Tip Theft in Rhode Island

Right now it’s perfectly legal in our state for restaurant owners and managers to steal gratuities from servers, bartenders, bussers, and other waitstaff. There’s no state law against it, and federal law says it’s cool so long as workers are left with enough money to make minimum wage at the end of the day.

I experienced tip theft firsthand over the 3.5 years I worked in room service at the Renaissance Providence Downtown Hotel. As a room service server I made $5.50/hr, so I depended on gratuities for most of my paycheck. Whenever a customer ordered room service, the hotel charged them an automatic 20% service charge, but also left a line on the receipt for “Additional Gratuity.” That seems like a fairly generous arrangement for servers, and it would be if all the money was actually going to us.

Both the hotel and our supervisors were skimming off our tips. First the hotel would take a chunk of that 20% service charge, then our supervisors who made two to three times our hourly wage would take 50% of the remaining service charge, as well as 50% of whatever we got on the “Additional Gratuity” line. Add that all up and we were taking home less than half of what customers thought they were giving us.

After unsuccessfully hassling my bosses about this set-up, I went to the US Department of Labor to file a complaint. I felt like something here had to be illegal. The DOL investigated for a few months, then told me that yes, the hotel and my managers were stealing our tips, but that there was nothing they could do about it because they were still leaving me enough to be over minimum wage. It wasn’t a total bust, though: the investigation spooked the bosses enough that they modified their policies. The hotel stopped taking a portion of our service charges, and our supervisors let us keep all of our “Additional Gratuities,” though they kept on taking half of the service charge. We won something, but it seemed insane that it had all been legal.

My hotel isn’t an isolated incident. Talk to anyone who’s been in the service industry long enough and they’ll have a similar story. Bosses, owners and supervisors have a variety of ways for tapping into servers’ hard-earned money. They skim off those mysterious service charges and administrative fees. They take an automatic portion of all credit-card tips. They insert themselves into the tip-pool. I’ve even heard stories about supervisors who directly ask servers for 20 bucks at the end of every night. And it’s all legal.

In states that have banned tip theft, workers are using the courts to fight these nasty practices. In a recent New York case, a judge ordered celebrity chef Mario Batali to pay 5.25 million dollars to waitstaff at his restaurants as backpay for years of stolen tips. In California, Hooters waitstaff have filed a series of class-action suits over stolen tip money among a long list of other labor abuses. At Boston’s Logan Airport, American Airlines Skycaps brought suit over misleading “baggage fees” that appeared to be tips but were in fact going to the company. New suits are popping up all the time.

In Rhode Island we don’t have the laws they have in New York, California, or Massachusetts, so workers here have no recourse when bosses like Mario Batali decide they want a cut of gratuities. A bill currently in the legislature is aiming to change that. Earlier this year, I worked with State Rep. Chris Blazejewski, State Rep. Teresa Tanzi, and others to formulate the anti-tip theft bill that Blazejewski submitted to the House in February.

The bill primarily bars managers, supervisors, and owners from touching any portion of an employee’s tips. It allows tip-pooling, because we want our bar-backs and bussers getting paid too, but it prohibits any supervisory employee from being a part of the tip-pool. It also bans employers from charging customers “service charges” and similar fees that appear to be tips but in fact go to the business, managers, or owners. Businesses can still add such charges, but if they don’t go entirely to waitstaff they need to be clearly marked as not being tips. Lastly, the bill will prohibit employers from charging waitstaff high fees when customers tips on credit cards.

All this will protect both workers and consumers. Blazejewski notes that “The legislation would prohibit fraud on the consumer and theft from the waitstaff…[Tip] money should go to the servers, not their employer, especially where many workers earn less than minimum wage. Besides being unfair to service workers, it’s also dishonest to consumers, who assume that tip is going to their waiter or waitress.”

The bill passed the House by a wide margin last Tuesday, with 64 in favor, 5 opposed, and 6 abstaining. The Senate version of the bill, sponsored by Sen. Erin Lynch, is still stalled in the Senate Labor Committee. It’s unclear if it’s being intentionally blocked or if it’s just being forgotten about. The bill has received strong local and national media coverage, including a big stories in the Huffington Post and on Boston NPR, so it seems unlikely the Senators are simply not noticing the legislation.

For now, we’re still hopeful we can push the act out of committee and we’re calling on all Rhode Islanders to call their State Senators to urge them on. You can find the call-rap and Senators’ numbers here.