Policy: Technology

NY AG reaches agreement with GrubHub over tips

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News,Business,Food and Drink,New York,Law,Technology,Internet

ALBANY, N.Y. (AP) — Attorney General Eric Schneiderman has reached an agreement with the online food delivery company GrubHub Inc. to ensure that the tips it collects from customers will be given to the workers they were intended for.

Schneiderman said Wednesday the investigation into GrubHub, which merged with Seamless last year, found that the company charged a fee to restaurants based on the total food, drink, tax and tip. Once the fee was deducted, the remainder was returned to the restaurant.

Schneiderman said that under state labor law, employers are prohibited from keeping portions of an employee's tip and the fee created an incentive for restaurants to not pay workers their full tips.

GrubHub says it is working closely with Schneiderman to ensure their policies comply with the labor laws.

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