Credit Card Transaciton Fees Deducted from Tips

My question involves employment and labor law for the state of: North Carolina.

I currently work in a restaurant that charges ALL servers and bartenders 2% of their total credit card tips. This is the first and only restaurant job I have held in twelve years that has done so. I am just curious as to whether or not the laws have recently changed and have allowed employers to charge their employees a percentage of their tips to pay for the transaction fee(s). I have talked to the owners and the assure me that it is "standard practice" but I cannot help but feel that it is an uncommon and possibly shady practice.

Cheers.

You can advise your employer you are declining their offer to process your tips, because you do not want to reimburse the fee they pay to provide you with this benefit. Expect to lose all charge tips hence forth as I suspect they will terminate you if you interfere with customer choice regarding tip method.

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Quoting Amber Merideth

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My question involves employment and labor law for the state of: North Carolina.

I currently work in a restaurant that charges ALL servers and bartenders 2% of their total credit card tips. This is the first and only restaurant job I have held in twelve years that has done so. I am just curious as to whether or not the laws have recently changed and have allowed employers to charge their employees a percentage of their tips to pay for the transaction fee(s). I have talked to the owners and the assure me that it is "standard practice" but I cannot help but feel that it is an uncommon and possibly shady practice.

Cheers.

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From a purely business point of its logical, and not at all "shady". It costs the employer somewhere in the neighborhood of 2% to accept the credit card, therefore he is passing that cost on to you, since he is not receiving that money. I doubt that there is a law against it.

as long as they are simply passing the processing fee along there is nothing illegal, the employer does not have to subsidize your tips by paying your transaction fees.

around 2% sounds like that is what is being done that is what credit card processing costs.

You should contact an attorney in your area that gives free consultations. There is no reason for the employees to pay for the transaction fees. (imo) (servers make less than 3.00 per hour-more like 2.00, and should not be responsible to pay the transaction fees.)

Ummmm, where did this come from? Most servers in restaurants average over $10 p/hr. The employer is simply passing on the expense of them getting some of their tips. The employer could of course refuse to process charge tips entirely.

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Quoting mmmagique

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You should contact an attorney in your area that gives free consultations. There is no reason for the employees to pay for the transaction fees. (imo) (servers make less than 3.00 per hour-more like 2.00, and should not be responsible to pay the transaction fees.)

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Quoting mmmagique

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You should contact an attorney in your area that gives free consultations. There is no reason for the employees to pay for the transaction fees. (imo) (servers make less than 3.00 per hour-more like 2.00, and should not be responsible to pay the transaction fees.)

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Huh? So the employers should subsidize the employee's tips by covering the credit card processing fees out of their own pockets? The OP did not state that they had to cover the entire processing fee, only the portion that involved their tip. There is nothing illegal or immoral in that.

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Quoting llworking

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Huh? So the employers should subsidize the employee's tips by covering the credit card processing fees out of their own pockets? The OP did not state that they had to cover the entire processing fee, only the portion that involved their tip. There is nothing illegal or immoral in that.

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She only said transaction fee. She did not specify that she only has to pay for that part of the fee. I've also still never heard of any restaurant employer doing this. I suspect they are paying the entire thing. The amount of time and energy it would take to divide up the payment from the tip amount, and figure out what the employee owes for every transaction would nullify any money the employer saved, imo.

Servers are paid about $2.00 per hour for their time and trouble. Most restaurants use their servers to do a ton of prep and closing work for that $2.00 per hour. I really don't agree that the servers should also pay for the credit card billing fee that they did not apply for. And who's going to write off that fee on their taxes at the end of the year? The restaurant. I'm betting the restaurant won't like it one bit when the employees start telling their customers that they're going to have to pay in cash. Because that's what I'd do. (ok, actually, I'd just get another job, because I don't like confrontation, but if I were someone a bit more vocal, I'd do it.) *g*

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Quoting mmmagique

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She only said transaction fee. She did not specify that she only has to pay for that part of the fee. I've also still never heard of any restaurant employer doing this. I suspect they are paying the entire thing. The amount of time and energy it would take to divide up the payment from the tip amount, and figure out what the employee owes for every transaction would nullify any money the employer saved, imo.

Servers are paid about $2.00 per hour for their time and trouble. Most restaurants use their servers to do a ton of prep and closing work for that $2.00 per hour. I really don't agree that the servers should also pay for the credit card billing fee that they did not apply for. And who's going to write off that fee on their taxes at the end of the year? The restaurant. I'm betting the restaurant won't like it one bit when the employees start telling their customers that they're going to have to pay in cash. Because that's what I'd do. (ok, actually, I'd just get another job, because I don't like confrontation, but if I were someone a bit more vocal, I'd do it.) *g*

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Its not complicated at all to figure it out. If the credit card processing fee is 2% (which is normal, its a percentage, not a flat amount) then you just add up the server's credit card tips, times 2%. They will only be paying for the portion that applies to the tips.

Yes, server's make about 1/2 of minimum wage on the clock, but that is because they make tips. If their tips plus wages don't add up to minimum wage times the number of hours worked, then the employer has to make up the difference.

I have been a server, I have employed servers, my daughter has been a server...etc. I am well aware of how it works and there is nothing illegal or immoral in what the employer is doing.

If a server makes 200.00 in tips for the night a 2% processing fee is a whopping 2.00. While that's not much, if an employer has 10 servers and has to pay that monthly it adds up to a fairly significant amount for the employer.

There are 7 servers on the staff roster and we all make 2.25 and hour. We all have to pay 2% of our credit card tips received (to the house). Unfortunately, we cannot tell our customers to pay in cash because it is widely advertised that we take ALL credit cards. We are also required to tip out our bartenders at the end of the night as well (this I know is practical and I am okay with). It is just frustrating because I am one that has the highest # of sales including alcohol and I'm ending up having to tip out close to 20 a day which in some cases has been close to 50% of my total tips for the day. *shrug* I will always be in the market for another job, but it is really hard to find a job despite my 12 years of experience due to my appearance.