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Being overtaxed?!?

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  • Being overtaxed?!?

    I am a server in a combination restaurant/gift shop. We are taxed 8% of our sales. However, since we got a new bookkeeper they have been recently higher even with slower business. It appears by our own adding up of each of our tickets that they are including sales from the gift shop also. For example, I had customers order $104.00 worth of food. Before paying their bill, they brought up approximately $180.00 worth of souvenirs which was added and rang up with the food under my server number. I questioned the manager and he shrugged me off and said payroll was not his department. I thought we were only taxed on food and beverages.
    I was out with the flu last week and worked only 3 days for a total of 12 hours and my tips shown were 178.00!! Another server worked 18 hours and was shown tips at close to 340.00! We wish we had made that much. We are talking a $7.95 lunch buffet here, not steak, lobster and champagne. Is this not illegal?

  • #2
    First of all, they cannot report any more tips than you actually receive. Which makes the whole 8% thing, whether it includes gift shop sales or not, a moot point.

    I know what they're trying to do, but they are going about it the wrong way.

    What state do you work in? This has an effect on whatever recourse you may have. Have you talked to the payroll person yourself to see what their (ill-advised) reasoning for this is?
    Last edited by Pattymd; 02-03-2008, 05:49 AM.
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


    • #3
      I'm in Louisiana. We never get to see the bookkeeper because she comes before the restaurant is open. We get to leave her "notes" in her box in the office. The owner will not give me her number, either. The main reason this is so frustrating to me is because I am also being garnished for a student loan. She takes out 25% even though I left her a message that I am to be garnished 15%. When I called the student loan place, they said she needed to read the paperwork they sent which said it was to be 15%, but that they could garnish up to 25% if I had additional garnishments, which I don't. It seems they are trying to up my sales to get more money out of me, but that's a whole other story. They take 25% no matter what my sales are.


      • #4
        I hate to by cynical, but I wonder if they are turning over the full amount garnished or only the 15% required to be garnished.
        Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.


        • #5
          Oh man, ScottB, that would be even worse.

          You have a number of issues here. Louisiana has very few wage and hour laws of their own and all of these are absent in LA law.

          But here's where this gets tricky. Unless the inflated tips recorded on your pay are causing the employer to NOT have to make up a difference in minimum wage, I'm not sure there is an FLSA violation. Let me explain.

          Let's say you worked 40 hours at a cash wage of $2.13 per hour (allowable under federal law; LA has no minimum wage law). And you reported to the employer the $100 in tips you actually made. 40 * $5.85 = $234.00 and that is the minimum gross pay you must receive. $85.20 of that comes from the cash wage; $100 from tips; that leaves the employer on the "hook" for the remaining $48.80 that he must pay in cash wages. Now, let's also say that you are claiming S-1 on your W-4 (I'll ignore state taxes and any pre-tax deductions for simplicity's sake). That is net pay (after deducting tips back out) of $104.53. Now add in the garnishment as it SHOULD be at 15% of disposable (in this case, same as net pay before deductions for tips received) for a deduction of $30.68; grand total net pay of $73.90.

          Now let's assume the same as above, but the employer reports $150 by using gift shop sales and/or by taking 8% of your direct restaurant sales (even though that is more than you made and more than you reported to the employer). $85.20 + $150 = $235.20. More than $234.00, so the employer can be said to be paying in accordance with the minimum wage law for tipped employees. And, of course, he isn't in actuality. And let's also use the incorrect garnishment percentage. Net pay would be $55.52; now deduct 25% of disposable for the garnishment of $51.38. That leaves you with a whopping grand total in your paycheck of, um, $1.14.

          There MAY be something you can do with the IRS................DAW?

          Regarding the incorrect garnishment percentage, if you can't get this straightened out pronto, you have a likely civil case as well. In the meantime, although the gross pay on which they are withholding IS too high and the percentage IS incorrect, at least you're paying it off sooner; I'm not minimizing the situation, just saying that there is at least some upside to this one.

          Is there anyone higher up you can go to?

          And is there another establishment you can apply to? This "bookkeeper" has no clue and shouldn't even get her OWN paycheck, let alone being responsible for others'.
          Last edited by Pattymd; 02-04-2008, 04:58 AM.
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


          • #6
            Originally posted by Pattymd View Post
            There MAY be something you can do with the IRS................DAW?
            Not a clue. On the IRS side of things, if one does not agree with the W2 issued by the employer, one takes issue with it. Basically the 1040 is filed with what the employee claims the numbers should be and the employee write a formal letter to IRS to include with the 1040. If IRS believes the employee, and it is to IRS's financial advantage to believe the employer, then the employee will eventually get back any overwitheld taxes.

            The employee could certain call up IRS and make a general compliant, but there is no guarentee that IRS will contact the employer quickly (or at all). IRS looks out for IRS's interests, not the interests of employees.

            I agree with the other answers. Go over the bookkeeper's head and talk to management. All other solutions cost time and money. I have no problem with filing wage claims or talking to IRS or lawyers or 60 Minutes, but at some point the only cure to a bad employer is to change employers.
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)


            • #7
              Thank you so much for all your quick responses! Higher management is the owners, who are there everyday and will not allow me to talk to her in person or give me her number.
              This place is going downhill everyday as more people are quitting and none are coming to apply because word is on the street of how this place is run; excessive tips, missing hours on checks, lost time cards, etc. Many of us don't see this place in business much longer. We lost 2 people in the kitchen last Friday evening because they said their pay was short and nothing was done about it.
              I have decided to look for another job ASAP and not have to deal with these people anymore.
              I would much rather work out a deal with the Student Loan Center after I leave, then I might have a few dollars left at the end of the week. I know they'll call me after they stop getting money from my paycheck when I'm gone, LOL!


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