AboutArthur Naman Expertise General accounting and bookkeeping questions. How to do monthly bookkeeping, how to prepare financial reports. How to reconcile accounts.
I cannot answer questions pertaining to pension or retirement planning.
This is not a forum to have homework answered. Please do your own homework.
Experience 30 years' experience doing tax and accounting work
Education/Credentials MPA from Univ. of Texas at Austin, MBA Golden Gate Univ, San Francisco CA
Question I know of an employer who "keeps" 3% of the employee credit card tips (I suppose to cover the employer cost of accepting credit cards). Is this legal? I'm sure the customers believe that what they tip the wait person is what the wait person will receive, not that the customer is paying another 3% of a dollar amount to the restaurant. This employer also keeps 25% of these credit card tips -due to the wait person and includes it in the paycheck.(In my opinion the restaurant is "borrowing" this money until it's paid out)Credit card batches happen daily.
Answer You will need to talk to an employment attorney in that state; I am in Texas. This is not really an account question, more of a legal question.
I expect that the withholding of 3% is not legal. I expect that "tips" funds can only be used for tips, nothing else.
I am aware of a common practice of withholding a percentage of each wait person's tips to be used to "tip" a common bar tender, expediter, bus boy, etc.
