The Illinois Bar Journal published an article by Gordon & Rees Chicago associate Brian Roth in its May issue.
In the article, titled “The Tipping Point: Does a Recent IRS Ruling Mean the End of Automatic Gratuities?” Brian discussed how Revenue Ruling 2012-18 classifies automatic gratuities as service charges, which are considered restaurant income. If these service charges are distributed to employees, they are considered wages, which disrupts the long-standing restaurant industry practice of treating automatic gratuities as tips. As a result, there are numerous wage-and-hour and tax implications. For example, restaurants can no longer take the “tip credit” for employees who serve guests subject to an automatic gratuity, among other things.
Brian's practice focuses on commercial, employment, and environmental/toxic tort litigation in federal and state courts. He represents businesses and business owners in a wide range of commercial disputes, including those involving breach of contract, business tort, and consumer fraud claims. In his employment practice, he defends employers in actions alleging discrimination, harassment, retaliation, and wrongful termination. Brian also represents employers in wage-and-hour collective action litigation and defends manufacturers and premises owners in lawsuits alleging exposure to hazardous substances.
To read the article, click here.