Tips and unemployment benefits have a long history. Take into consideration application confusion and lower wages, and the gray quickly turns into a fight against misrepresentation.
The issue with tips can be as simple as determining whether money or change should be considered part of a worker’s wage. This is an issue for two reasons. First, the unemployment office is confused too. Second, unemployment laws, specifically Minnesota laws, use the word “tips”.
Finding Out there is a Problem
Generally, a person becomes aware of a gratuitous tip problem and an impact on their unemployment claim in one of a handful of ways. This includes:
- Receiving a letter stating there was an overpayment,
- Learning about an audit,
- Hearing from past co-workers,
- Learning that the Department of Labor is auditing wage and hour issues,
- Receiving a letter from Minnesota’s Department of Revenue,
- Getting notice of a Federal Overpayment, and
- Seeing the phrase “misrepresentation” inside one’s online unemployment account.
Unemployment Laws for Tips
Take a look at Minnesota Statute 268.035. Under this law, the word tip appears next to the definition of wages. Also, an applicant should consider looking at the 30 plus cases that interpret the tip law. Unfortunately, the difference between a tip and wage can appear very confusing.
If you ask an employer for help, they will often run the other way. Rightfully so, because they hardly know themselves. Thinking about asking the unemployment office for help? You might incur consequences.
For this reason, the issue is not the definition of a tip. Instead, the bigger point is determining where in the application or appeal process an applicant is finding themselves. Then, assessing the goal (for example defending an appeal or audit) while looking for an ideal remedy.