Massachusetts Tip Act – No-tipping Policy

Employees at Dunkin’ Donuts have taken issue with their restaurant’s ‘no-tipping policy.’ Employees sued Dunkin’ Donuts on the grounds that the no-tipping policy and the implementation of that policy and it’s enforcement violates the Massachusetts Tip Act. G.L. c. 149 § 152A.

The Tips Act provides in part that “no employer or other person shall demand, request or accept from any wait staff employee, service employee, or service bartender any payment or deduction from a tip or service charge given to such wait staff employee, service employee, or service bartender by a patron.” G. L. c. 149, § 152A (b).

The case reached the Massachusetts Supreme Judicial Court where the Court was tasked with determining whether an employer can maintain a no-tipping policy and second whether an employer is liable under the Tip Act if “the employer fails to communicate the no-tipping policy clearly to customers, who consequently leave tips that are retained by the employer; and/or “the employer clearly communicates the no-tipping policy to customers, who nonetheless leave tips that are retained by the employer?”

The SJC ruled that an employer can maintain a no-tipping policy; but if “an employer has not clearly communicated their no-tipping policy to their customers, tips left by customers where service is provided by wait staff belong to those employees, and may not be retained by the employer.” Subsequently if “there has been a clear communication of a no-tipping policy to customers, the employer has not violated the Tip Act if the sums of money that nonetheless have been left by customers are retained by the employer, or placed in an ‘abandoned change’ cup for use by other customers.”

The importance of an employer properly and adequately communicating a no-tipping policy is paramount to the determination whether any additional money left by a customer is statutorily the right of the employees. One of the purposes of the Tip Act is to ensure customers that a charge or fees placed by an employer of wait staff is going to be remitted to the employees. In the absence of clear no-tipping policy conveyed to customers, it is reasonable that a customer who leaves money will expect it to go to the wait staff employees.

Unfortunately for wait-staff and service employees, the Massachusetts Tip Act does not prohibit employers from implementing a no-tipping policy. However if your employer does implement such a policy, your employer is not entitled to any money left behind by customers unless there is a clear communication of such policy to the customers. If you have any questions or concern regarding a similar policy don’t hesitate to contact Adam Shafran.



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