COLORADO SPRINGS, Colorado — Multiple tipped-wage earners at the Broadmoor are putting up a legal challenge against the resort claiming their employer's practice of charging a service fee in place of tips and gratuities violates state labor law.
The 24 percent service fee is added to every customer's bill and the money is split among the employees. However, the resort keeps a portion of it.
Hour and Wage Attorney Adam Harrison of the Sawaya Law Firm said by keeping part of that service fee, the Broadmoor is breaking the law.
"Under Colorado law, a tip is a tip is a tip, whatever you call it," Harrison said.
He suspects the resort's share of those service fees ranged anywhere from 15 to 40 percent.
"The employees often don't know what they're getting paid, they don't know what tips are coming in and what the pool really should have looked like," said Harrison
The employees initially filed a class action lawsuit against the resort. However, Harrison explained that as a condition of their employment, they waived the right to class action and agreed to settle any controversies through arbitration.
"All of our clients want the policies to stop. All of our clients want the Broadmoor to stop taking the service charge."
As News 5 has previously reported, mishandling employees tips adds up, often costing hard working employees thousands of dollars in pay. The Colorado Department of Labor and Employment processed dozens of wage theft complaints filed against Colorado Springs and Pueblo businesses last year.
If the arbitration case is successful, Harrison said his clients will be owed back-pay at the non-tipped minimum wage.
"That's the difference between the $2.40 An hour base wage that they were paid, and the Colorado minimum wage which is now $12 an hour," he explained. "They're entitled to that for every hour that they worked."
Penalties can also be charged if those ordered wages aren't paid in a timely manner. The Broadmoor's attorneys are disputing the claims. However, as an arbitration case, much of what goes on is kept private.
News 5 made multiple calls to a resort spokesperson for comment, but those calls weren't returned.