Sounds shady. Get and or keep records for a few months and see if consistent then see a labor lawyer.

You seem to otherwise like the boss so after consulting with the lawyer, approach the boss with the issue and see if they want to rectify it before you need to play the lawyer card but have that in your back pocket in case he instantly fires you.

I'd imagine your local Labor Board would be your best help when it comes to questions regarding tipping.

That can't be legal. Tips are money voluntarily given from customers to employees. Employers don't get to steal them if THEY don't like the employee.

Why on earth is anyone tipping at a Jersey Mike's?

For the extra meat, of course.

Update:

Thank you especially NoSoup4U and others. I did exactly what NoSoup4U suggested and I have a phone meeting scheduled for tomorrow, with a local employment lawyer to discuss the situation. She agreed that something fishy may be going on.

Apparently management can only deduct the CC processing fee (3%) from Credit Card tips for employees. So i might have a case. Ill continue to update and discuss my best plays. 2 + 2 continues to rock!

Thanks!

NoSoup4U, im glad i caught you before you sailed off.

Something smells fishy, and it's not just the tuna salad.

I agree that talking to an employment lawyer and proceed from there is the right play. Have you considered talking to the GMs who operate the other stores your guy owns?

Just a friendly reminder, I certainly don’t want to accuse your employees of any wrongdoing, if you decide to escalate the situation ‘out of house’ cash tips and credit card tips have to match. I recently worked with a bar where according to the books, credit card customers tipped nearly twice as much as cash customers. That’s going to cause a lot of trouble if somebody else ever decides to take a closer look.

I wonder if they even keep a record of the cash tips.

Unless their tips total less than $20/month, employees are required to report them to their employer. Not doing that makes the IRS unhappy. As a business owner, you don’t want to deal with an unhappy IRS.

How common is it for the IRA to go after tipped employees for not declaring their cash tips at the same level as their cc tips?

Industry standard (or so I was told) when I served was to declare 10% unless CC receipts left a paper trail directly contradicting the number.

We all declared 10% and tip-shared out 3% additionally.

The IRA has been pretty quiet for quite a few years now, so probably not too common at this time.

Yeah, but the New IRA killed a reporter in April. No word whether she under-reported her tips.

As with most other IRS stuff, probably not very common unless you are stupid about it. Under-declaring shouldn’t be a problem if you keep the number reasonable. Not keeping a record at all is stupid though.

Unfortunately, lots of people in the industry aren’t very smart. Just recently I had to explain to somebody in a painfully detailed way that if they want to sell 10 Jack & coke off the books every day, once a month they have to use their own money to buy 6 or 7 1.75l bottles of Jack Daniels at Costco and add them to their inventory. His response “with my own money? why?”.

But since OP runs a chain restaurant, nothing like that should even be possible. At least in theory. But If an owner thinks it’s a good idea to pay out the same $ amount in credit card tip share every month..

It sounded to me like the tips go into a big jar on the counter, and then they are divided up after each shift and given to the employees who just worked. So they employer should know how much everyone got. Is the owner supposed to take additional withholding tax on these amounts? Also I hope OP is comparing pre-tax amounts for the credit card tips paid to employees.

Reminds me of:

My Dad who is a retired corporate attorney said getting fired might be the best thing to happen...lol. I might get a big settlement if he fired me for being a whistle blower. I'll have pocket aces if and when I accuse him.

Interestingly, I talked to a lawyer today which I will expand upon but she said. "with the new labor laws the Trump Administration has tried to enact, Employers would be entitled to take any amount of tips from employees as they see relevant! Those laws are still being worked out. But there was a period of time during Trumps presidency where employers could legally take employee tips as they see fit. Today the law is somewhat more clear that they can only take out cc processing fees. However its still be worked out and there is not a lot of case law on the subject." Thanks Trump. God I hate Trump.

I've considered talking to the other GMs. My concern is that they turn around and call my owner. So i'm delaying this.


So I just got off the phone with an employment lawyer. She reiterated most of what you guys said...that something fishy appears to be going on.

She mentioned the Trump labor laws as stated above... which is just gross. Thanks Trump!

She was also concerned at the fact that I receive a portion of cc tips and as "management or the General Manager" if I pursued the case I might lose those tips (i get $500 a month i CC tips.). I told her employees tip me all the time. Im often the only one in the store.

She said that because I perform the duties of tipped employees I might be entitled to the tip share. She needs to do more research.

I told her I don't really care how this hurts or benefits me. Its 40k job. I want social justice and greedy capitalists to be held accountable for cheating, so things like this don't happen, and people get paid what they deserve.

We talked about some other details and ideas (including investigating if this is happening at other stores.) I wont bore you with the details, but she said she'll do some research and get back to me in a couple of days. But she was definitely intrigued.

So the plot thickens

Video was awesome. So funny and true.

If i confront or accuse my boss i will have pocket Aces in my back pocket. Apparently if he did fire me it would be better for me.

Sure! The Trump Administration seems to disagree.

This may be something to look into. But employees are getting maybe 3 dollars on average per shift in cash tips after they divide it. So yes over 20 but less than 60 at best per month.

All employees are part time besides me. To avoid the costs of full
time employees. Just like Walmart.

Don't latch on to this, and probably ask another attorney's opinion since your first one immediately went political on you.

You need a different lawyer. The administration (any administration) does not make laws. It can put in place regulations as allowed by a law, but those regulations cannot go against the law.

Also, from the (Trump administration) Department of Labor web site -

Retention of Tips: A tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit. The FLSA prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. For example, even where a tipped employee receives at least $7.25 per hour in wages directly from the employer, the employee may not be required to turn over his or her tips to the employer.

Finally, state laws may supersede federal laws.

TY. Very informative post. But, are you saying that because I live in Texas the FLSA may not apply if The State of Texas has different laws? If so why do we have a Federal Government?