Andria Ryan's July 10, 2014 article "How to avoid
lawsuits from tipped employees" was featured on Hotel News
now.
In January, the IRS implemented new guidelines for tips and
service charges. Employers must understand the guidelines to
effectively manage employees and avoid lawsuits.
- Employers must withhold payroll taxes from the tip amount reported.
- Employers must, on a weekly basis, ensure a tipped employee earns at least minimum wage.
- Some states forbid the use of tip credit; others impose significant record keeping and notice requirements.
Hospitality employers are easy targets for wage and hour
lawsuits and government payroll audits. The laws are complex, so
hospitality employers must be diligent about compliance and record
keeping.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
