Hospitality company agrees to settlements over withheld gratuities

Nick Rees Mar. 22, 2010, 1:31pm

Martha Coakley (D)

BOSTON (Legal Newsline) - A settlement has been reached between a Westport, Mass., hospitality company and its owner and Massachusetts Attorney General Martha Coakley over alleged violations of the state's wage and hour laws.

LaFrance Hospitality Corporation and Richard LaFrance, its owner, were alleged to have failed to distribute tip wages to service employees. LaFrance Hospitality and Richard LaFrance, the owners of White's of Westport and Rachel's Lakeside, both located in Westport, agreed to pay restitution in the amount of $300,000 and a $15,000 penalty to the state for violations.

An investigation into LaFrance by the attorney general's Fair Labor Division began in April following a complaint filed by a LaFrance employee. The complaint alleged that an 18 percent gratuity was charged to customers holding functions at the two Westport facilities but that the gratuity was not passed on to the service staff at the function.

Employers are required by the Massachusetts service charge and tip statute to distribute any and all service charges and tips paid by patrons to wait staff employees. Employers are prohibited by the statue from demanding, requesting or accepting any payment or deduction from a tip or service charge.

LaFrance, at the request of the attorney general's office, conducted an audit of his payroll and business records for 2007 and 2008. The audit revealed that the 18 percent fee that it had collected had not been distributed to wait staff employees. LaFrance and his company agreed to pay $300,000 in restitution to more than 50 current and former employees as a result.

All employees will be paid restitution by the end of 2010 as part of the settlement agreement. LaFrance Hospitality has also agreed to change its written policy about the 18 percent house fee to bring it into compliance with the tip statute.

LaFrance and his company fully cooperated with the attorney general's office throughout the course of the investigation

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