Is it legal for an employer to take money out of an employee’s credit card tips if the money is not used for credit card processing fees and/or tip pools?

My wife works for a salon and her boss just informed her that he would be taking a large percent of her credit card tips to pay for credit card

processing fees and the business’ match of Social Security and Medicare tax. My wife obviously already pays for Medicare and Social Security through her

paychecks so why should she have to pay for her share and the employer’s share through her credit card tips?

Asked on August 2, 2018 under Employment Labor Law, Wisconsin


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

An employer is solely reponsible for paying their portion of social security and medicare costs. It is illegal for them to use employee tips to cover such expenses. At this point, your wife can file a wage complaint with your state's department of labor or consult directly with a local employment law attorney.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

No, it is not legal to use tips to pay for the employer's portion of social security and medicare: those are for the employer to pay. If the employer is taking your wife's money to pay for its portion, it is violating the law; your wife could contact the state or federal department of labor to file a complaint.

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