March 17, 2008

Bucks from Starbucks

Here's a real case in the San Diego courts right now for you to ponder. It involves Starbucks and the way they split the proceeds of the tip jar.

The money in the tip jar has been split between that shift's employees, including the shift supervisors. This resulted in a class action lawsuit that includes 120,000 baristas (the people who prepare your coffee or tea) and began a few years ago. Jumping to the bottom line, inclusion of supervisors and managers violates California labor laws.

Starbucks responded that their supervisors did many of the same tasks as the baristas and were, therefore, eligible for tips. The judge disagreed and said the supervisors directed the actions of the baristas and that made them ineligible. This ruling made Starbucks liable for damages. It's likely we'll hear about an appeal at some point.

So, how does this affect you? If your employees aren't in a tipping environment, it doesn't. However, if your employees may or do get tips you need to make sure all your employees are classified properly and you know the correct way to handle the tips.

California has been coming down hard on anything related to wages. Make sure you know you're doing it right, not just assuming it's correct because you haven't been sued … yet.

 

Filed under Payroll & Compensation by C.J. Westrick

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