What to do if a private business owner/employer is taking a cut out of the employee’s tips and claiming that it is not tax related?

UPDATED: Aug 22, 2012

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Aug 22, 2012Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

What to do if a private business owner/employer is taking a cut out of the employee’s tips and claiming that it is not tax related?

The tips and wages come in the form of personal checks, is this legal? The owner of the service business takes 20% out of the employee’s tips for “IRS purposes” which he claims have nothing to do with filing taxes. No W2 was ever filled out for any of the employees. The owner claims a form will be filled out at the end of the tax year stating all of the income the employee has made with no taxes having been deducted yet. Then what is that 20% being taken out for? Is this the correct process for private businesses?

Asked on August 22, 2012 under Employment Labor Law, Florida


Catherine Blackburn / Blackburn Law Firm

Answered 10 years ago | Contributor

It is difficult to answer this question without knowing the type of business, the way you are paid, and how your employer collected the tips.  However, this does not sound appropriate.  I would suggest that you contact the United Stated Department of Labor, Wage and Hour Division for help.  They can be very effective.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption