Tips/Service Charges Draft Administrative Policy

(Submitted on 9/5/18 by Lois Anne Hinn)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing..

TIPS AND SERVICE CHARGES ARE ADDITION TO AND MAY NOT COUNT TOWARD THE EMPLOYEES MINIMUM WAGE

(Submitted on 9/5/18 by Michelle Meyers)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do the right thing and take steps to protect restaurant workers from reductions in tips. Hard working Americans should be supported in their efforts to make a decent living. Restaurant owners must follow I 1433 and not reduce workers pay by including tips toward minimum wage. We all benefit when workers at all levels are able to obtain a decent standard of living.

Thank you

(Submitted on 9/5/18 by Cornelia Teed)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing...

(Submitted on 9/5/18 by Marcia Kutz)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing...

(Submitted on 9/5/18 by John S.)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing...

(Submitted on 9/5/18 by Karen Gilles)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing...

(Submitted on 9/5/18 by Kathleen Boley)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing...

(Submitted on 9/5/18 by Ed Bennett)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing...

(Submitted on 9/5/18 by Cornelia Shearer)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing - abide by and enforce the new tip law that says tips are not part of wages and are to be kept by the servers.

(Submitted on 9/5/18 by Sara DuBois)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing.... So, now, do it! The world of those who work and eat in restaurant is counting on you!

(Submitted on 9/5/18 by Joe Wiederhold)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing...

(Submitted on 9/5/18 by Erik LaRue)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

As an appointed official, I trust that you will do right thing...

(Submitted on 9/5/18 by Carol Sibley)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.

The intent of the law is clear, so active support form L and I is needed to assure that the intent is acted upon.

(Submitted on 9/5/18 by Shelby Heck)

Dear Director Joel Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.
As an appointed official, I trust that you will do right thing...

(Submitted on 8/25/18 by Helen Brooks, Sportsman Cafe)

I will continue to object to tips not counting towards mim wage. My reasons are simple. If tipped employees don't have to get the full minimum wage, there is more to pay the back of the house. All over, there is a shortage of BoH staff. They know how much more the servers make and there is only so far you can stretch payroll.
I don't like the tip pools because it seems to cause bad feelings and poor service. I have seen customers ask if they have to split tips and if so to put it their pocket because they only want them to have it. If they don't customer is upset, if they do fellow employees are upset. Some servers get the attitude they don't have to do any extra because they get the same if they give good service or bad. Its not a matter of trading them out, you have to have someone to trade with. Its getting harder and harder to find good staff.
I have worked in the service industry since I was 14., that's over 50 years now. I have covered every position and seen how different states do things, including the right to work ones that give the tip credits. I think we should continue to push for a tip credit.

(Submitted on 8/24/18 by Jason Kooi, Hollander Hospitality)

Hello, overall I think the draft of the policy for tips/gratuities/services charges is well down. There are a couple items I would like to address:

The term gratuities seems to be used synonymously with both tips and service charges (not necessarily by your department, but Federal law sometimes uses it to indicate a mandatory charge). I would prefer to see only the term “tip” used for voluntary tips from the customer and “service charge” or possibly “Automatic Gratuity/Mandatory Gratuity” for service charges that the business imposes on customers.

There is still inconsistency with the treatment of service charges as it relates to who has control. The IRS and WA DOR both consider service charges to be income to the employer because the employer is considered to have full control over handling those funds. For this reason, it is subject to state and local sales tax as well as B&O tax, and the IRS requires separate reporting for tips and service charges on tax returns. The employer portion of FICA taxes on tips are eligible for a tax credit, but that is not true for FICA taxes on mandatory gratuity or service charges. This is because tips are considered direct income to the employee and therefor the employer shouldn’t have to pay FICA taxes. According to this draft policy, if a business doesn’t post who receives the service charge, the default is for it to go to the employee. I strongly believe that as long as the state and federal government treat it as income to the employer, the employer should be able to exercise full control and not be required to post or disclose what happens to those funds. I do think that it’s in the best interest of the employer to be forthcoming about who service charges are distributed, but I think it’s an overreach to require this.

(Submitted on 8/23/18 by John Bagge, Twelve Baskets Catering)

In the catering industry, I have noticed that caterers like myself are calling the service charge something different like an Admin Fee, Catering Fee or Production Fee fwiw.

Thanks for this pdf on tips, tip pooling etc. Great Job!

(Submitted on 8/23/18 by Jim Green, Diamond Jim’s Grill Inc, North Fork Pizza & Brewing Inc)

Thank you for bringing the tip policy into the modern world. Employee wages and customer tipping have evolved over the last 30 years. Wages have gone up but the tip policies have stayed the same. All restaurant employees serve the customer. This updated policy on tip pooling allows all employees to benefit from customer tips and helps level the wage scale throughout the restaurant. I have been using a tip pool for the last 8 years at Diamond Jim’s Grill and it encourages teamwork and higher standards from all employees. Thank you for making the tip pooling practice legal.

Washington’s new law on tips and service charges should apply equally to ALL workers in ALL cities!

Since last Wednesday, September 5th, over 140 individuals across Washington State have commented via email to ESRules@lni.wa.gov urging L&I to revise the draft Administrative Guidance FAQ to clearly state that L&I will fully enforce tip and service charge theft protections for workers earning higher minimum wages in cities like Seattle, Tacoma and Seatac. The voters intended this law to apply equally to ALL workers in ALL cities in Washington. The lack of guidance for workers who earn higher wages undermines the intent of I-1433, and could lead to greater incidences of tip theft due to confusion by workers and employers operating under local minimum wage ordinances.

Please post the public comments that have been submitted via email with personal comments and the three requests included below:
Dear Director Sacks,

To protect all Washington workers from tip and service charge theft, and to align with the state law voters approved under I-1433, I call upon the Department of Labor to revise the Tips/Service Charges Draft Policy as follows:

1) Clearly state that I-1433’s provision “Tips and service charges paid to an employee are in addition to, and may not count towards, the employee's hourly minimum wage.” is applicable to all Washington workers, including workers in cities with higher minimum wage laws like SeaTac, Seattle and Tacoma;

2) Clearly state that L&I has the power to enforce tip and service charge violations experienced by any Washington worker; and

3) Include examples of tip and service charge violations from the higher minimum wage cities of SeaTac, Seattle, and/or Tacoma, in order to best inform workers in these cities of their rights and ensure employers are in compliance.


With appreciation,
Elena Perez, Director
Restaurant Opportunities Center Seattle

The employer should post the building with "no tipping allowed" or such and the employee should remind the customer of the policy; but if the customer still leaves a tip in spite of the policy, it should be given to the employee without reprisal or discipline, and recorded as required.