Is it legal for my employer to claim that I received a tip on a cash purchase when I didn’t receive a tip?

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Is it legal for my employer to claim that I received a tip on a cash purchase when I didn’t receive a tip?

I’m a delivery driver and on cash purchases by customers, my employer

automatically deducts a chase tip from my paycheck on that purchase whether I received a tip or not. I don’t think that’s fair because I normally don’t receive a tip and that decreases my hourly wage because the employer claims I made that money which is calculated in determining my hourly wage.

Asked on July 11, 2018 under Employment Labor Law, Illinois

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

Legally, you can only be paid less than minimum wage if you are in a tipped job AND actually receive tips, AND those tips must be enough to take you at least up to minimum wage. (This is the "tip credit" that lets employers pay tipped employees less than minimum in certain circumstances.) So if he is paying you less than minimum on assumed tips when you are not in fact receiving sufficient tips to bring your effective hourly wage back up over minimum, that is not legal. If you are being paid less than minimum without actually receiving tips to make up for the shortfall, contact the state department of labor.
But if you are being paid at least minimum, however, this is legal: so long as the employee receives at least minimum wages, the employer may pay him or her whatever he or she wants, based on any reason, including assumed or hypothetical tips. So if you're getting at least minimum wage, the employer may pay you less than you would otherwise make because he thinks you are getting tips.


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