Can a business take the tips of its employees?

[Cat]

How legal is it for a business to keep the tips given to employees? Tips are taxable earned wages, according to the IRS. Only respond if you actually know something about this. No speculation please. I'll provide more details if they're needed. Thanks.

 

[LordMaul]

I would speculate that no, they cannot. But I'm not sure.

 

[UglyCasanova]

At the grocery store I used to work at we were not supposed to accept tips, but if they gave it to me anyways I was supposed to go give it to the office.

 

[eraser]

An employee such as a waiter/waitress that is required to claim a percentage of their tips as imcome, because they are making below minimum wage can not legally have their tips taken away by the business.

if you are an employee that works in a business (ex: sub shop) that display a container of some kind for people to offer tips to the employees for the service they provide. It is not illegal for the business to keep the tips, it may be unethical and a bad business pratice on part of the management, but it is not illegal.


Eraser.

 

[Zebo]

Yes. In strip clubs the girls typically give 50% to the house in order to wrok there.

 

[Cat]

"if you are an employee that works in a business (ex: sub shop) that display a container of some kind for people to offer tips to the employees for the service they provide. It is not illegal for the business to keep the tips, it may be unethical and a bad business pratice on part of the management, but it is not illegal."\

This business requires the employees to report tips to the IRS. This business has a computerized service to do this. Memos were circulated regarding it.
This business requires the tips to be kept in jars, and divvied up at the end of the week.

More thoughts?

 

[eraser]

what was the wage of the employees at this business?

Eraser

By the way I live in Mass. The laws that apply to employee wages & tips are to be posted in a central location for all employees to view. The laws in your state, if different may vary.

 

[Cat]

Employees make well above minimum wage. Said employees are going to start just accepting tips from customers individually soon, in protest.

 

[wedi42]

Originally posted by: Carbonyl
Yes. In strip clubs the girls typically give 50% to the house in order to wrok there.

those are not tips. the money they get is the fee to cover a service.
and the girls are typically contractors, not employees

 

[idNut]

I thought you meant recommendations. I'd say hell yeah to this. Applebee's needs to have two dishwashers working.

 

[amnesiac]

Originally posted by: johngute

Originally posted by: Carbonyl
Yes. In strip clubs the girls typically give 50% to the house in order to wrok there.

those are not tips. the money they get is the fee to cover a service.
and the girls are typically contractors, not employees

Yep, strip clubs don't follow the "normal" rules of payment at all. You can't use those as examples.

AFAIK if you work in a service industry where your tips are taxable income, then no, the employer can't take your tips away. What kidn of shady place are you at that they're doing such a thing?

 

[Cat]

It's a long story, and I'm trying to learn about the legal aspects before I say anymore. Basically, a distrct and store manager are covering their asses.

 

[Bleep]

Several resturants in my town make the waiters work their tips against there wages.
How this works is they pay the waiters a hour wage and then the tips must be turned into the owner until their wages equal the tips then the waiter gets to keep all their tips.

In Las Vegas at the casinos no dealer at any table gets to keep their tips, they are all put into a pot and then a process called mucking takes place where the tips are counted up and split evenly among all the dealers according to the amount of hours that they worked. The reason for this is that the dealers that work like from 3AM to 11AM get few if any tips and the evening shift really gets a lot, if they did not split the tips no one would work the slow shift.

Bleep

 

[jaybert]

and everyone would want to work the high rollers table too 😛

Originally posted by: Bleep
Several resturants in my town make the waiters work their tips against there wages.
How this works is they pay the waiters a hour wage and then the tips must be turned into the owner until their wages equal the tips then the waiter gets to keep all their tips.

In Las Vegas at the casinos no dealer at any table gets to keep their tips, they are all put into a pot and then a process called mucking takes place where the tips are counted up and split evenly among all the dealers according to the amount of hours that they worked. The reason for this is that the dealers that work like from 3AM to 11AM get few if any tips and the evening shift really gets a lot, if they did not split the tips no one would work the slow shift.

Bleep

 

[Cat]

"In Las Vegas at the casinos no dealer at any table gets to keep their tips, they are all put into a pot and then a process called mucking takes place where the tips are counted up and split evenly among all the dealers according to the amount of hours that they worked. The reason for this is that the dealers that work like from 3AM to 11AM get few if any tips and the evening shift really gets a lot, if they did not split the tips no one would work the slow shift."

This is what is done at this business. This is also what lets the business take the tips when they please.

 

[MadRat]

The service is provided by the business, so technically no waiter/waitress earned the tip. The patron may indeed wish to reward the waiter/waitress directly but Uncle Sam considers the employer as responsible for collecting and claiming the income generated by tips. The money generated by tips left by patrons are considered the property of the employer, hence the customer never is directly rewarding the employee. Its not the employee that is penalized when the taxes aren't paid, its the employer. So, yes, the employer can keep all tips. Its the sole property of the employer and if the employer pays out the tips to the employee then the money paid to the employee falls under wages and tips.

 

[Cat]

"The patron may indeed wish to reward the waiter/waitress directly but Uncle Sam considers the employer as responsible for collecting and claiming the income generated by tips. "

I'd like to see some paperwork regarding this. However, at this business, the employees are in charge of reporting tips to the government.

 

[SherEPunjab]

Originally posted by: MadRat
The service is provided by the business, so technically no waiter/waitress earned the tip. The patron may indeed wish to reward the waiter/waitress directly but Uncle Sam considers the employer as responsible for collecting and claiming the income generated by tips. The money generated by tips left by patrons are considered the property of the employer, hence the customer never is directly rewarding the employee. Its not the employee that is penalized when the taxes aren't paid, its the employer. So, yes, the employer can keep all tips. Its the sole property of the employer and if the employer pays out the tips to the employee then the money paid to the employee falls under wages and tips.

interesting... how does affect a situtaion when employees are purposely paid below minimum age, like $2.25 because they will receive tips to compensate? This is a very common practice btw, nothing unsusal at all. I think in this situation, it is probably illegal for employers to take tips.

 

[Bleep]

I have one other interesting tidbit about tipping.

Bell persons at major hotels and casinos buy there job from the bell captain, the bell captain has paid the owner of the hotel for the right to provide the bell service to the customers, they in turn sell the right to each and every bell person usually at a job auction. so the bell person has purchased his job, they make no money until they have made enough in tips to pay for their job.
I know a bellman at a major hotel in New York and he bought his job for $42,500.00, last year he made after payng for the job over 100,000.00.

Bleep
Madrat!!

You do not know what the heck you are talking about.. here is a little quote from the federal law on tipping

Retention of Tips: The law forbids any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. A tip is the sole property of the tipped employee. Where an employer does not strictly observe the tip credit provisions of the Act, no tip credit may be claimed and the employees are entitled to receive the full cash minimum wage, in addition to retaining tips they may\should have received

Here is a link
Law on tips.

This will also answer the origonal posters question.

 

[Cat]

"Requirements
If an employer elects to use the tip credit provision the employer must:"

If this business 'elects to use the tip credit provision.' I'm assuming it does, but I'd like to find out.

Thanks for your research, it's helped quite a bit.

EDIT:

Madrat, it seems like you're just talking out of your rear end sometimes. I asked people to avoid speculating. I know it's a public forum, but you seem to enjoy voicing your opinion more than most 🙂.

 

[MadRat]

Hey, someone has to play the role. 😉

An old girlfriend and I talked about this several years back and she insisted that it worked the way I just said. I've learned a long time ago when the woman says its so then they're probably right although you never want to cave in and just admit it! I figure she was the expert since she was the one NOT collecting the tips even though she was collecting them for her employer. 😛

Next time I'll see her, like another seven years is our next class reunion, I'll have to say what is said in the link.

 

[Bleep]

Madrat:

DIT sure has went south, I was in there last week and they had almost nothing. Been in there lately?

Bleep