Governor Romney Signs Bill Amending Tip Statute

On Thursday, June 10, 2004, Governor Romney signed legislation (H. 4431) amending M.G.L. c. 149 §152A, commonly known as the Tip Statute. The amendment addresses many of the legal issues raised in recent class action litigation between servers and hotels and restaurants in Massachusetts. The new version of the Tip Statute specifically allows tip pooling, defines a service charge as synonymous with a tip or gratuity, and clarifies which employees are entitled to receive service charges and tips from tip pools. The Tip Statute now covers all employees receiving tips, such as restaurant workers, taxicab drivers, hairdressers, baggage handlers, and valets, and imposes a penalty of up to $25,000 or up to two years in jail for violations.