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Tip Counting Michigan

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  • Tip Counting Michigan

    Is it legal for a manager to count your tips, even if your not in a tip pool?

  • #2
    If all we are talking about is counting and nothing else, sure, it is legal. The key is that under the tip rule exception to minimum wage, employers can take a tip credit but they have to ensure that the tips cover the tip credit. Federal MW is $7.25/hr, the portion that the employers must pay is $2.13/hr but under the FLSA law they are also potential subject to any short falls covered by the tip credit (max of $5.12/hr).

    Unrelated to those requirements employers are legally required under IRC to report all wages (including tips) to IRS and to hndle tax withholding/accruals based on an accurate withholding of tips.

    Both laws have employer penalties for failure to comply and both rules have employer penalties for failing to properly account for tips. IRS in particular is VERY clear that ignorance of the employee's correct tips is no excuse for the employer, that it is the employer's job to know these things. Smart employers at a minimum will make the employee file out the IRS form and sign it each week, but that by itself will not protect the employer (or the employee) if the IRS feels that under reporting is occuring.

    These are all federal rules which are applicable every where. MI may (or may not) have additional rules. Not my state.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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