With the rise in tipping for everything following COVID, I am not at all surprised that some employers are possibly stealing some of the money people leave for tips. In an article on View from the Wing, the author (Gary Leff) discusses an allegation that certain hotels in Orlando (the Hyatt House and Hampton Inn & Suites) are stealing 11% of the tips people are leaving.
The way it works is that these hotels offer shuttle services to their guests and they encourage the guests to “tip with Zelle using QR codes.” For those who do not know, QR codes are a type of barcode that can be scanned with a smartphone to access information. Hotels and restaurants have added them to making tipping easier for patrons. Thereby allowing the hotels and restaurants to pay their employees less (Federal and State laws allow employers to pay their employee less if they are entitled to tips).
These providers typically charge fees similar to credit card processors. Usually between 2% and 3% per transaction. This normal range is a far call from the 11% that these hotels in Florida are being billed for these transactions.
While the Fair Labor Standards Act (FLSA) allows employers to deduct credit card processing fees from employee tips, they can not do that if the employee’s minimum wage is affected. This calculation is why most hotels absorb the processing fees. However certain states like Florida, do not allow employers to deduct credit card fees from tips. This is because tips are the sole property of the employees who earned them.
If it is true that these hotels are passing the process fees for tips onto employees, then the hotels are violating Florida (and possibly Federal law) and are in effect stealing from the employee.
Where does that leave patrons? I do not want to tip the hotel or restaurant. They are already charging me for their services. Why should I pay more? I may have to go back to tipping people in cash. I know this is a headache for people to make sure that they have cash but I do feel for the servers and other people receiving tips.