Friday, August 7, 2009
Court Approves Award to Skycaps for Tip Law Violations
A federal jury awarded $325,000 to nine skycaps who contended that their employer, American Airlines, unlawfully deprived them of tips by instituting a $2 per bag service charge. The Massachusetts Supreme Judicial Court interpreted a state law prohibiting employers from keeping tips.SeeDiFiore v. American Airlines Inc., Mass., No. SJC-10313, 8/4/09.
The nine skycaps employed at Boston's LoganAirport, argued that the policy to include a $2.00 service charge led to a dramatic drop in tips because passengers mistakenly thought that skycaps received the service charge. The skycaps argued that the policy violated state tip law and resulted in compensation below the minimum wage.
The law (Mass Gen. L. c. 149 sec. 152A) defines a service charge as either a fee imposed in lieu of, or in addition, to a tip, or as a fee that a customer reasonably would assume would go to the employee. The Supreme Judicial Court concluded that the "legislature intended to ensure that service employees receive all the proceeds from service charges, and any interpretation of the definition of 'service charge' must reflect that intent."
Importantly, the court also found that the state tip law applies to contractors (such as skycaps) as well as Employees.
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