One of the dirty underhanded practices that’s become increasingly common in California is to use sympathy for workers to pad business bottom lines. If you go to a restaurant in the San Francisco airport you’ll likely notice an add-on service charge for worker health benefits.
- You may rightly sympathize with people serving you getting a receiving wage, including health care
- But that should still be included in the price, not as a surprise add-on. It’s false advertising to say your entree costs $10 when it actually costs $10.50.
Worker pay is an employer’s responsibility, between the worker and employer within the bounds of law or between union and employer. It shouldn’t be an ‘add on’ responsibility of the customer. Regardless, the advertised price should be the actual price.
What becomes an even worse practice is charging a 5% add-on service fee for workers and not actually giving the money to those workers which is what the Los Angeles City Attorney suggests seems to be happening at Hyatt’s Thompson and tommie Hollywood hotels.
This 5% service fee attached to customer restaurant bills is at the heart of an investigation launched by the Los Angeles city attorney’s office, and it involves some of the city’s most celebrated restaurants at the adjacent Thompson hotel, Tommie hotel and Citizen News building: Mother Wolf, Ka’teen, Mes Amis, Bar Lis and the Terrace.
The city is even investigating the concern that two workers spoke out about receiving the service charge for workers and were fired as a result. Generally if a service charge is framed as being for workers, then it needs to go to workers. Not doing so is even more fraudulent than advertising prices that aren’t actually the prices.
San Francisco’s Marriott Marquis was just dinged for pocketing $9 million in service charges that presented as benefiting workers. L.A. has a strong ordinance on this:
L.A.’s ordinance states that service fees cannot be retained by a hotel employer but must be paid in their entirety to the hotel worker performing services for the customers from whom the service charges are collected. The ordinance also mandates that no part of these amounts may be paid to supervisory or managerial employees, and that the service fee must be paid to the hotel workers equitably.
One restaurant group operator reportedly claimed that the 5% service fee was being used “to shore up losses at the restaurants due to the COVID-19 pandemic.”
The simple solution to all of this, of course, is to charge the price that is listed as the price and to pay employees the amount that is promised to them. Then there’s no defrauding of employees, no defrauding of customers, and no legal risk to the owners or brand.
[…] law a mandatory charge which appears as though it would be for staff must go to staff though some hotels still flaunt this. Not so for the W Dallas – […]