NLA Achieves Crucial Guidance on Tips from DOL

December 10, 2012

To all NLA members:

By letter dated November 16, 2012, the United States Department of Labor (DOL) provided the NLA with important guidance concerning the common industry practice of adding a percentage charge labeled “tip” or “gratuity” to a customer’s invoice.  A copy of the DOL’s letter is enclosed, along with a helpful Q&A drafted by the NLA. 

As you know, our industry has been under increased scrutiny from plaintiffs’ lawyers and governmental agencies regarding a host of wage and hour issues.  One issue that has created considerable uncertainty and financial impact for operators concerns the treatment of monies received by virtue of a percentage gratuity added to customer invoices.  The attached letter from the DOL helps greatly by affording guidance as to the measures that operators in our industry can take to underscore that the gratuity percentage identified on an invoice is indeed at the customer’s discretion and thus fully consistent with the definition of a tip or gratuity. 

In sum, DOL’s letter will help NLA members structure their billing and compensation practices going forward in order to reduce the risks.  If you have any questions after reviewing the enclosed materials, please contact your labor and employment attorney or the NLA at #856-596-3344 (the NLA cannot provide legal advice but will assist with general questions and referrals). 

The NLA wishes to express its sincere thanks to all NLA members who supplied information and assistance as we worked with our lobbyists and attorneys to successfully advocate and achieve this important clarification from the DOL.  On behalf of the NLA, I am pleased to be able to relay this information, and I thank you for your continued support.


Diane Forgy
National Limousine Association