Be sure to know the laws that protect service industry workers. 

 

Protect Service Industry Workers

 

Whether you work in a hotel or a bar, the common mentality seems to be, do as you're told and don’t ask questions. Maybe in your place this means tipping out everyone under the sun or working 5 back to back doubles.

However, regardless of where you work and who owns the establishment, you have rights. The Department of Labor has regulations that dictate everything from your hours to your wages. You don’t have to put up with unfair treatment just because you’re in the service industry.  

 

Let’s Talk About Money 

 

 

 

Your Wage

 

This is a tricky one. Wage laws are constantly in flux in America and it can be hard to keep up. Every state is different, but rules govern what your employer has to pay you. In some states tipped workers must receive the federal minimum wage (currently $7.25), while in others employers are exempt from this requirement. Now is a good time to whip out that pay stub and see what you’re getting.  Find the laws for your state HERE. If you’re not being paid the correct amount you can file a complaint with the Department of Labor. Go HERE for some frequently asked questions.

 

 

Tip-Outs

 

Ok, so you probably make most of your money from tips, not from your hourly rate.  Every establishment does things slightly differently, but it’s standard practice to tip out bartenders, busboys, etc.  However, even though the tip out procedure varies from place to place, laws govern who is eligible to receive these payouts and who is not. For instance, there is no requirement to tip out maintenance workers, chefs and managers. For more info, go HERE.

 

Keeping Your Tips

 

You, as a tipped employee, should be keeping all of your earned tips (excluding valid tip pooling of course).  The owner can never take any of this money from you.  Also, if your employer is taking weeks to dole out your money, they may be in violation of the Fair Labor Standards Act.  Contact the Department of Labor if you think there’s an issue.

Also, if your combined tips and wages do not equal the federal minimum wage, your employer may be responsible for making up the difference.

 

Overtime

 

Despite the variations across the country, all tipped employees should receive overtime after 40 hours of work. Additionally, this overtime should be calculated using the full minimum wage as a base, not the lower, exemption wage. Go HERE for more info.

 

Regulations on Hours

 

 

There are tons of regulations on hours, breaks, and pay. However, they vary wildly from state to state. Generally, for every certain amount of hours worked, you should receive a “meal” or “rest” break. There are also laws governing how much you are owed for “split-shifts:" days when you might have to work from 9am-3pm and then again from 5pm-10pm.  

While you may have heard that you are owed a certain amount of hours between shifts, there actually isn’t a legal requirement for this.  However, there are people working towards putting this in place. Hopefully that will signal the end of “clopening”.

 

Miscellaneous Expenses

 

Although yet again, these rules vary state by state, it may be illegal for a restaurant to charge you for walk-outs, cash register shortages, and other random mishaps.  Your employer may even be responsible for paying for your uniform and its upkeep.  

Look up the laws in your area if you think you’re being illegally held accountable for any costs. 

 

A Safe Workplace

 

You are entitled to a safe and healthy work environment.  The Occupational Safety and Health Administration enforces regulations on workplace safety.  They are also the ones to go to if you have any questions or would like to report unsafe conditions.  Visit their site HERE for more info or to file a complaint, which you can do anonymously.

Note: It is 100% illegal for your employer to retaliate against you if you file a complaint.  Dontact the Department of Labor or a lawyer if you are treated unfairly.

 

 

Injured on the Job

 

If you hurt yourself on the job, you may be eligible for Workers’ Compensation from your employer. HERE is a handy little fact sheet about the requirements for filing a workers’ comp claim.

We take your safety and rights very seriously.  However, we are neither a government agency nor are we lawyers.  If you feel you are being mistreated or have questions about the laws in your area, contact the appropriate department.

 

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Everyone thinks being a bartender is all about fast cash, and a lot of it is. But, when the IRS comes calling, we pay and we pay big.

 

Bartenders and Taxes

 

For many of us, April 15 th looms like a giant question mark in our minds.

What will we owe? Will our tax bill wipe out our (sometimes measly) savings accounts?

The thing is, bartenders and servers rely almost solely on their tips, often all of which are received in cash. Our checks are then taxed and depending on how much of your tips your employer is claiming, they can amount to literally nothing. I’m talking voided checks or or ones worth pennies.

So, to help all those hospitality workers out there, here are some things you should know about your taxes.

 

 

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What I Should Report?

 

bartender taxes

 

Most likely your employer is reporting your tips for you and taking the requisite taxes out of your hourly paycheck.  However, your stingy hourly rate may not be enough to cover the taxes on your tips.  This is why most of us owe the tax man come filing time.

Technically you should be reporting all of your tips, cash and credit card.  Some restaurants fudge this information as conventional wisdom has it that the IRS assumes you’re only making 8% of your sales in tips. However, this isn’t exactly the case. Following this advice could leave you at risk for an audit, especially if you’re claiming something below this threshold.

It is always wise to claim all of your tips; you’ll be thankful later when you’re not getting audited. Here is the IRS page about tip reporting.

 

What Can I Write Off?

 

bartender server taxes

 

Tip Outs

One major piece of advice we have for tipped workers is to keep careful track of what you’re tipping out to busboys, service bartenders, etc.  If this isn’t being factored into how your employer claims your income, you could end up owing more then you should.  You aren’t required to claim money you didn’t receive. So, have a chat with your manager about whether they’re claiming your income before or after your tip outs.

Your Uniform

If your employer doesn’t reimburse you for uniforms and shoes, you can and should write them off. Be sure to keep all of your receipts just in case.  If you buy your uniforms from your restaurant or bar, just ask them to make you out a simple receipt.  As long as they are required for the job and unsuitable to be worn outside of work (I’m looking at you, khaki Polos), you can write them off.

Any Extra Training or Classes

Did you have to get a food handler’s certificate or become TIPS certified to keep your job?  If so, save those receipts and write those babies off!

Credit Card Processing Fees

Although rare, if your owner is passing on the cost of accepting credit cards to you, you can write off the processing fees as an expense when you file your taxes.  Consult the IRS or a tax professional for more information on write-offs.

 

My Paycheck is Confusing, Help Me

 

bartender taxes server taxes

 

Firstly, find out what tax bracket you fall into by looking at your paycheck and extrapolating it for the entire year.  While this may vary, it should give you a good idea of how much you’ll be claiming. Remember, you’re looking at your “Total Pay”, not your “Net Pay” which is only what you’re taking home in your check.

Next, check out the tax rates in your area since you’re expected to pay the Federal government as well as the state.  This will help you understand what percentage of your income the IRS expects you to pay.

There are plenty of resources and tax calculators to help you out with this. While we don’t recommend taking these as gospel truth, it’s really nice to know the general amount you need to be socking away for taxes. If you often get voided checks from your establishment, there may be a shortfall. This means you will owe money because your hourly rate is not enough to cover the taxes on your tips.

 

 

 

 

How Should I Budget for Taxes?

 

bartender taxes server taxes

 

The general rule of thumb is to allocate 10-15% of what your total pay is every week for taxes.  If you get into the habit of doing this, and placing it into a separate account, you won’t even miss that money.  Then when it’s time to pay up, you have what you need (hopefully) ready to go.  While this is obviously not foolproof, it’s a good start and if you have money left over after paying the IRS, hallelujah!


We hope this article helps you figure everything out. However, we are neither lawyers nor tax accountants so you should always seek professional advice if you have any questions about your taxes.

 

 

Want to connect with people at the bar in a whole new way? Download the BOTY App on iTunes or Google Play for free!

 

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