels, and country clubs. 

But just because your employer calls the charge a "service" or "banquet" fee does not mean that the law will treat the fee as such.  In fact, I have had considerable success in proving that these types of fees are truly "gratuities" such that the employer must comply with the tip pool laws.

The law in this area is complicated and very fact-specific. 

Check out my videos for more information.  Or submit a confidential claim form here. 

What if my employer charges automatic gratuity or automatic service charges to my customers and I do not receive this money as a tip?