Lawsuit Claims Service Workers at New York Waldorf Astoria Robbed of Tips

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A former banquet server at the Waldorf Astoria in New York City claims the hotel’s operators have violated state labor law by failing to pay service workers the entirety of customer tips and gratuities.

According to the lawsuit, defendants Park Hotels & Resorts, Inc. (doing business as Hilton Worldwide Holdings, Inc.); HLT NY Waldorf LLC; Hilton Domestic Operating Company Inc.; and Waldorf=Astoria Management LLC impose a mandatory “gratuity and administrative charge” on top of the cost of banquets held at the Park Place hotel. Customers reasonably believe that this surcharge, which falls between 22 and 23.75 percent of the cost of banquet services, is remitted to service staff as a gratuity given the amount falls in line with what’s normally paid to service workers as a tip, the lawsuit says.

The case alleges that in truth, the defendants retain a portion of the service charge despite intentionally structuring the fee “in such a way to confuse consumers” as to how much of the charge is remitted to non-exempt service workers, such as servers, waiters, bartenders, banquet workers, and other non-managerial staff.

“Unwary customers pay these service fees reasonably believing that the entirety of the service fee will be remitted to the service workers as gratuity payment, as is the widely accepted custom throughout the hospitality industry,” the complaint states.

According to the case, the defendants’ practice of retaining a portion of the “gratuity and administrative charge” or using part of the surcharge to pay non-service workers oversteps New York Labor Law, which dictates that all customer gratuities are to be retained in their entirety by tipped workers.

The suit seeks to certify a proposed class of all current and former hourly, non-exempt employees (including but not limited to servers, food servers, beverage servers, banquet servers, and employees with similar job duties) who worked for the defendants in New York at any time within the past six years, and until the lawsuit is resolved.