The Attorney General's Labor Bureau has reached an agreement with GrubHub Inc. in its investigation of tip collection with the company's restaurant clients that will ensure all workers receive their full tips from online orders. In February of last year, an Upper West Side restaurant was accused of stealing tips from its workers who delivered meals from online orders. The restaurant claimed it was merely withholding the tips as means to recoup fees charged by the delivery sites; one judge called hooey and the case moved up through the courts. The new settlement makes the language clear that restaurants are required to distribute tips in full to the workers who make deliveries.
Seamless—which merged with Grubhub last year—uses a fee structure with its restaurants based on the food, drink, tax and tip totals on orders; the site takes a percentage of that total then returns the remainder to the restaurant. That structure could—and was—used to skim employee tips to cover the cost of the fee. The Attorney General's investigation also discovered that Seamless did not have language in its contracts with restaurants that clearly stated a restaurant's legal obligation to remit all tips to its employees, a loophole that will be closed with this new settlement.
"Our settlement with GrubHub changes a billing formula that may have been used by restaurants to shortchange workers out of their hard-earned tips—tips that customers intended for them," Attorney General Schneiderman said in a statement. "In addition, this agreement will leave no doubt among the thousands of restaurants doing business through GrubHub about what their legal obligations are—not only with regard to tips, but also for all laws that protect the rights of workers. Today's agreement addresses a problem that may have affected thousands of delivery workers, and the industry will be better off for it."
Or just tip in cash!
