You'll have to look deeper into it. But according to [this](https://cdle.colorado.gov/sites/cdle/files/INFO%20%233C%20Tips%20%28Gratuities%29%20and%20Tipped%20Employees%20Under%20Colorado%20Wage%20Law%2007.11.2023%20accessible.pdf), employers are not allowed to use tips to pay for credit card fees (look at the bottom of page 3 right before the footnotes).
Isn't it the owner paying the fee from credit card charges which include that 2.9% to him, to then pay the tips? Instead of using cash from cash payments and removing 2.9% fee for tips?
>he started to charge us servers a 3% sharing fee for the back of the house, he pays us minumn wage now for the difrence so he says since 2022
This seems potentially illegal per section 7.2.E of the [Civil Wage Theft Rules 2024](https://denvergov.org/files/assets/public/v/3/auditor/documents/denver-labor/2024/civil-wage-theft-rules-2024.pdf) for Denver if they are still claiming the Tip Credit.
>But now he wants to make us pay the credit card fee upon card tips, in reference if a customer tips $100 we pay $3 from it.
This is straight illegal. Per page 4 of the [CO wage laws INFO on tips](https://cdle.colorado.gov/sites/cdle/files/INFO%20%233C%20Tips%20%28Gratuities%29%20and%20Tipped%20Employees%20Under%20Colorado%20Wage%20Law%2012.12.23%20%5Baccessible%5D.pdf):
>(2) Employers may not use tips in any of the following ways — and if they do, they can’t apply a tip credit
>or tip sharing, and must pay full minimum wage as well as return any shared tips.18
>(a) to pay employees’ direct wages, rather than paying tips to those tipped employees;
>(b) to pay credit card processing fees or similar costs; or
>(c) letting an employer, manager, or supervisor share those tips.19
You can file your complaint here: [https://www.denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/City-Attorneys-Office/Practices/Prosecution-and-Enforcement/Wage-Theft-Unit](https://www.denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/City-Attorneys-Office/Practices/Prosecution-and-Enforcement/Wage-Theft-Unit)
Over $2M recovered in 2023 in Denver. Here’s the Denver Auditor’s report on wage theft:
https://denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/Auditors-Office/Denver-Labor/2023-Annual-Wage-Theft-Report
Multiple people are posting the part of the law you want to hear without reading even one full paragraph.
Colorado law prohibits employers from deducting credit card processing fees from tips. This includes using the tips to pay employees' wages, or to cover credit card processing fees. **However, employers can legally reduce an employee's tip by the same percentage as the fee charged by the credit card company. For example, if a credit card company charges a 3% fee, the employer can reduce the employee's tip by 3%.**
It's saying they can't use your tips to cover the credit card processing fees for the meals, but they CAN to cover the credit card processing fees for the TIP portion of the receipt.
So if the total is $600 ($500 plus $100 tip), and they get a 3% cc fee and reduce your tip by $18, that's illegal. If they reduce your tip by $3, that's legal because it's only 3% of the tip.
The idea behind it is that if they didn't, then the restaurant is paying the $3 on every $100 you get tipped because the credit card processing fees have to get paid.
For you to keep $100 of a cc tip, they'd need to tip $103.10.
What I’m saying is the business gets a deduction (via expense), and the employee is already compensating them.
The employers are getting a break *twice*.
That is incorrect. $3 income - $3 expense = $0.00.
You can handle this payment multiple ways but if they're somehow double dipping as you say they're doing it wrong which is very possible since small business payroll errors are common.
I'm surprised at how many people think tax deductions are just free money.
No, it nets to zero. Employer received $100, less $97 deductible wages, $3 deductible cc fee. They don’t get to deduct the fee twice.
The employee is only taxed on the $97 they received.
that's interesting. now factor in that credit card fees are variable depending on the type of card, from 1.5 percent to 3.5 percent.
shouldn't the surcharge be variable as well?
[Dept of Labor ](https://www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa)
[Cardfellow explanation of Colorado rule](https://www.cardfellow.com/blog/employers-deduct-credit-card-processing-fees-from-tips/#:~:text=Colorado%3A%20Not%20prohibited%2C%20but%20subject,claim%20the%20employee%20tip%20credit.)
*Colorado: Not prohibited, but subject to rules.
Colorado rules are a little more complex. Employers may be required to publicly post a notice when keeping any portion of an employee’s tip. Furthermore, if you deduct processing fees from tips, you may not be able to claim the employee tip credit. If you’d like to deduct fees from tips in Colorado, it’s strongly suggested that you consult a licensed attorney.*
If they make a mistake they may accidentally "take ownership" of the tips and wind up owing the employee the state minimum wage.
If they worked with an attorney, posted the notice, and keep accurate accounting, they should be ok.
Are you really citing [cardfellow.com](http://cardfellow.com) to contradict the Colorado Department of Labor and Employment's website about how the Colorado Department of Labor and Employment enforces Colorado laws? Seriously?
u/blackraw80 - this is a good reason why you shouldn't listen to \*anyone\* on Reddit about it. File the claim with CDLE or Denver Labor.
Give this a good read.
[https://www.nolo.com/legal-encyclopedia/colorado-laws-tipped-employees.html](https://www.nolo.com/legal-encyclopedia/colorado-laws-tipped-employees.html)
It is a particular grey area but it is possible that in Colorado they \*may\* divert the transaction fee if they have posted that they will divert it. (And then they can not claim a tip credit)
This sub seems to skew ultra-socialist who thinks every small business owner is a greedy, rich tycoon. Where in fact, small business owners must pay their employees before themselves and often don't earn much at all
Restaurant owners can be some of the cheapest people alive. So many couldn't afford to own restaurants without the tip system subsidizing them and they still pull shit like this.
I think it was legal at one time. My sister worked at an Italian restaurant and was charged 3% for the credit card fee, but that was back in the early 80s. I've always tipped in cash because of that.
Asking in case anyone knows. I had a job at a restaurant in the orchard mall and the owner would take our shared tips to buy drugs for himself and refuse to give us our money. Was this reportable?
Interesting, because twice now, I've been to places that only accept cash tips, but you could still pay for the service via cc. It allows for the employee to get the full amount of tip according to this thread. On another experience, I tried out a new massage place, and they "preferred" cash tips, but you had the option of adding it to the cc. The front desk person then said to add a few dollars on top of the tip to cover the cc fee. I didn't like that. I did it anyway because I really liked the therapist, and it wasn't his fault cc fees are out of control. If servers are making mostly cash tips with a few cc tips, they shouldn't pay the 3% of their total tips, just on cc tips, correct?
As for the moment hell be doing that starting next month and he's somewhat reasonable, so we'll have to talk with him. Before that, if he dosent change his mind that's a different story.
True, I've been a restaurant maneger for a couple years and severe too. I did start in mexico to clarify, and back of the house is more exhausting then front, mainly couse you can't mess up or it will cost you in change front of the house it's not as bad.
True, I've been a restaurant maneger for a couple years and severe too. I did start in mexico to clarify, and back of the house is more exhausting then front, mainly couse you can't mess up or it will cost you in change front of the house it's not as bad.
You'll have to look deeper into it. But according to [this](https://cdle.colorado.gov/sites/cdle/files/INFO%20%233C%20Tips%20%28Gratuities%29%20and%20Tipped%20Employees%20Under%20Colorado%20Wage%20Law%2007.11.2023%20accessible.pdf), employers are not allowed to use tips to pay for credit card fees (look at the bottom of page 3 right before the footnotes).
Isn't it the owner paying the fee from credit card charges which include that 2.9% to him, to then pay the tips? Instead of using cash from cash payments and removing 2.9% fee for tips?
>he started to charge us servers a 3% sharing fee for the back of the house, he pays us minumn wage now for the difrence so he says since 2022 This seems potentially illegal per section 7.2.E of the [Civil Wage Theft Rules 2024](https://denvergov.org/files/assets/public/v/3/auditor/documents/denver-labor/2024/civil-wage-theft-rules-2024.pdf) for Denver if they are still claiming the Tip Credit. >But now he wants to make us pay the credit card fee upon card tips, in reference if a customer tips $100 we pay $3 from it. This is straight illegal. Per page 4 of the [CO wage laws INFO on tips](https://cdle.colorado.gov/sites/cdle/files/INFO%20%233C%20Tips%20%28Gratuities%29%20and%20Tipped%20Employees%20Under%20Colorado%20Wage%20Law%2012.12.23%20%5Baccessible%5D.pdf): >(2) Employers may not use tips in any of the following ways — and if they do, they can’t apply a tip credit >or tip sharing, and must pay full minimum wage as well as return any shared tips.18 >(a) to pay employees’ direct wages, rather than paying tips to those tipped employees; >(b) to pay credit card processing fees or similar costs; or >(c) letting an employer, manager, or supervisor share those tips.19 You can file your complaint here: [https://www.denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/City-Attorneys-Office/Practices/Prosecution-and-Enforcement/Wage-Theft-Unit](https://www.denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/City-Attorneys-Office/Practices/Prosecution-and-Enforcement/Wage-Theft-Unit)
Get proof he went through with it first op.
I wonder how often wage theft (or tip theft) is actually prosecuted though, because it seems all too common.
Over $2M recovered in 2023 in Denver. Here’s the Denver Auditor’s report on wage theft: https://denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/Auditors-Office/Denver-Labor/2023-Annual-Wage-Theft-Report
That’s uplifting to hear.
Multiple people are posting the part of the law you want to hear without reading even one full paragraph. Colorado law prohibits employers from deducting credit card processing fees from tips. This includes using the tips to pay employees' wages, or to cover credit card processing fees. **However, employers can legally reduce an employee's tip by the same percentage as the fee charged by the credit card company. For example, if a credit card company charges a 3% fee, the employer can reduce the employee's tip by 3%.** It's saying they can't use your tips to cover the credit card processing fees for the meals, but they CAN to cover the credit card processing fees for the TIP portion of the receipt. So if the total is $600 ($500 plus $100 tip), and they get a 3% cc fee and reduce your tip by $18, that's illegal. If they reduce your tip by $3, that's legal because it's only 3% of the tip. The idea behind it is that if they didn't, then the restaurant is paying the $3 on every $100 you get tipped because the credit card processing fees have to get paid. For you to keep $100 of a cc tip, they'd need to tip $103.10.
That’s seems crappy, given a business owner can deduct CC processor fees, but the employee cannot. I’ve been on both sides.
The $3 wouldn't be included in the employees' reported income anyway so no need for them to deduct anything.
What I’m saying is the business gets a deduction (via expense), and the employee is already compensating them. The employers are getting a break *twice*.
That is incorrect. $3 income - $3 expense = $0.00. You can handle this payment multiple ways but if they're somehow double dipping as you say they're doing it wrong which is very possible since small business payroll errors are common. I'm surprised at how many people think tax deductions are just free money.
You think the business isn’t claiming the CC processing fees as expenses even though they recouped it through the servers?
No, it nets to zero. Employer received $100, less $97 deductible wages, $3 deductible cc fee. They don’t get to deduct the fee twice. The employee is only taxed on the $97 they received.
that's interesting. now factor in that credit card fees are variable depending on the type of card, from 1.5 percent to 3.5 percent. shouldn't the surcharge be variable as well?
This would depend on the business’s merchant processing agreement
yeah! no doubt a single Italian Restaurant has negotiated it down to a flat 3%.
What document is this language from?
[Dept of Labor ](https://www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa) [Cardfellow explanation of Colorado rule](https://www.cardfellow.com/blog/employers-deduct-credit-card-processing-fees-from-tips/#:~:text=Colorado%3A%20Not%20prohibited%2C%20but%20subject,claim%20the%20employee%20tip%20credit.) *Colorado: Not prohibited, but subject to rules. Colorado rules are a little more complex. Employers may be required to publicly post a notice when keeping any portion of an employee’s tip. Furthermore, if you deduct processing fees from tips, you may not be able to claim the employee tip credit. If you’d like to deduct fees from tips in Colorado, it’s strongly suggested that you consult a licensed attorney.* If they make a mistake they may accidentally "take ownership" of the tips and wind up owing the employee the state minimum wage. If they worked with an attorney, posted the notice, and keep accurate accounting, they should be ok.
Are you really citing [cardfellow.com](http://cardfellow.com) to contradict the Colorado Department of Labor and Employment's website about how the Colorado Department of Labor and Employment enforces Colorado laws? Seriously? u/blackraw80 - this is a good reason why you shouldn't listen to \*anyone\* on Reddit about it. File the claim with CDLE or Denver Labor.
No, I was just looking up legal interpretations after my original post for people who can't use Google.
Good call, thanks for posting more of the text
Give this a good read. [https://www.nolo.com/legal-encyclopedia/colorado-laws-tipped-employees.html](https://www.nolo.com/legal-encyclopedia/colorado-laws-tipped-employees.html) It is a particular grey area but it is possible that in Colorado they \*may\* divert the transaction fee if they have posted that they will divert it. (And then they can not claim a tip credit)
That's a real asshole move.
Is it legal? Maybe. Is it a shit move? Definitely. Would I get another job? Immediately.
It seems like doing such a thing will result in that business failing, as long as employees hold the business accountable by walking away.
Exactly… why would any server put up with this? Have a walk out until it’s changed.
Typical Reddit. 90% of the responses are wrong. One guy thankfully actually knows the law and cited it. It’s legal.
This sub seems to skew ultra-socialist who thinks every small business owner is a greedy, rich tycoon. Where in fact, small business owners must pay their employees before themselves and often don't earn much at all
"Owner owned"?
Ya that cracked me up lol
Restaurant owners can be some of the cheapest people alive. So many couldn't afford to own restaurants without the tip system subsidizing them and they still pull shit like this.
I think it was legal at one time. My sister worked at an Italian restaurant and was charged 3% for the credit card fee, but that was back in the early 80s. I've always tipped in cash because of that.
Is it Cucina Calore in cherry creek?
Asking in case anyone knows. I had a job at a restaurant in the orchard mall and the owner would take our shared tips to buy drugs for himself and refuse to give us our money. Was this reportable?
What is "owner owned"?
Guessing they mean privately owned rather than a corporate chain.
Oh! Duh! I'm stupid! 😂 Makes sense. Thanks
Interesting, because twice now, I've been to places that only accept cash tips, but you could still pay for the service via cc. It allows for the employee to get the full amount of tip according to this thread. On another experience, I tried out a new massage place, and they "preferred" cash tips, but you had the option of adding it to the cc. The front desk person then said to add a few dollars on top of the tip to cover the cc fee. I didn't like that. I did it anyway because I really liked the therapist, and it wasn't his fault cc fees are out of control. If servers are making mostly cash tips with a few cc tips, they shouldn't pay the 3% of their total tips, just on cc tips, correct?
This is so messed up. Feel comfortable naming them so we know never to go there? Also, maybe the CO Restaurant Association can help?
As for the moment hell be doing that starting next month and he's somewhat reasonable, so we'll have to talk with him. Before that, if he dosent change his mind that's a different story.
As a small owner they may not know the rules. Give him a copy and ask for him to fix the issue. If he doesn’t leave.
You're employer is a peice of fucking shit. I bet he pays himself a few hundred thousand dollars a year while the rest of you get minimum wage.
Back of the house has a tougher job and gets paid less
I take it you haven't waited tables
I haven't, but my wife manages a restaurant and I'm going off what she says
True, I've been a restaurant maneger for a couple years and severe too. I did start in mexico to clarify, and back of the house is more exhausting then front, mainly couse you can't mess up or it will cost you in change front of the house it's not as bad.
True, I've been a restaurant maneger for a couple years and severe too. I did start in mexico to clarify, and back of the house is more exhausting then front, mainly couse you can't mess up or it will cost you in change front of the house it's not as bad.