Tips and unemployment benefits have a long history. Of course, by tips I mean money given to a waiter, bartender, server, driver, hair stylist, or just about anybody else for providing a service.

When we start linking money gifted by a customer to an unemployment benefit, things go bad very quickly. Whether applicants start thinking about their worst case scenario, sometimes there are accusations of misrepresentation. This problem can multiply when you consider the IRS’ interest in the matter.

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.

Finding Out That There Was a Problem

Generally, a person becomes aware of an unemployment claim and a gratuitous tip problem 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.

All of these methods are scary and require a different legal response. Thus, take their notices seriously.

Unemployment Laws for Tips

The word tip appears next to the definition of wages. As a result, consider looking at the 30 plus Minnesota unemployment cases that interpret tip law. Unfortunately, the difference between a tip and wage can be very confusing.

In the meantime, take a look at Minnesota Statute 268.035 and look at the dozens of unemployment tips I shared in other blog posts.