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charge tips - can restaurant take admin fee from the tips?

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  • charge tips - can restaurant take admin fee from the tips?

    we know a restaurant that wants to charge their servers a 2% fee on their charge tips due to the fee the restaurant has to pay for the processing of credit cards.
    Can they do this? My gut says no.

  • #2

    Credit Cards: Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, then the employer may pay the employee the tip, less that percentage. This charge on the tip may not reduce the employee's wage below the required minimum wage. The amount due the employee must be paid no later than the regular pay day and may not be held while the employer is awaiting reimbursement from the credit card company.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)


    • #3
      I know the OP didn't indicate which state this inquiry might be about but California (again) has a different take on the DOL link DAW posted. In California the the Labor Code states in:

      Labor Code ยง 351.
      No employer or agent shall collect, take, or receive any gratuity or a part thereof, that is paid, given
      to or left for an employee by a patron, or deduct any amount from wages due an employee on
      account of a gratuity, or require an employee to credit the amount, or any part thereof, of a
      gratuity against and as a part of the wages due the employee from the employer. Every gratuity
      is hereby declared to be the sole property of the employee or employees to whom it was paid,
      given, or left for. An employer that permits patrons to pay gratuities by credit card shall pay the
      employees the full amount of the gratuity that the patron indicated on the credit card slip, without
      any deductions for any credit card payment processing fees or costs that may be charged to the
      employer by the credit card company. Payment of gratuities made by patrons using credit cards
      shall be made to the employees not later than the next regular payday following the date the patron
      authorized the credit card payment.


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