11th U.S. Circuit Court Of Appeals: Miami Restaurant Service Charges Are Not Tips

CBS Miami

March 22, 2022

Ruling against a group of restaurant workers, a federal appeals court Friday said service charges tacked onto diners’ bills at a Miami steakhouse are not tips.

A three-judge panel of the 11th U.S. Circuit Court of Appeals upheld a lower-court decision that backed Nusr-Et Steakhouse, which distributed money from the mandatory 18 percent service charges to employees to cover the restaurant’s minimum- and overtime-wage obligations, according to Friday’s ruling.

Restaurant workers who filed the lawsuit contended the service charges were tips and, as a result, could not be used to meet the obligations under the federal Fair Labor Standards Act.

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