REHOBOTH BEACH, Del. - The Delaware Department of Labor has confirmed that deducting credit card processing fees from employees' tips is illegal under state law. Following an investigation prompted by complaints, the DOL cited Title 19, Chapter 9, Section 902(d) of the Delaware Code, which states that gratuities belong solely to employees.
Additionally, Delaware’s Wage Payment and Collection Act does not allow employers to divert credit card fees from wages, including tips. Any agreements to the contrary are void.
The DOL is notifying businesses with tipped employees that such deductions are prohibited, ensuring workers receive their full earned tips. Attorney General Kathleen Jennings emphasized the importance of fair compensation, particularly amid rising living costs.
Brian Elliot a server at Gio's in Rehoboth Beach says there is other ways to make up for those fees not being in place.
"If you want to get an extra 3% just raise your prices. What's the big deal?"