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Hawaii Supreme Court says hotel tip lawsuits can proceed

July 18, 2013 Destination Hawaii No Comments Email Email

egtmedia59The Hawaii Supreme Court ruled Monday that hotels or restaurants that apply a service charge for the sale of food or beverage services allegedly violate state law by not distributing the full service charge directly to its employees as tip income.

The high court’s opinion, answering a certified question from the U.S. District Court in Hawaii asking whether food and beverage employees could sue if a hotel failed to distribute the full service charge as well as disclose the practice to its customer, said the employees’ lawsuits against the companies can move forward.

“We now answer the certified question in the affirmative and hold that when a hotel or restaurant applying a service charge for the sale of food or beverage services allegedly violates [state law] by not distributing the full service charge directly to its employees as ‘tip income,’ … and by failing to disclose this practice to the purchaser of the services, the employees may bring an action under [state law] to enforce the employees’ rights and seek remedies,” the high court wrote.

Boston-based law firm Lichten & Liss-Riordan P.C. filed eight cases against resorts in Hawaii, including Marriott and Starwood Hotels & Resorts properties on Maui. The law firm calls it a major victory for service employees in Hawaii.

The cases were among more than a dozen against major Hawaii hotels that swept the industry some five years ago.

The lawsuits, claimed the hotels withheld from employees a portion of the average 20 percent food and beverage service charges they charged customers for banquets, events and weddings.

Edited by : Bill  Hurley

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