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Putting a tip on a credit card can cost your waiter

Putting a tip on a credit card can

Putting a tip on a credit card can cost your waiter. Photo Credit: Xavier Mascarenas

DEAR CARRIE: I have a young friend who works as a waitress in a local restaurant. When a customer puts a tip on a credit card, the restaurant owner deducts the credit card fee from my friend's tip. Is this legal?

-- Tip Rip-Off?

DEAR TIP: It's a great question because it deals with a less well-known aspect of tipping. Most questions about tips focus on whether employers can legally keep any portion of them. Ordinarily, they can't, said Irv Miljoner, who heads the U.S. Labor Department's Long Island office.

"However, there's an exception for credit card fees, which the employer may deduct from the tipped worker," Miljoner said.

Here's more information from the Labor Department's website:

"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 on all sales charged to its credit service, the employer may pay the tipped employee 97 percent of the tips."

But the law limits what employers can deduct. "Of course, the deduction should be limited to the amount of the credit card fee," Miljoner said. "Any deduction above that would be illegal."

And the website notes other important caveats.

"This charge on the tip may not reduce the employee's wage below the required minimum wage. The amount due the employee must be paid no later than the regular payday and may not be held while the employer is awaiting reimbursement from the credit card company."

DEAR CARRIE: I am a full-time exempt employee who works from home for a large company. Since my employer requires me to print documents in order to sign them, to scan receipts for expense reporting and fax reports to headquarters, shouldn't the company provide me with such things as a printer, paper and toner?

-- Whose Tab?

DEAR WHOSE: As an exempt employee you're out of luck. Even though the supplies are essential for your work at home, your employer doesn't by law have to supply them or reimburse you for their costs.

It seems unfair, but it's legal.

If you were an hourly worker, the story would be different. If those expenses in any week reduced your hourly pay below the state minimum wage, which is $8.75 an hour, the company would have to reimburse you for those costs.

But as an exempt worker you are out of luck. As far as money goes, to maintain your exemption from minimum wage and overtime, the company has to pay you a minimum salary of $656.25 a week in New York, with certain exceptions. So it can legally refuse to reimburse you for expenses.

Still, you should press your employer to allow you to perform your garden-variety tasks electronically. For example, with Adobe Acrobat software you can sign documents electronically. What's more, you could scan in your signature and paste it in documents as needed.

You'll have to purchase the software, but it will save you time and money in the long run. And you could write off a portion of that cost and others on your taxes.

Seems like you're dealing with a company that needs to be pulled kicking and screaming into the digital era. Faxing is fading -- and is even considered archaic in many circles. And requiring it, when electronic alternatives are available, smacks of a Luddite mindset.


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