Service charge law

MENU MENU • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Like everything else these days, the cost of accepting credit cards is going up. While for many years merchants grudgingly accepted card processing expenses as ‘the cost of doing business,’ today, more and more business owners are turning to credit card surcharging as a way to pass those costs onto their customers who choose to pay by credit card. In this article, we’ll look at current state laws and card association guidelines for surcharging and what you need to do to start adding surcharges. We’ll also discuss the limits that apply to the practice and whether it will be a good choice for your business. If you happen to need a payment processor, be sure to take a look at our top recommended Note that while there are somewhat complicated regulations about surcharging, a common loophole to offset processing costs is something called “ cash discounting.” This refers to a processing system designed to have the credit card rate be the baseline; a discount is offered for cash and debit customers. This is technically not a surcharge. Our favorite payment processor...

By clicking "Find a Lawyer", you agree to the Martindale-Nolo You should not send any sensitive or confidential information through this site. Any information sent through this site does not create an attorney-client relationship and may not be treated as privileged or confidential. The lawyer or law firm you are contacting is not required to, and may choose not to, accept you as a client. The Internet is not necessarily secure and emails sent through this site could be intercepted or read by third parties. Do you earn tips? Plenty of employees in Oregon do, including those who wait tables, serve and mix drinks, open doors, carry luggage, clean hotel rooms, or provide other services, from moving furniture to delivering newspapers. In fact, some employees earn more in tips from satisfied customers than in straight wages paid by their employers. When you receive tips as part of your compensation, your legal rights under wage and hour laws become a bit more complicated. The rules about what counts as a tip, how much your employer must pay you, and whether you have to contribute to a tip pool (among other things) all depend on the laws of your state. Although federal law also covers these issues, employers must follow whichever law—federal, state, or even local—is the most generous to employees. Here's what you need to know about federal and Oregon legal protections for employees who receive tips. You can find out more about Oregon minimum wage, tip rules, overtime standards, ...

When is a tip not a gratuity? When it's a service charge. In California, a worker's "regular rate of pay" must include any portion of a service charge that the worker receives. Otherwise, employers may be making costly wage and hour mistakes, particularly when calculating overtime and sick-leave pay. Gratuities are voluntarily left by customers, and under California law, they belong to the employee, not the employer, said Christina Tellado, an attorney with Reed Smith in Los Angeles.Service charges, on the other hand, are mandatory amounts set by an establishment and charged to customers. Restaurant and hotel employers sometimes get confused about the difference. They may call a service charge an "automatic gratuity" that they add to bills for large parties, banquets or private rooms, said Nancy Yaffe, an attorney with Fox Rothschild in Los Angeles. "But once you make it nondiscretionary, you convert it from a gratuity to a service charge," she said. Why does it matter? The federal Fair Labor Standards Act and the California Labor Code treat mandatory charges differently than discretionary tips. If an employer treats a service charge as a tip, it can get into trouble, because the employer will not be calculating, taxing or reporting wages properly, said Michelle Lee Flores, an attorney with Akerman in Los Angeles. If businesses do add a service charge to tabs, the amount shouldn't be variable, noted Brandon Takahashi, an attorney with Hinshaw & Culbertson in Los Angeles. O...

Posted Mar 23, 2022 The Eleventh U.S. Circuit Court of Appeals recently held that service charges added to diners’ bills are not considered tips under the Fair Labor Standards Act (“FLSA”). A group of current and former employees of an upscale steakhouse initiated a collective action lawsuit against Nusr-Et Steakhouse Miami—an upscale Brickell steakhouse, owned by celebrity chef “Salt Bae”—alleging that Nusr-Et violated the Fair Labor Standards Act when the 18% service charge was used by the restaurant to pay its minimum and overtime wage obligations. Under the FLSA, tips are not considered wages and are not part of a worker’s regular rate of pay. Thus, employers are not allowed to utilize tips to offset the employer’s obligations to pay minimum and overtime wage obligations. When evaluating whether the 18% service charge was a tip, the Court rejected the employees’ argument because a diner had no discretion to not pay the service charge. In weighing the employees’ arguments, the Court considered whether the employees’ regular rate of pay was in excess of one and one-half times the minimum hourly rate. It was determined that Nusr-Et paid its employees amounts ranging from $23.68 to $51.58 per hour: well in excess of Florida’s minimum wage. Citing 29 C.F.R. §531.52, the Court noted that for a payment to be considered a tip, the payment must be “voluntary [in] nature” and that the amount of the tip be “determined solely by the customer.” The Court also evaluated 29 C.F.R. §5...