Tipped employees not making enough to cover deductions from paycheck
I would love to connect with someone that is familiar with this scenario:
Tipped employees in the restaurant industry are paid out at the end of each shift for any tips they made (this includes both cash & credit card tips). Credit card tips are automatically claimed through the POS system. However, cash tips are input on the timecard by each employee individually and often times we believe this may be under reported.
Due to the minimum wage in Ohio for a server of $5.25/hour and dependent on the amount of hours they are working, often times there is not enough left in their paycheck to take out any remaining voluntary deductions (for meals, 401(k), health insurance, garnishments, etc.).
Have any other employers come across this scenario and if so how did you correct this? It's been mentioned to have the servers work more production shifts so that their hourly rate is higher. If tips are moved from paying out daily to paying out through payroll only (biweekly), there is a fear that many of the servers will quit.
Any insight you could offer would be helpful.
Thanks!
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I am in a different state and in MA provided that their tips bring them up to at least minimum wage per hour is our law. If the total hourly rate for the employee including tips does not equal our minimum wage at the end of the shift, the employer must make up the difference. I understand that working on tips can be difficult at times depending on supply and demand and there are times that are slower than others. Might be best to have them work in a different department a few hours a week to be able to have a more steady income.
