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Employees should get income from service charges


POSTED: 01:30 a.m. HST, Jul 18, 2013

~~<p>Some Hawaii hotels and restaurants have placed themselves at financial risk by ignoring a 13-year-old state law requiring that service charges be passed on to their employees as tips. The state Supreme Court this week upheld the applicability of that law for pending lawsuits, paving the way for employees to pursue and collect past gratuities. The hold-out hotels should prepare to pay workers their rightful share to end the legal battle.</p>
<p>Numerous hotels appear to have ignored a 2000 Hawaii law that hotels and restaurants must distribute &ldquo;service charge&rdquo; proceeds directly to their employees as &ldquo;tip income&rdquo; on top of food or beverage prices. They have rebuffed employees&rsquo; lawsuits to recover income by maintaining that since the statute was established under consumer protection instead of labor law, the workers could not sue. They maintained tips are not recognized as salary by some unions because they are not included in determining union dues. Those are weak arguments.</p>
~~

Some Hawaii hotels and restaurants have placed themselves at financial risk by ignoring a 13-year-old state law requiring that service charges be passed on to their employees as tips. The state Supreme Court this week upheld the applicability of that law for pending lawsuits, paving the way for employees to pursue and collect past gratuities. The hold-out hotels should prepare to pay workers their rightful share to end the legal battle.

Numerous hotels appear to have ignored a 2000 Hawaii law that hotels and restaurants must distribute “service charge” proceeds directly to their employees as “tip income” on top of food or beverage prices. They have rebuffed employees’ lawsuits to recover income by maintaining that since the statute was established under consumer protection instead of labor law, the workers could not sue. They maintained tips are not recognized as salary by some unions because they are not included in determining union dues. Those are weak arguments. Login for more...



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