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May we collect ‘walkout’ shortages from tips?

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in Compensation and Benefits,Human Resources

Q. We operate several restaurants and have issues with customers who walk out without paying. We expect our ­servers to help prevent this and want to implement a program that makes servers responsible for these losses. We know we can’t take a deduction from an employee’s wages for lost or stolen property without the employee’s consent. However, may we deduct the amount of the shortage from employees’ gratuities instead of their wages?

A. You are correct that, in Minnesota, an employer may not deduct from wages earned by an employee for lost or stolen property unless, after the loss occurs, the employee voluntarily authorizes the employer in writing to make the deduction or unless the employee is held liable in court for the loss. Your question implies that you think that gratuities are not “wages” under Minnesota law.

In fact, the Minnesota Supreme Court has concluded that gratuities are wages for purposes of the statute relating to deductions. Therefore, the deduction would violate the law and you would be liable for twice the amount of the deduction.

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