All servers, bartenders and other food industry workers who receive tips have to report their earnings to the IRS regularly. Sometimes tips are reported at the end of every shift and sometimes servers and food service providers count up their total earnings and send in their reports every week. Despite the fact that servers have to pay taxes on tips that they have earned or expect to earn, sometimes their employers decide to meddle in their business.
Any food service provider who doesn’t earn at least minimum wage must be compensated by their employer, which is why some of their bosses feel the need to make false reports. Contacting an attorney at the Cohen Law Group is recommended if you have not been compensated fairly or you owe more money in taxes due to the unethical actions of an employer.
Keep Records Of Your Earnings
Whether you get paid in cash tips or have a time-stamped printout for your earnings given to you at the end of each shift, you’ll need to keep these records safe. From the time that you believe that your employer has been misrepresenting the amount of money you have been earning to the government, you have to make a paper trail that will prove that you are the party who is telling the truth.
Report Your Employer’s Actions To The IRS
Talking to your employer about what they have been doing is likely going to get you unjustly fired. However, you can report your employer anonymously to the IRS and they can begin to quietly investigate the matter. As you continue to report your tip earnings honestly, the IRS can pick up on an obvious pattern of fraud if your employer is acting unscrupulously. In the meantime, you should also start looking for a new place to work if you believe that you have not and continue not to have your tips reported correctly.
Consult with an Attorney Who Specializes In Employment Law
Remember that the IRS estimates that all tipped servers make approximately 10% of their total gross sales. This is why the majority of servers and bartenders never get paychecks as they’re voided out to satisfy their tax liabilities. Restaurant owners can sometimes get very used to not having to pay their servers wages, and if your boss has been tampering with your tip amounts reported to the IRS you need the assistance of an expert law firm. Speaking with an attorney can help you learn if you need to sue your employer for back-wages or if you should demand to have the amount of income earned and reported to the IRS be changed by your boss.
Sometimes servers have a bad night where they barely make any money at all. While their employers need to pay the difference between what they actually made and the federal wage minimum, some will take measures to avoid doing the right thing. All employees deserve to earn a living whether they are salaried, earn a paycheck, or collect tips. Find out how you can get the money you deserve while working as a tipped employee in the food service industry.