Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

136 | Massachusetts Wage & Hour Peculiarities, 2022 ed. © 2022 Seyfarth Shaw LLP minimum wage requirement, the employer must supplement the employee’s wages to meet the requirement. 778 The tipped employee may receive tips directly or through a valid tip pool. 779 If the tip pool is invalid (i.e., it includes individuals who do not qualify to receive tips under the statute), the tip credit is lost, and the employer must pay the full minimum wage. 780 Calculation of overtime for a tipped employee, particularly where service charges are also involved, constitutes a complicated analysis that should be undertaken with the advice of counsel. 781 Massachusetts also stipulates that employers that pay less than minimum wage to tipped employees must inform those employees in writing of the applicable law and must make clear to them that the employer will be paying the lower rate. 782 An employer must always pay at least $6.15 in hourly wages to a tipped employee, even if the employee’s tips alone exceed the Commonwealth’s minimum wage of $14.25 per hour (as of January 1, 2022). 783 F. Liability for Violations Both companies and individuals may be liable for violations of the Tip Statute. 784 The statute defines an “employer” as “any person or entity having employees in its service, including an owner or officer . . . or any person whose primary responsibility is the management or supervision of wait staff employees, service employees, or service bartenders.” 785 Thus, the 778 Id. 779 454 C.M.R. § 27.03(2). 780 The regulat ions state that “ [i]f the employee is engaged in the serving of food or beverages, such a t ip-pooling arrangement must conform with the requirement s of M.G.L. c. 149, § 152A.” 454 C.M.R. § 27.03(2). This language suggest s that this provision does not apply to t ipped employees engaged in services other than the serving of food and beverage, but there is no guidance from the court or DLS interpret ing this language. 781 454 C.M.R. § 27.03(3) (“The overt ime rate for a t ipped employee receiving the service rate shall be computed at one and one half t imes the basic minimum wage, except where exempted by M.G.L. ch. 151,§ 1A.”). 782 Id . 783 DLS Opinion Let ter MW-2008-001 (Jan. 8, 2008). Although the regulat ions addressing the t ip credit and service rate only refer to t ips and not service charges, the DLS (the ent ity with authority to interpret the minimum wage laws) has taken the posit ion that t ips and service charges are interchangeable for purposes of the minimum wage statute and t ip credit . See id .; 454 C.M.R. § 27.03(2) (“The minimum wage rate for a t ipped employee may be comprised of both (a) the service rate paid by the employer; and (b) tips actually received and retained by the employee.”) (emphasis added). This is in cont rast to federal law. Under the FLSA, while a service charge paid to an employee count s towards the minimum wage, it is not a t ip and cannot be counted toward the $30.00 t ip requirement . See 29 C.F.R. § 531.55(b) (“ [S]ervice charges and other similar sums which become part of the employer’s gross receipt s are not t ips for the purposes of the Act . Where such sums are dist ributed by the employer to it s employees, however, they may be used in their ent irety to sat isfy the monetary requirement s of the Act .”). Rather, service charges (and mandatory gratuit ies) are wages under federal law and thus subject to the same tax t reatment as other non-tip wages. See IRS Rev. Rul. 2012-18, 2012-26 I.R.B. 1032. 784 Massachuset t s At torney General Advisory 2004/3, at 3. 785 M.G.L. ch. 149, § 152A(a) (2004) (emphasis added).