Employers could safeguard tips

It can be to a server’s advantage to have a restaurant owner safeguard gratuities, Rep. Sarah Anderson (R-Plymouth) told the House Commerce and Regulatory Reform Committee April 7. For example, a restaurant could keep tips collected after an employee leaves when their shift is over, or help administer a tip-sharing plan.

The committee approved a bill she sponsors, HF809, which would remove a restriction against employer participation in gratuity sharing agreements. It goes to the House floor. There is no Senate companion.

The bill would allow employers to record the tips received for accounting or tax reporting purposes and, at the employees’ request, safeguard and disburse tips according to a sharing agreement. Employees could not be coerced by employers to share gratuities.

Rep. Joe Atkins (DFL-Inver Grove Heights) said he is aware that tip sharing is already common practice in restaurants and that the bill would help employers to stay within legal requirements for tax purposes. He sought assurance from Anderson that if the bill reaches the House floor, she would not support any possible efforts to amend it with a proposal such as a “tip credit.”

A tip credit could allow employers, such as restaurants, to pay less than minimum wage to employees who also receive tips, under the assumption that the employees make up for lower hourly pay through tip income.

“My request of you is that if it comes up are you going to say, that’s not what this bill is about? The employers obviously want it so they’re safe and sound relative to the law. Can you give me some peace of mind relative to the tip credit issue and other controversial kinds of things?” Atkins said.

“It’s not my intent to do anything other than what we have before us today,” Anderson said.