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Court Rules Worcester Club Violated Massachusetts Tip Act

October 10, 2022

On September 30, 2022 the United States District Court, D. Massachusetts held in favor of exotic dancers in the matter of Saad v. JOLO, Inc. by applying minimum wage law and the Massachusetts Tips Act. 


An employer may pay direct wages at the Service Rate (a rate substantially lower than minimum wage) provided that: (i) the employer provides the employees with required statutory notice; (ii) the employee actually receives tips in an amount which, when added to the Service Rate, equals or exceeds the full Massachusetts Minimum Wage; and (iii) all tips received by the employee are retained by the employee receiving the tips.


JOLO, Inc. specifically violated the Massachusetts Tip Act due to unlawful tip sharing as: (i) a portion of the tips received by exotic dancers were given to DJs and security guards (which included a manager) and (ii) a portion of the tips exotic dancers received was paid directly to their employer. 

The Court cited: Matamoros v. Starbucks Corp. which held that shift supervisors are not “wait staff” and therefore are ineligible to share in tips pools with baristas; and Cormier v. Landry's Seafood House-N. Carolina, Inc. which held that seater hosts are neither wait staff employees nor service employees under the Tips Act, and are also ineligible to participate in the tip pool with wait staff.



Additionally, since JOLO, Inc. retained a portion or “split” of the tips the exotic dancers received from customers for private/non-private dances it failed to comply with the Service Rate requirements which necessarily constituted a violation of the minimum wage law because they were ineligible for the tip credit.


If you have questions about this topic, or any other general employment issues, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.

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