Lawsuit Claims Embassy Suites Withholds Portions of Gratuities from Banquet Service Employees

New to ClassAction.org? Read our Newswire Disclaimer

A former Embassy Suites server claims the hotel chain fails to pay non-managerial service workers the full amount of mandatory surcharges paid by customers as gratuities.

The 19-page lawsuit alleges the defendants—Embassy Suites Employer LLC; Embassy Suites Management LLC; Congress Hotel, LLC and Veeder Hospitality Management, LLC—impose a mandatory service fee on top of the cost of banquet services, including the sale of food and beverages during banquet events, yet fail to pay the total proceeds of the surcharges to non-managerial service workers in accordance with the New York Labor Law.

The case explains that it is customary in the hospitality industry for companies to impose gratuity charges of between 18 and 22 percent on food and beverage bills. Thus, when customers pay mandatory surcharges for banquet services, such as those charged by the defendants, they reasonably expect the amounts to be paid as gratuities to service staff, including food and beverage servers, waitstaff, room service attendants, and those employed in similar hourly paid, non-exempt positions, the suit argues.

Per the suit, the manner in which service fees are presented to customers, not to mention the longstanding tradition of tipping for food and drink services, leads consumers to believe the gratuities charged by the defendants are being shared with service staff.

“Indeed, because of the way these service fees are depicted to customers, and the custom in the food and beverage industry that gratuities ranging from 18% to 22% are paid for food and beverage service, customers pay these mandatory surcharges reasonably believing they are to be remitted in total to the service staff as gratuities,” the complaint expounds.

According to the complaint, however, Embassy Suites retains a portion of the service fee to pay non-service workers. This practice amounts to a violation of the New York Labor Law, which prohibits employers from retaining “any part of a gratuity” or “any charge purported to be a gratuity for an employee,” the lawsuit says.

Moreover, the case claims the defendants’ practice of withholding from employees the full amount of service fees also oversteps the New York Labor Law’s requirement that workers be provided accurate, itemized wage statements.

The plaintiff says she worked as a breakfast server and banquet server at the Embassy Suites in Saratoga Springs, New York between August 2016 and July 2018. Per the complaint, the plaintiff typically put in an average of 30 to 34 hours each week and received an hourly wage of $7.50 plus tips.

The plaintiff looks to represent all current or former non-exempt workers employed by the defendants in New York any time within the past six years and until the lawsuit is resolved, with a proposed subclass of hourly, non-exempt employees including servers, food servers, beverage servers, waitstaff, room service attendants, or other employees with similar job duties.

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s newsletter here.