O little town of Bethlehem… where college kids refuse to pay a mandatory 18% gratuity and are subsequently arrested! According to the Inquirer, a group of eight dined at the Lehigh Pub in Bethlehem and after allegedly receiving crap service - “they had to find their own napkins and cutlery while their waitress caught a smoke, had to ask the bar for soda refills, and had to wait over an hour for salad and wings” - paid the $73 bill but refused to pay the $16.35 tip. The restaurant called the cops, who arrested the kids. So who’s right?
We visited this topic long ago with City Paper’s food critic David Snyder, who is also a lawyer, and he broke down the details here. The short version is that both parties could be in the right because the law is murky and the actual wording of the tip policy is important. If it’s called a service charge, it’s not negotiable, if it’s a “tip or gratuity,” the customer may be off the hook. Snyder gave us an example of a similar case:
In September 2004, Humberto A. Taveras dined at Soprano’s Italian and American Grill in Lake George, N.Y. and left only a 10% tip instead of the 18% gratuity the restaurant required for all groups of six or more. Taveras claimed he saw no notice of the policy, but the restaurant claimed it was listed on the menus. Taveras was arrested and charged with theft of services. However, the prosecutor dropped the charges based on her conclusion that all tips and gratuities are voluntary.
Under the Fair Labor Standards Act… “tip” is defined as “a sum presented by a customer as a gift or gratuity in recognition of some service performed for him.” A tip is distinguished from a service charge, which the restaurant cannot use as a tip credit to offset the minimum wage. The key distinction between the two is that tips/gratuities are within the customer’s discretion, but a service charge is not.
In the Taveras case, the prosecutor decided to drop the case because the restaurant called it a “gratuity” instead of a “service charge.” However, if the restaurant had called a “service charge,” the prosecutor may have pursued the case.
In the Bethlehem case, the restaurant told the paper that “18 percent gratuity added to check of parties of 6 of more,” is printed on the menu and receipts. Ah, semantics with supper…
College Students Arrested for Not Paying Tip [Inquirer]
Tip Log: The Legality of Auto-Gratuity [Foobooz]
