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2) Eliminate that tip as part of wage 'loophole'. That is interesting. As I understand it now, the way tips are factored into wages, it benefits the employee m

2) Eliminate that tip as part of wage 'loophole'. That is interesting. As I understand it now, the way tips are factored into wages, it benefits the employee more so than the employer. Society loses because the employee is supposed to report tips so they are taxed, the employer loses because they still have to pay minimum wage, and the employee wins because they are paid minimum wage and get their tips tax free. Maybe I'm just being dense, but how would this elimination be beneficial?

dragonwriter 9y ago
> As I understand it now, the way tips are factored into wages, it benefits the employee more so than the employer. Society loses because the employee is supposed to report tips so they are taxed, the employer loses because they still have to pay minimum wage, and the employee wins because they are paid minimum wage and get their tips tax free. Employers of workers in customarily tipped jobs can and do use tips as a performance metric, so if the employer has to top up your tips to minimum wage, it probably also means you are also losing your job. This also motivates overreporting tips.
gozur88 9y ago
>...and the employee wins because they are paid minimum wage and get their tips tax free. Not tax free. Your employer reports 8% of your total receipts to the IRS as income. It's likely less than you make in tips, but you still pay some tax.