Dominican Republic: Mandatory 10% Gratuity does not apply to Take-out or Delivery Orders
In a recent ruling, the Supreme Court of Justice held that a business cannot charge a 10% tip if the consumption (of food and beverages) did not occur on its premises.
Article 228 of the Labour Code states that a mandatory gratuity of 10% on bills of food and beverages consumed in hotels, restaurants, cafes, bars, and, in general, in commercial establishments that dispense food or drinks.
Interpreting that article, the Supreme Court of Justice, changing its criteria, considered that the mandatory gratuity provided in Article 228 of the Labour Code does not apply to bills for “take-out or delivery”.
According to decision number 033-2021-SSEN-00765, dated 31 August 2021, the mandatory 10% gratuity will only apply to the bills of customers who consume meals or beverages in the stores or businesses that sell them. Therefore, it does not matter whether the company transported such food or drinks (delivered by its employee) or if the customer paid a third-party to transport the food or beverages, produced by other businesses.
Key Action Points for Human Resources and In-house Counsel
Human Resources and in-house counsel of hotels, restaurants, cafes and bars must take the necessary steps to address the impact of this judgment, knowing that, in practice, employees’ income in this sector will decrease.