Your Rights on Tips and Wages
For many years it has been standard practice to tip service workers for a job well done. Waitresses, bellboys and cab drivers, in fact, all depend on gratuities to enhance their overall income. In the past, so have many massage therapists. But as spas have come into favor, tipping has come into question. The reasons are multifold: Spas employ educated, licensed professionals. Would you tip other licensed professionals, such as your accountant" Other reasons include client convenience and the sentiment that excellent customer service should be expected at a spa and therefore not rewarded through a tip. For these reasons some spas have eliminated tipping altogether. Others include a gratuity in the total bill with the understanding that the technicians responsible for a particular client’s care will each receive their share of the tip.

In some spas, whether massage therapists are employees or independent contractors may determine how they receive tips.

"We tend to act as a restaurant would, and add a 15-percent gratuity to parties of 10 or larger," says Karen Taylor, office manager and massage therapist at Blue River Canyon Day Spa & Store in Brentwood, Tennessee. "Otherwise, clients are free to tip as they see fit. Usually they leave the tip at the front desk when paying their bill and the employees eventually see the tip money in their checks once taxes have been taken out."

Independent contractors - all of Blue River Canyon’s massage therapists - receive their tips at end of the day and the tax burden falls on them to sort out.

At Avon Centre Salon & Spa, in New York City, tipping came and went and has come back again. "We did away with tipping about a year ago and offered our employees a raise in their pay to make up for the loss of wages that they would normally receive through tips. The change didn’t sit well with the employees and left the customers confused," says Yasmin Ismael, the spa’s special-events coordinator.

The spa has reverted to accepting tips on behalf of the staff. "We keep envelopes at the front desk for cash tips and each employee gets credit-card tips in cash at the end of the day," says Ismael.

Other spas add "gratuity fees" onto individual customer bills. The therapist, and client, believes that the person providing the service will receive that money.

"We add a total gratuity of 18 percent onto each service," says Christie Ford, spa director at The Homestead in Hot Springs, Virginia. "From the tip monies collected per employee there is a 3-percent administrative fee, and 15 percent goes directly to the therapist. We have never had any problems with employees not accepting the policy and guests love that they don’t have to worry about tipping each individual."

When it comes to tipping, state laws are on the therapist’s side. "A tip is a monetary amount given to the employee by the patron and is theirs to keep. If the tip is placed on a credit card the tip must be paid back in full no later than the next regular payday," says Richard Habura, office director of the Colorado Department of Labor, Wage and Hour Division in Denver.

"While standard taxes may be taken out of the tip monies returned in a paycheck, credit-card processing fees and administrative fees may not be deducted," Habura adds. "Tips are not to be collected and divided, pooled, re-directed or in any way given to any recipient other than the individual that the patron intended the tip be given to."

However, when an establishment adds on an extra charge to the bill intended for gratuity, legally, the money belongs to the spa. "If the business applies a fee to a service, even if they refer to it as a gratuity, the money is no longer considered a tip," says Habura. "This money, although collected in theory to replace an individual or cash tip, is now the property of the business. As such the business does not have to give the employee any of it."

This is also true for businesses that apply a 15-20 percent gratuity service to groups. If the employer decides to give some portion of this money to the employee it is considered a part of the employee’s wages, according to the Federal Wage Standards Act.

If you believe that you have been treated unfairly in regard to tipping or wages, you have legal recourse. "The proper procedure for filing a claim against an employer for tip-related complaints is to contact your local Department of Labor and Wage Standards office. If they determine that you have a claim, your employer may be fined," says Dave Pogrel, staff attorney for the Unemployment and Wage Claims Project, a nonprofit organization based in San Francisco.

Pogrel recommends keeping detailed records of your hours, wages and known tips. "This type of document will serve as a basis of fact when presented in court or during a labor dispute if examined by a local governmental office or if a civil complaint is filed," he says.

Employees also have the law on their side when it comes to job security. "The employer is prohibited by law to in any way penalize the employee bringing the complaint by federal law," says Pogrel. "If an employer is in any way threatening or harassing an employee because of a wage or tip dispute, they could face an additional fine."

While the first step toward ensuring a positive work experience is to investigate company policies when hired, you should feel comfortable discussing tip and wage practices at any point during your employment. Finally, if the company’s policies are legal but are not acceptable or don’t feel comfortable, you may want to find a better professional fit.