Is it legal for my employer to claim that I received a tip on a cash purchase when I didn’t receive a tip?

UPDATED: Oct 1, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Is it legal for my employer to claim that I received a tip on a cash purchase when I didn’t receive a tip?

I’m a delivery driver and on cash purchases by customers, my employer

automatically deducts a chase tip from my paycheck on that purchase whether I received a tip or not. I don’t think that’s fair because I normally don’t receive a tip and that decreases my hourly wage because the employer claims I made that money which is calculated in determining my hourly wage.

Asked on July 11, 2018 under Employment Labor Law, Illinois


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Legally, you can only be paid less than minimum wage if you are in a tipped job AND actually receive tips, AND those tips must be enough to take you at least up to minimum wage. (This is the "tip credit" that lets employers pay tipped employees less than minimum in certain circumstances.) So if he is paying you less than minimum on assumed tips when you are not in fact receiving sufficient tips to bring your effective hourly wage back up over minimum, that is not legal. If you are being paid less than minimum without actually receiving tips to make up for the shortfall, contact the state department of labor.
But if you are being paid at least minimum, however, this is legal: so long as the employee receives at least minimum wages, the employer may pay him or her whatever he or she wants, based on any reason, including assumed or hypothetical tips. So if you're getting at least minimum wage, the employer may pay you less than you would otherwise make because he thinks you are getting tips.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption