On January 14, 2021, Massachusetts enacted a law amending the Massachusetts Tips Act in a way that expands the scope of the type of employee that is allowed to receive tips and participate in tip pools. This is undoubtedly a welcome change to employers, and will likely lead to litigation over the meaning of the new language.

What is the Massachusetts Tips Act?

The Massachusetts Tips Act is a law that regulates the collection and distribution of tips and service charges by restricting employers’ ability to retain tips and service charges and also by limiting how they distribute tips and service charges. You can read the actual law itself (M.G.L. ch. 149 s 152A), here.

How Has the Massachusetts Tips Act Changed in 2021 regarding the definition of ‘wait staff employee’?

The Tips Act provides that employers may only allow “wait staff employees,” “service employees,'“ and “service bartenders” to take tips, take service charges, or participate in tip pools. The Act contains specific definitions for each of those three categories of employees. The new law expands the definition “wait staff employee.” New language below bold and italicized:

"Wait staff employee", a person, including a waiter, waitress, bus person, person in a quick service restaurant who prepares or serves food or beverages as part of a team of counter staff or any other counter employee who: (i) serves beverages or prepared food directly to patrons or who clears patrons' tables; (ii) works in a restaurant, banquet facility or other place where prepared food or beverages are served; and (iii) has no managerial responsibility during a day in which the person serves beverages or prepared food or clears patrons' tables.

This change gives employers more flexibility regarding the distribution of tips, service charges, and the operation of tip pools.