Ask US Paywizard.org: Boss Changes Amount of Claimed Tips - is that legal?

My boss is changing the amount of claimed tips. Is that legal?

Answer Paywizard:

New Jersey has no minimum wage for tipped workers, allowing them to be paid entirely in tips under state law. Most New Jersey workers are also covered by the federal minimum wage, which does establish a minimum wage for tipped workers of $2.13 per hour. Combined with received tips you must earn at least the minimum wage of $7.15 per hour.

Annualized that would add up to a minimum wage of $14,872, that is if you would work 5 days a week, 8 hours a day, without vacation. You've earned more than the minimum wage, but it's not clear what the amount of tips was, within the total sum. The IRS says that you have to keep a daily tip record, so you can report your tips to your employer, report your tips on your tax return and prove your tip income if your return is ever questioned. In the link your find the IRS tip about how to keep a daily record.

If you have a daily record of your tips, you don't have to report allocated tips on your tax return, because it is possible that your employer (re)allocates tips to you or your colleagues. If so you'll find these tips on your W-2 form, in box 8.

Allocated tips are tips that your employer assigns to you in addition to the tips you reported to your employer for the year. Your employer is allowed to do this if you work in a restaurant, cocktail lounge, or similar business that must allocate tips to employees; the tips you reported to your employer were less than your share of 8% of food and drink sales.
You find more about allocated tips in the previous IRS link.

I hope this helps.

If you believe your employer is not paying you properly under the federal minimum wage law, contact the United States Department of Labor Office nearest you. There are two offices: one for Northern New Jersey and one for Southern New Jersey. You may reach both offices toll-free at 1-866-4-USWAGE (1-866-487-9243).

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