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Service Charges: Washington’s
Service Businesses Must Disclose Employee Share
By Amy
H. Pannoni and J.
Riley Lagesen
[October 2007]
As of July 23, 2007, service-oriented businesses in Washington
state, such as restaurants, bars, convention centers and hotels,
must disclose to customers what portion of a “service
charge” goes to the employee(s) serving the customer.
This disclosure must be clearly printed on all itemized receipts
and all menus. The law requires disclosure even if the service
charge is not labeled as such. Service charges include all charges
on receipts and menus, such as “service charge,”
“gratuity,” “delivery charge,” or “porterage
charge.”
When a business lists a "service charge" on a bill,
customers often assume that that portion of the bill is going
to the servers; that is not always the case. The new law ensures
that customers know where that money is going.
While the law does not define “serving the customer,”
the definition of “employee” provides guidance as
to the breadth of the new law. An “employee” is
a nonmanagerial, nonsupervisory worker. The definition includes,
but is not limited to, servers, busers, banquet housemen, banquet
captains, bartenders, barbacks and porters. Thus, this new law
covers employees providing both direct and indirect service
to customers.
It is suggested that all service-oriented businesses include
the following or similar language on their menus: "A service
charge of __% will be added for parties of __ or more. Of that
amount, __% will be paid directly to your server(s)." The
following language should be included on all itemized receipts:
"A service charge of __% has been added to your bill. Of
that amount, __% will be paid directly to your server(s)."
If this new law affects you or your business,
and you would like to speak to our hospitality group to ensure
that you are in compliance, please contact:
This advisory is a publication of the Hospitality and Restaurant Group of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may be given only in response to inquiries regarding particular situations.
Copyright © 2007, Davis Wright Tremaine
LLP.
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