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While doing a little reading of the now infamous Department of Labor Field Operations Handbook (thanks Gregster!), I came across this information about paying employees tips that are put on credit cards.
http://www.dol.gov/esa/whd/FOH/FOH_Ch30.pdf
I DO NOT reduct the tip amount by my transaction processing fees. Think about 1 driver working 5 days per week, making $30 in CC tips per day. That’s $7800 per year. At, for example, 3%, that’s $234 per year per driver out of my pocket that I should not be paying according to the DOL.
I DO NOT hold the CC tips and pay them at the next pay period. CC tips are given to the drivers every night at cash out.
I DO NOT ask the drivers to refund to me the tips on CC orders that were chargedback.
http://www.dol.gov/esa/whd/FOH/FOH_Ch30.pdf
- According to paragraph 30d05, section (a) - you CAN reduce the amount of the tip by the percentage charged by your CC processor to process the transaction. So, if the tip on the CC is $1, and your CC transaction cost is 3%, you only need to pay 97 cents
- According to section (b) of that same section - you can hold those CC tips and not pay them to the driver until the next regular payday for that work period.
- According to section (d) of that same section - you can recover from the driver any tips that were paid and subsequently chargedback - as long as the amount to be recovered doesn’t reduce the pay for that period below MW.
I DO NOT reduct the tip amount by my transaction processing fees. Think about 1 driver working 5 days per week, making $30 in CC tips per day. That’s $7800 per year. At, for example, 3%, that’s $234 per year per driver out of my pocket that I should not be paying according to the DOL.
I DO NOT hold the CC tips and pay them at the next pay period. CC tips are given to the drivers every night at cash out.
I DO NOT ask the drivers to refund to me the tips on CC orders that were chargedback.
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