Unreported tips could spell high workers’ compensation payout

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in Compensation and Benefits,Employee Benefits Program,Human Resources

Employers and employees in cash businesses often bluff, wink and nod their way around the edge of wage-and-hour law legality. But when it’s time to settle workers’ compensation claims, all the cards must go on the table.

A recent Florida workers’ compensation case shows just how wrong things can go when employers give their employees unrequested advice on reporting income. At issue in this case: The restaurant industry’s traditional—and illegal—practice of underreporting tip income.

Injury forces employer’s hand

A waitress at the Myakka River Oyster Bar injured herself on the job. Florida workers’ compensation benefits are based on the employee’s average weekly wage during the 13 weeks before the injury. In this case, the woman had been working for only six weeks when the injury occurred. So those six weeks were used to calculate her benefit.

At first it appeared as though she would not receive much. When the court...(register to read more)

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