It is no secret that during the last few years, we have seen a surge in class action lawsuits alleging a variety of improper tip practices against restaurants and other employers in the hospitality industry. These lawsuits are typically brought under both the federal Fair Labor Standards Act (“FLSA”), which governs which employees are eligible to share in tips, as well as analogous state and local laws. These laws are extremely nuanced and complex, with violations often resulting in significant liability.
For these and other reasons, on October 14, 2015, Danny Meyer’s Union Square Hospitality Group
announced that starting in November, it will begin eliminating tips at each of its thirteen full-service venues, and implement a new program called “Hospitality Included.” While several high-end restaurants in New York City and Los Angeles have already eliminated tipping the past few years, this new program is extremely significant, as it is the first time a major American restaurant group will institute a zero-gratuity policy. You can read more about Danny Meyer’s program here.