A Quick Tip on Tips!
Brian R. Israel
Restaurants with tipped employees should beware of the amended Department of Labor tip credit regulation that hit the industry earlier this year. If rising food costs aren’t painful enough, now those with tipped employees must be sure that their payroll policies comply with the new rules or face significant added costs. Rather than simply letting your tipped employees know that their tip income is to be used as a credit against the minimum wage, the employer (Restaurant) now must provide much more specific information to each tipped employee. The sharing of information allows the Restaurant the ability to reduce the federal minimum wage of $7.25 per hour to potentially as low as $2.13 per hour….and don’t overlook any specific state requirements. If you need some good news related to this topic, there may be a lawsuit pending with the intent to challenge these rules.
In the meantime, please be sure you are aware and in compliance as these rules have been in place for a few months already. A CPA, payroll provider or labor attorney could undoubtedly help you to understand the details.