Lawsuit Over Tip Compensation Settled

Plaintiffs in a lawsuit against Hyatt Corp. who sued over its practices relating to tip wages agreed to settle their claims for $1.5 million. The lawsuit was filed by participants in a 401(k) plan sponsored by the hotelier. The lawsuit claimed that Hyatt’s practice of having employees’ credit-card tipped earnings excluded from deferral to the plan by requiring daily cash-outs of tipped earnings contradicted the terms of the plan document and was a violation of ERISA. The law firm representing the plaintiffs has filed at least one other similar lawsuit in recent years which is still pending and has received a favorable ruling from the courts already.