Miami restaurant service charges are not tips – CBS Miami
TALLAHASSEE (CBSMiami/NSF) — Ruling against a group of restaurant workers, a federal appeals court ruled Friday that service charges added to diners’ bills at a Miami steakhouse are not tips.
A three-judge panel of the 11th U.S. Circuit Court of Appeals upheld a lower court ruling that upheld Nusr-Et Steakhouse, which distributed money from the mandatory 18% service charge to employees to cover the restaurant’s minimum wage and overtime obligations, according to Friday’s decision.
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The restaurant workers who filed the lawsuit argued that the service charge was a tip and therefore could not be used to meet obligations under the federal Fair Labor Standards Act.
“If the charge is a tip, the FLSA (Fair Labor Standards Act) has prohibited Nusret from using this money to meet its minimum wage and overtime obligations to employees,” the ruling said, referring to Nusret Miami, LLC, which operates as the steakhouse.
“But if the charge isn’t a tip, Nusret could use it to meet his wage obligations under the FLSA, and the district court properly granted summary judgment.”
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The ruling said the steakhouse paid employees far more than the state minimum wage and found that service fee money was part of the workers’ “normal rate of pay.”
He pointed to a US Department of Labor regulation that tips are matters “determined solely” by customers.
“By this measure, Nusret’s service charge is not a tip,” said the 21-page ruling, written by Justice Elizabeth Branch and joined by Justices Britt Grant and Andrew Brasher.
“Most importantly, whether and how much to pay is not ‘determined solely by the customer.’ Indeed, these decisions are not at all determined by the client. »
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