Eileen Hannigan contributed to this post.
Washington’s Bureau of Labor & Industries has issued a policy to clarify state laws related to the payment of tips, gratuities and service charges to employees. This went into effect on March 6, 2019. The new policy generally follows existing law and clarifies L&I’s position on tip pools, service charges, disclosure requirements and deductions from tips. Below is a summary along with a link to the full policy memo from Washington L&I.
For the full policy language please click here.
Summary
- An employer must pay to its employees all tips and gratuities; and all service charges as defined under RCW 46.160 except those that, pursuant to RCW 49.46.160, are itemized as not being payable to the employee or employees servicing the customer.
- Tips and service charges paid to an employee are in addition to, and may not count towards, the employee’s hourly minimum wage.
- Tip pools are permitted and employers can require employees to pool tips. The pool cannot include any employees who are exempt from overtime under the Minimum Wage Act.
- Employers are required to provide employees with written disclosures regarding service charges including the percentage of the service charge that is paid. This information must appear in an itemized receipt and in any menu provided to the customer. See the policy link above for additional details and samples.
- If any portion of a service charge is not clearly designated as being retained by the employer, it is due to the employee(s) serving the customer.
- The employee portion of the service charges must be paid to employees who serve customers, excluding managerial or supervisory employees. Covered employees may include, but are not limited to, servers, bussers, banquet attendants, banquet captains, bartenders, barbacks, porters, and bellpersons.