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Zeeks pizza chain to pay $400K over service charges

August 25, 2022 GMT

SEATTLE (AP) — The Seattle-based pizza chain Zeeks will pay delivery drivers about $409,000 after allegedly failing to disclose how much of its delivery charge was paid to drivers.

The settlement was announced Wednesday, The Seattle Times reported. In 2019, the company agreed to pay about $285,000 to 257 drivers over the same issue.

Service charges are common at Seattle restaurants with some going to employees in lieu of tips and others kept by the employer.

The charges are allowed, but restaurants and other companies are required to disclose on menus and receipts what percentage of the charge is paid directly to employees serving customers. If the company doesn’t make clear that it retains a portion, the charge must be paid to employees serving customers.

Without the disclosure, customers could assume the service charge goes to employees and tip less.

The Seattle Office of Labor Standards alleged that from 2019 through 2021, Zeeks failed to disclose how much of its delivery charge was paid to drivers. The pizza chain agreed to pay about $409,000 to 224 current and former drivers.

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Office of Labor Standards Director Steven Marchese said in a statement, failure to disclose where the service charge goes “is a widespread issue in Seattle that needs to be addressed and resolved.”

Zeeks founders Doug McLure and Tom Vial said in a statement they “believe we complied with the statute in good faith” and that drivers did not receive smaller tips “on average.”

“Any technical violations were temporary, immaterial and were caused by a former software vendor, not by Zeeks employees,” they said.

Started in 1993, Zeeks has two dozen locations across the state.