Tip Law in Massachusetts

The sharing of employee tips has led to a fair amount of controversy in Massachusetts. The Massachusetts Tip Act, M.G.L. c. 149, s. 152A, sets forth employees’ rights to tips and service charges. Here are the basic details:

  • Employees are entitled to their tips and to receive them the same day that they earn them.
  • Managers and employers cannot share in tips.  This includes any waiters, counter workers, or others with any managerial responsibilities.  When an employee has any managerial duties, they cannot share in a tip pool.  For example, shift supervisors do not qualify as “wait staff” eligible to participate in tips pools under provisions of Massachusetts Tips Act, since those employees have some managerial responsibility.
  • Employees get “service charges,” which are anything that a customer would reasonably think would be part of the employee’s pay in lieu of or in addition to a tip. However, management can keep “house” or “administrative” fees if the customer is informed in writing about what it is and that it is not a service charge.
  • Tips can be pooled but only among wait staff, bartenders, and service employees “in proportion to the service provided.”
  • A “service employee” is someone like a masseuse who “works in an occupation in which employees customarily receive tips or gratuities, and who provides service directly to customers or consumers, but who works in an occupation other than in food or beverage service, and who has no managerial responsibility.”

Here are some common violations of the tip law:

  • Tip sharing with managerial employees, including assistant managers and supervisors.
  • Tip sharing with expediters and other employees who don’t service customers directly. However, it is lawful to share tips with bartenders and bus people.
  • Employers keeping service charges or administrative/house fees without proper written disclosures.

Employees who have their tip rights violated can sue for treble damages, attorneys’ fees and costs, just like any other employee who has their rights under the Massachusetts Wage Act violated.

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