Legal Question in Tax Law in California

waiter-claiming tips

I work for the Grand Lux Cafe,

owned by The Cheesecake Factory

Corporation. They make us

claim10% of our sales as tipped

income. If we fall short of that we

run the risk of being suspended. My

question is, does a restaurant have

to right make you claim a certain

amount of your tips? Isn't this an

issue between you and the IRS?


Asked on 4/30/07, 4:59 pm

1 Answer from Attorneys
Mark Muntean Mark Muntean, Attorney at Law

Re: waiter-claiming tips

Sorry, but the employer is doing right in this case. Not only can the employer do this, the IRS will punish him if he doesn't. You are an employee and the employer has an obligation to withhold on your income and pay such withheld taxes over to the IRS. So this is not between just you and the IRS. The IRS has a new program for tip reporting by employers. See IR-2006-118, July 28, 2006. My sense is that even with programs like this, not all tips are reported.

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Answered on 4/30/07, 5:06 pm


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