Westport Hospitality Corporation to Pay $315,000 to Settle Allegation of Violating the Massachusetts Tip Law
In April 2009, the Attorney General's Fair Labor Division began an investigation after an employee filed a complaint alleging that LaFrance Hospitality charged an 18% gratuity to customers who held functions at their two facilities, and failed to distribute that gratuity to the service staff assigned to the function. The Massachusetts service charge and tip statute requires employers to distribute any and all service charges and tips paid by patrons to wait staff employees. The statute prohibits employers from demanding, requesting or accepting any payment or deduction from a tip or service charge.
At the request of the Attorney General's Office, LaFrance conducted an audit its payroll and business records for 2007 and 2008 and discovered that it had failed to distribute the 18% fee it imposed to the wait staff employees as required under the Massachusetts law. As a result, LaFrance and his company have agreed to pay $300,000 in restitution to over 50 current and former employees, as well as a $15,000 penalty to the Commonwealth. As part of the settlement agreement, restitution will be paid to all employees by December 31, 2010, and LaFrance Hospitality has changed its written policy regarding the imposition of the 18% house fee so that it is compliant with the Commonwealth's tip statute. Throughout the course of the investigation, LaFrance and his company cooperated fully with the Attorney General's Office.
The Attorney General's Office is responsible to enforcing the laws regulating the payment of wages, overtime, and tips to employees in the Commonwealth. Employees who believe they have not been paid all their wages or that their rights have otherwise been violated should call the Attorney General's Fair Labor Hotline at (617) 727-3465. More information about the wage and hour laws is also available in multiple languages at the Attorney General's Workplace Rights website: www.massworkrights.com.
The matter was handled by Assistant Attorney General Anita V. Maietta and Chief of Investigations Amy Goyer, both of Attorney General Coakley's Fair Labor Division.