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Restaurant Owners Can Legally Ban Employee Tips and Pocket the Change

As long as they communicate the policy clearly.


Restaurants in Massachusetts can not only ban employees from accepting tips, but they can also pocket that money themselves. According to the Boston Globe, in 2011, a group of Dunkin' Donuts employees sued their franchise owner Constatine Scrivanos, who instituted a no tipping policy at 44 of his 66 stores. Money left behind by customers that was meant to be a tip would either end up in the register or was required to be dropped into an "abandoned change" cup, both of which the employees' lawyers argued violated Massachusetts' Wage Act.

Restaurant owners can even pocket the money left behind.

However, on Friday, the state's Supreme Court ruled that no-tipping policies are fine. As long as the policy is "clearly communicated," the restaurant owners can even pocket the money left behind. The owners' legal team argues that there are "thank you for not tipping" signs in the store, so therefore the policy is obvious.

Fast food workers already have it hard enough without someone taking away tips: Studies show that 40 percent live in poverty, while another report reveals that nearly 52 percent are dependent upon public assistance just to get by. Furthermore, these Dunkin' Donuts locations aren't the first restaurants to enforce a no-tipping policy. Other restaurants that instituted similar policies have simultaneously increased their employees' wages. Some restaurants also donate the tips to charity instead of pocketing the cash.