Familiar business practices are returning across the United States, but after more than a year of amended rules, new laws and changing norms, some hospitality business owners in Washington may be unclear on what has changed and what is a permanent fixture of the business climate. Our HERO Manual is a great resource for members and includes everything from sample applications to today’s topic, service charges in Washington.
Service charges are defined by the federal government as compulsory charges for a service that, unlike tips, do not vary in their amounts at the discretion of the customer. Additional elements of Washington state law on service charges include:
- The business must disclose the percent of the service charge going to an employee.
- Per RCW 49.46.160, employers who impose a service charge “must disclose, in an itemized receipt and on the menu the percent of the service charge.
- Employers cannot use service charges to satisfy minimum wage requirements.
- This was prohibited by Initiative 1433 which passed in 2016.
The rules surrounding service charge disclosures are relevant right now as stories surface of class-action lawsuits impacting hospitality businesses around the country. Knowing your state requirements and how they go beyond the federal law is important knowledge for any operator.
The rules surrounding service charges in Washington are a small portion of the requirements with which business owners need to be familiar. The HERO Manual is a great resource, but if you need help finding something, or if there is a topic you’d like to learn more about, you can get in touch with the Washington Hospitality Association through social media, by sending an email to news@wahospitality.org or by contacting your territory manager.