Our September 24, 2013 blog posting discussed the automatic tip charges that restaurants had to abide by effective January 1, 2014. Currently in the news are proposals to increase the minimum federal wage which would affect many in the hospitality industry. According to Yahoo Finance, a local Philadelphia restaurant chain, Chickie’s and Pete’s (C&P), ignored labor laws and will pay $8.5 million to its employees for failing to pay them the minimum wage as well as improperly keeping part of their employees’ tips. The U.S. Department of Labor (DOL) reported this as the largest wage-and-tip violation in its history. The restaurant chain separately announced that it would spend almost $1.7 million to settle private lawsuits with some of its employees. The DOL probe apparently took about a year which undoubtedly cost the company much in professional fees and lost time for the employees handling the audit.
Unfortunately, far too many taxpayers often “adopt” policies or procedures based on what their friends, neighbors, and business associates tell them [Read more…] about MINIMUM WAGE AND TIP INCOME VIOLATION