SF Marriott must pay $9M in tips to banquet staff, says judge.

San Francisco Marriott Marquis Hotel Ordered to Pay Banquet Workers $9 Million in Withheld Fees

The San Francisco Marriott Marquis Hotel has been ordered by a judge to pay hundreds of banquet workers five years of withheld fees, totaling around $9 million. The hotel had illegally kept “service charges” paid by customers who believed they were gratuity fees for the servers.

According to reports, the hotel hosted approximately 1,000 banquets annually, adding a 23% to 24% service charge to the customer’s bill per contractual agreements. The judge ruled that a “reasonable customer would understand and intend the service charges to be a gratuity for service staff.”

Marriott Violated California Law

The San Francisco Superior Court Judge Ethan Schulman stated that Marriott violated California law that mandates service charges belong to the employees if the customers assumed the tips would go to the server. The group said the hotel distributed only 70-72% of the service charges paid to the banquet staff.

Banquet staff earned between $11 to $13.50 per hour, including tips, which amounted to about $70 million over the five years. The judge said Marriott management kept $9 million. Workers who testified believed the charges referred to gratuity, adding that many customers did not leave a tip because they thought the customary practice was already included.

Marriott Changes Its Practices

In 2017, the law group noted that Marriott changed its practices by splitting the service charge into two transactions — a “staff charge” and a “house charge.” Marriott has not commented on the ruling.

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“Customers pay service charges — on top of hefty food and beverage bills — because they think they are tips for the waitstaff,” Attorney Shannon Liss-Riordan, who represented the workers, told The San Francisco Chronicle.