OVERVIEW:
This policy outlines the guidelines for accepting tips and gifts to ensure compliance with applicable laws and maintain the integrity of the Company.

GUIDELINES FOR ACCEPTING TIPS:
Service Standards: Providing quality service should not depend on receiving tips. Employees must not request or imply that tips or gratuities are expected.
Eligibility: Only hourly employees in approved tipped positions may accept tips from guests.

REWARDS AND RECOGNITION:
Company-Sponsored Events: Employees may receive cash, cash equivalents, gifts, or prizes through company-sponsored events or recognition programs.
Tax Implications: The value of these items is considered compensation and is subject to federal, state, and employment tax withholding, reported on Form W-2. Employees will be taxed at their current rate based on the value of the item during the next pay period.

TIP PAYOUTS:
Recording and Payment: All tips collected during a shift are recorded and paid out during the employee’s next payroll.

TAX COMPLIANCE:
IRS Reporting Requirements: Employees must report all cash tips received to the Company if they total $20 or more in a month. Tips are subject to federal income tax, Social Security, and Medicare taxes and will be reported on Form W-2.
Employer Obligations: The Company is responsible for withholding taxes on reported tips and ensuring compliance with IRS regulations, including the filing of Form 8027 where applicable.
Minimum Wage Compliance: The Company adheres to the Fair Labor Standards Act (FLSA) guidelines regarding the tip credit toward minimum wage obligations, ensuring that tipped employees receive at least the federal minimum wage.
Taxation of Gifts and Prizes: Any gifts, prizes, or awards received through company-sponsored events or programs are considered taxable compensation and will be included in the employee’s gross income, subject to tax withholding.
State and Local Compliance: The Company complies with all applicable state and local regulations regarding tips and gift taxation.