Thursday, April 16, 2009

Starbucks Ordered to Pay Back Tips

Restaurants and hospitality industries entirely depend on their patrons for existence. On the employees part, their salary and accumulated tips depend on their overall performance towards their customers.

Surprisingly, California courts heard and tried cases not only involving wage issues but also suits regarding tips.

Under the California labor law, managers and supervisors are prohibited from sharing in employee tips. In fact, in the case of Chou v. Starbucks, a San Diego Superior Court judge ruled that the company violated Business and Professions Code section 17200 when it allowed its shift supervisors to share in the proceeds of the baristas’ tip jar. Consequently, Starbucks was ordered to pay $106 million in back tips.

While tipped employees may not be forced to share their tips to those who do not regularly receive tips, bellhops, waiters, counter personnel serving customers and service bartenders are among those who should be receiving tips.

The Starbucks case is another victory for the baristas. This only goes to show that when the law mandates something, it shall be done. Otherwise, violators may face an employment suit.