Service charge

Judge rules in favor of Salt Bae restaurant in service charge lawsuit

In the latest reminder of the importance of tips for restaurant staff, a judge has ruled in favor of social media sensation Salt Bae’s Nurs-Et Steakhouse in Miami, after two dozen employees filed a lawsuit against their employer, arguing that a mandatory service fee should not have been used to cover their normal salary.

Credit: Instagram/ Salt Bae

Nusret Gökçe, better known worldwide as Salt Bae Seasoning, has built an enviable restaurant empire over the past few years that shows no signs of slowing down despite the many column inches spent extorting its sky-high prices.

But headlines are also made by staff members. Earlier this month we reported news that a sommelier at Nusr-Et outpost in London claimed he was fired for eating an avocado after 5.30pm in the staff canteen. Guillermo Perez called Nusr-Et, which has outposts in several cities around the world, “McDonald’s for the rich”, and made several statements about the restaurant’s practices, including that customers were served “frozen fries and Heinz ketchup.

And now two dozen Nusr-Et employees have been convicted in a lawsuit arguing that an 18% service charge should not have been used to cover their salaries.

The United States Court of Appeals for the 11th Circuit upheld the decision of a Miami federal judge who ruled in favor of Nurs-Et Steakhouse in Miami. The decision stated in part, “If the mandatory service charge is for tips, federal law would generally prohibit restaurants from using the charge to pay minimum wage and overtime to employees. But if the charges are not tips, establishments can apply them to employee salaries.

The court held that “the essential element of a tip is its voluntariness.

“The LSF [Fair Labor Standards Act] does not define “tip” or “service charge”. But as stated in Department of Labor (“DOL”) regulations, the essential characteristic of a “tip” is that “[w]whether a tip should be given, and how much, are matters determined solely by the customer.

Citing an example of DOL regulation of what do not constitutes a tip, the court said: “A mandatory service charge, such as 15% of the bill amount, imposed on a customer by the establishment of an employer, is not a tip.

The court said it could not distinguish between this example and Nusr-Et’s service charges.