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Compliance Issues for Restaurants with Credit Card Fees, Tips to Waitstaff and Tip Pooling

Trying to follow both state and federal wage and hour laws isn’t that hard. But it isn’t that easy either. Let’s say you’re a restaurant with a waitstaff.  Like most restaurants nowadays, your customers pay by credit card and you, the employer, have to pay the credit card company a percentage on each sale. You know there are rules regarding deductions of the wages to employees. But what about tips? Can you take out the percentage of fees being charged by the credit card company on the tips? According to the U.S. Department of Labor: Yes. In its fact sheet, the USDOL makes it plain that such actions by an employer do not violate federal law, so long as they are limited to the fees on the tips themselves. Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, the employer may pay the employee the tip, less that percentage. For example, where a credit card company charges an employer 3 percent o...