Employer, employee should discuss tips

Dear Working Wise: I work in a small local coffee shop. We have a tip jar at the cash register, but the store owner splits the tips with us. Is the store owner allowed to do that? Aren’t tips supposed to be for the staff who provide good service? Signed, Tipped Of

Dear Working Wise:

I work in a small local coffee shop.

We have a tip jar at the cash register, but the store owner splits the tips with us. Is the store owner allowed to do that? Aren’t tips supposed to be for the staff who provide good service? Signed, Tipped Off

Dear Tipped Off:

I’m sorry that I don’t have better news for you, but tips are not considered to be wages under Alberta’s Employment Standards Code. How tips are handled in your workplace is a decision between you (the employee) and your employer. That’s why it’s important to discuss all the terms of employment — including tips — before you accept a new job.

If it’s really bothering you, try talking to your employer about it.

If you don’t believe your employer is living up to your original agreement or if you believe you are not receiving tips that are intended for you, one option could be to explore the possibility of legal action through the courts. For more information on accessing the courts, visit www.albertacourts.ab.ca.

Although tips are not considered to be wages under the Employment Standards Code, they are still considered earnings and must be claimed as income on your income tax return—this includes your employer. For more information on tips and their tax implications, visit www.cra-arc.gc.ca.

Wages

As far as your wages go, your employer must pay you at least once a month. Most employers establish pay periods of a week, two weeks or a month and employees must be paid within 10 days after the end of each pay period.

Employees may be paid in cash, by cheque or money order or by direct deposit, into an account of an employee’s choice, in any recognized financial institution.

Deductions

The Employment Standards Code allows deductions to be made from employee earnings. These include legal deductions for Income Tax, Canada Pension Plan and Employment Insurance, as well as deductions resulting from a judgment or order of a court.

Your employer requires your written permission before making any other deductions.

Examples include deductions for company pension plans, dental plans, personal charges to company credit cards, parking fees, and so on. These types of deductions are often discussed and permissions are provided before you even start your new job.

There are some deductions that are not allowed, even with a written authorization from the employee. Your employer cannot take deductions from your wages for faulty workmanship. Employers also may not deduct for cash shortages or loss of property where more than one person has access to the cash or property.

Your situation provides a valuable lesson to all employees: be sure you discuss and clearly understand all the terms and conditions of employment before you take a new job.

For more tips and questions to ask when negotiating job offers, visit the Alberta Learning Information Service (ALIS) web site at www.alis.alberta.ca and search the tip sheets for Handling Job Offers.

Good luck negotiating your next job offer!

Working Wise is compiled weekly by Charles Strachey, a regional manager with Alberta Employment and Immigration. Work-related questions can be sent to him at charles.strachey@gov.ab.ca. Working Wise is provided for general information only. Help with specific situations is available through Alberta Employment Standards by calling 1-877-427-3731.

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