Questions Mount for Wait Staff, Customers Over Service Charge Changes

While the Internal Revenue Service gave restaurants and other outlets that have mandatory gratuities a few years to get used to the idea that service charges would have to count towards a waiter’s wages, it seems that there are still questions regarding what will happen moving forward.

Some restaurants and cafes have already said that they will simply eliminate the practice, in which larger parties could be subjected to a surcharge of 18 or 20 percent to ensure that servers received a fair amount for their work taking care of customers. Others have opted not to require a specific amount, but simply outline two or three different options based on varying percentages.

However, wage and hour lawsuit attorneys have noted some interesting beliefs regarding the change and what it will mean. For example, a columnist in one Atlanta newspaper indicated that some eateries may stop hiring waiters and waitresses “and become counter service only.” That seems unlikely to many, as cafes and other entities that have enough room for large parties would struggle to pay rent and other costs until they moved to a smaller facility.

What is more likely is that the publicity regarding service charges and the difference between minimum wages for tipped employees could result in changes at the state or federal level. Some efforts have sought to ensure that servers will at a minimum make the same hourly wage as employees in other sectors.

Still, the process will need to be ironed out and while the mandatory gratuities will now be considered part of an hourly wage, there are numerous other regulations and statutes that may be difficult for employees to navigate if they feel that they have missed out on income. As one example, since the service charges count towards hourly pay per the Internal Revenue Service, they can also count towards overtime for staff that work more than eight hours over the course of the day or 40 hours in a given week.

People who think that they have missed out on pay they deserve because of improper overtime calculations or other issues may have legal remedies available to them. Learn more by visiting the Minimum Wage Lawsuits: Service Charge, Wage & Hour Class Action Lawsuit Investigation today. While there, you can fill out the submission form for a free case eligibility review. Qualified visitors will receive a no-cost legal consultation with one of our partner wage and hour lawsuit attorneys.