Paying tipped employees properly? It's harder than you might think

Bars and restaurants have been absolutely crushed by the COVID-19 pandemic. And just as they were starting to get back on their feet, the devastating second surge arrived, threatening to force yet another mandatory shutdown. But the virus isn't the only obstacle to the long-term survival of our favorite local restaurants, pizza shops, and dive bars. Massachusetts' wage and hour laws are incredibly protective of employees who rely on gratuities, including servers, bartenders, and the drivers who deliver your take-out. And with automatic triple damages attached to most wage violations in the state, mistakes can be incredibly costly if not outright ruinous. So, for employers running businesses with tipped employees on staff, the following refresher may come in handy as you prepare to weather what could be a very challenging winter.

Glossary of terms for tipped employees

To understand the Massachusetts Tips Act and related provisions of the state's wage and hour laws, you first need a quick vocabulary lesson.

Tip. Sum of money a customer gives as a gift (or gratuity) and acknowledgment of the service performed by a "wait staff employee," a "service employee," or a "service bartender," including any amount designated as a tip by a customer who pays with a credit card.

Service charge. Fee an employer charges to a patron to be paid in lieu of or in addition to a tip, for the benefit of its employees.