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[Texas] The bar I work at started taking credit card processing fees out of my tips.

I have worked at this bar for just under a year now (10 months). In that time, credit card processing fees have never been deducted from my tips. When I started, there was no employee handbook, no set schedule, and no onboarding forms or paperwork was signed besides a W-4 and an I-9. Frankly, the owners of this bar are pretty hands off. They have almost no idea what's going on on a day to day, don't understand how to operate their own bar, and I'd say I see them in person maybe once a month. They just expect me to kind of run the whole show. On my most recent paycheck, there was a new deduction listed on my pay stub for credit card processing fees. I know in Texas, it's legal (or at least not expressly illegal) for the employer to take the fees they paid for credit…


I have worked at this bar for just under a year now (10 months). In that time, credit card processing fees have never been deducted from my tips. When I started, there was no employee handbook, no set schedule, and no onboarding forms or paperwork was signed besides a W-4 and an I-9.

Frankly, the owners of this bar are pretty hands off. They have almost no idea what's going on on a day to day, don't understand how to operate their own bar, and I'd say I see them in person maybe once a month. They just expect me to kind of run the whole show.

On my most recent paycheck, there was a new deduction listed on my pay stub for credit card processing fees. I know in Texas, it's legal (or at least not expressly illegal) for the employer to take the fees they paid for credit card processing of tips left on the card.

But I receive no advance notice that this would be happening, never received a memo, never signed anything, and was never told that this deduction would be being applied to my checks going forward.

Is this legal?

Best I could find regarding payroll deductions in Texas are that they are only allowed by court order (garnishments, etc), when “authorized to do so by state or federal law, such as IRS withholding”, or with “proper written authorization from an employee”.

Best I could find is that taking credit card fees from tips in Texas is that it's not expressly permitted by state law, but that there is no ruling against it. Because it's not expressly permitted, does that mean that it falls under the “needs proper written authorization” before they can do it?

In addition, the fees were deducted from my net pay, not from my gross. I paid taxes on my gross, and they included this as a post tax deduction. That can't possibly be correct, can it? I'd figure that if that money isn't my “income”, it should be taken pre-tax.

When asked about it, one of the owners said “we've always done that, but this is the first time it's been itemized on your pay stub.”

I was hoping this was the case, as that is expressly illegal under Texas pay stub law and gives me a clearer cut way to handle this, but when I went back to some previous stubs and did all the math, it came out correct. When texted and asked to clarify that they had been making the deduction for the last 10 months without showing it on my pay stub, she did not text back, so I was unable to get anything in writing regarding that statement. If they had been making this deduction this whole time and not reflecting it, they must have been pulling it from my gross tips, and under reporting the amount of tips I had made on my stub, rather than deducting without reporting.

Thanks in advance.

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