The Department of Labor & Industries (L&I) has released the final version of the tips, gratuities, and service charges policy. You can find it on the Workplace Rights/Employment Standards Administrative Policies webpage. This policy includes updates based on feedback received on two draft versions last fall.
I-1433 created new requirements in the Washington Minimum Wage Act (RCW 49.46.020(3)) for employers to pay tips, gratuities, and service charges to their employees. During the rulemaking process for I-1433, L&I committed to developing administrative policies like this one and providing opportunities for input. These policies are intended to help employers understand how to interpret and apply the law.
The final policy language defines tips, tip pools and service charges and outlines requirements for payment to workers. The policy also adds the requirement that facilities that add a mandatory tip or service charge disclose to their customers the amount of the charge that will be shared with the worker, if any. This information must be presented in a restaurant menu and/or on an invoice or receipt.
Examples of appropriate disclosure statements:
Restaurant menu
- A service charge of ___% / $___ will be added to your bill. ___% of this service charge is paid to the employee or employees who served you today.
OR
- A service charge of ___% / $___ will be added to your bill. 100% of this service charge is retained by [Business Name].
OR
- A mandatory gratuity of ___% / $___ will be added to your bill for parties of ___ or more. ___% of this service charge is paid to the employee or employees who served you today.
OR
- A mandatory gratuity of ___% / $___ will be added to your bill. 100% of this mandatory gratuity is retained by [Business Name].
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