what is ny state law regarding wait staff tips how does it work when reporting them?

Question

employer is questioning the tips that we are reporting as not being high enough when we reported what we earned...business is sloww tips are low even though we put in 40 hours.

Answer 1

The Business owner needs to report the information to the IRS as follows: http://www.irs.gov/businesses/small/industries/article/0,,id=98401,00.html

Employer Requirements: Allocation of Tips

As an employer, you must ensure that the total tip income reported to you during any pay period is, at a minimum, equal to 8% of your total receipts for that period.

In calculating 8% of total receipts, you do not include nonallocable receipts. Nonallocable receipts are defined as receipts for carry out sales and receipts with a service charge added of 10% or more.

When the total reported to you is less than 8%, you must allocate the difference between the actual tip income reported and 8% of gross receipts. There are three methods for allocating tip income:

Gross Receipt Method
Hours Worked Method
Good Faith Agreement

Employers can request a lower rate (but not lower than 2%) for tip allocation purposes by submitting an application to the IRS. Detailed instructions for computing allocation of tips, reporting allocated tips to employees, and for requesting a lower rate can be found in the Instructions for Form 8027. (PDF)

Note: The amount shown as allocated tip income is for information purposes only. You are not required to withhold Income or Social Security taxes on the allocated tip income. The amount of tip income allocated to each employee is shown in box 8 of their Form W-2.

Tip Reporting Requirements for Employers

Employers who operate large food or beverage establishments must file Form 8027 (PDF) to report employee tip income. A large food or beverage establishment is defined as business where all of the following apply:

Food or beverage is provided for consumption on the premises
Tipping is a customary practice

More than 10 employees, who work more than 80 hours, were normally employed on a typical business day during the preceding calendar year.

Answer 2

The standard is 8% of sales -- if you have had all credit card sales, you must report what was charged as a tip.

on edit: This is because there are some instances that people do not give an appropriate tip, and if you sell $500, but only made $55 for the night, you aren't stuck reporting $75 (which would be 15% of 500.) Besides that, many places make waitstaff tip bartenders (2-3%) and Busboys (1-2%) of sales.

The IRS is coming down on employers, and of course, on waitstaff, as well. Keep track of everything, especially if business is slow.

Answer 3

That is so stupid. Your employer is questioning your tips, because, IF you do not make enough in tips, per hour you work, They are responsible to pay you, more out of their pocket in order to pay you at least minimum wage.

So here it is. I am guessing they pay you 2-3 dollars per hour. Then any tips you make first go toward to be TDW - tips deemed wages.
You work 40 hours, they have to make sure your check is At Least 5.25(min wage) times 40 = $210.

For example if you work 40 hours.
you are paid 2.15 and hour =That equals $86 dollars, If you make zero tips the whole week, the employer is required to pay the remainding $124 out of pocket, rather than you getting it basically for free from tips, which customers pay for, not the employer. Because they are not allowed to pay you hourly, any less than minimum wage, tips or no tips.

You boss is basically asking you if you are cheeting by not reporting all of your tips. If you really are not making enough tips, tell them.

Here is why people in the past have decided to hide their tips they make.
1.You get taxed on the tips you make/or that you report you make.
2. Example, If you only work on weekends per say. You work 16 hours, and make $1,000. You most likely will owe your employer money to pay in to your taxes for you. Because you made $1000 plus hourly $83.00. If your taxes are over 83 dollars, you need to give your boss money to pay them in for you. Say your taxes are 300 for example. He would ask your for $217 dollars.

This poses a problem with most people. Bosses do not want to take the money from their hard working severs and bar tenders and the servers and bartenders do not want to pay out any of their hard earned tips, because that is thought as a gift to you.

Of course the government considers it earnings, so you are required to report all of it, and pay taxes on all of it. So watch out.

So reporting just the right amount of tips is usually the way people go. You don't want to skrew your boss if you are making more tips. You should report them. The rest you may be able to figure out on your own. Which is that if you want to report Just Enough tips Take min wage 5.25 - how much they pay your and hour, expl. 2.13. =3.12. Make sure you report at least the hours you work , 40 hours times, 3.12. =124.80 and maybe add a few dollars to make it look realistic. This by the way is illegal. You are supposed to report all of your tips. Even if you are not making enough.

That is the employers problem, if he does not bring in enough business.

Another thing is. He is only supposed to pay you server wages, for hours you can make tips on. So if you come in at 10 and the bar doesn't open until 11:30, you are supposed to get full minimum wages, during the hour and a half you are there, because they are not open for you to wait on anyone and make tips. So, your employer sounds like. he just doesn't want to pay you for your time there, at just minimum wage.

You can report abuses to the NY Dept. of Labor, if your check does not at least show the minimum wage times the amount of hours your worked.

This is gross, not after taxes, meaning you wouldn't get exactly the 40 times 5.25. you will get what is left after they take out the taxes.

Never lie and over report your tips, if that is what your employer is pressuring you to do, it will literally cost you money on your tax return at the end of the year and you will be screwed, rather than the employer taking responsibility.

Anyway, hope that helped answer your question.

I am both a business owner and I have worked as an employee. What is fair is fair, and what is the law is the law. Be strong. Good Luck.

Answer 4

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