M/S Quality Inn Southern Star vs The Regional Director, Employees State ...

The Supreme Court upheld the decision of the Karnataka High Court affirming the ESI Court's ruling that service charges collected by a hotel from customers and distributed among employees constitute 'wages' under Section 2(22) of the Employees' State Insurance Act, 1948. The Court clarified that these charges are not voluntary tips but mandatory charges included in the bill, thus falling within the definition of wages. The appeal was dismissed, reinforcing the ESI Court's determination that the service charges are subject to contributions under the Act.