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Tag Archives: tips

Restaurant’s Fee Deduction Program Violates FLSA

Posted in Employment Contracts and Agreements, Wage & Hour

Employers whose workers earn most of their compensation through tips, such as restaurant employees, know that they walk a fine line to ensure compliance with the Fair Labor Standards Act (“FLSA”) and numerous other laws.  Last month the Fifth Circuit rejected a program instituted by a restaurant operator in Texas that deducted certain fees before… Continue Reading

Think You Are Leaving a Tip After a Nice Meal, Think Again; You May Be Leaving Someone’s Wages – IRS Ruling On Automatic Gratuity Begins January 2014

Posted in Wage & Hour

Effective Jan. 1, 2014, the Internal Revenue Service (IRS) will recognize automatic gratuities, a percentage automatically added to a restaurant bill, as a service charge, rather than a tip. The IRS ruling on automatic gratuities isn’t new. This was the result of a June 2012 tax ruling that was delayed to give restaurants and related… Continue Reading