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Tip Credit Reporting

Updated

If you’re an employer using the Tip Credit Calculation settings in 7shifts, the Worked Hours & Wages (WH&W) Report provides detailed insights into Tip Credits, Shortages, and other related payroll information. This report helps ensure compliance and accuracy when managing tipped employees. This article outlines how admin users can access the WH&W Report and the key insights to look for when considering Tip Credit Calculations in this report.

How to Access the WH&W Report:

  1. From the 7shifts web app, navigate to Reports > Worked Hours and Wages.
  2. Use the available filters to refine your results.
  3. Click Get Report to generate the data.

⚠️ Pro Tip: The Best Time to Generate the WH&W Report for Tip Credits

To get the most accurate Tip Credit, Tip Shortage, and Tip Pooling data, the best time to pull the WH&W Report is at the end of your payroll period, after all hours worked and tips earned have been accounted for. This ensures that the data is complete, accurate, and finalized, which is crucial for compliance and for calculating amounts owed to employees.

Key Tip Credit Reporting Considerations:

  • Incomplete Date Ranges:

    • If the selected date range does not align with your payroll frequency (e.g., weekly, bi-weekly), a warning will appear. This serves as a reminder that data for Tip Pooling, Tipped Minimum Wage, and/or Tip Credits/Shortages may not be accurately reflected in the final calculation.

  • Tip Pooling:

    • If you are using Tip Pooling on a weekly or bi-weekly basis, pulling a report mid-period may result in incomplete or inaccurate data for Tip Credits and Shortages.
    • Employers using Tip Credits alongside Tip Pooling must comply with local, state, or jurisdictional laws. A banner will display if 7shifts Tip pools include tipped minimum wage roles.
⚠️ Important: Always review your local tip pooling regulations to avoid compliance issues.

  • Tipped Minimum Wage:

    • Reports generated during an active tipped minimum wage calculation period may not show finalized Tip Credits or Shortages.
    • Tipped Minimum Wage is calculated weekly in most states, but daily in Massachusetts.

  • Tip Credit and Shortage Columns:

    • Tip Credit Column: Displays the amount employees need to earn in tips to avoid a shortage. If employees’ earned tips fall short of the Tip Credit amount, a Tip Shortage will occur.
    • Tip Shortage Column: Indicates the amount employers owe employees when tips do not fully cover the Tip Credit.

  • Tip Credit and Shortage Calculations:

    • Weekly Calculation (Most States): Sum the tips earned in tipped roles for the week. If this total is less than the weekly Tip Credit, the employer owes the difference.
    • Daily Calculation (Massachusetts): Compare daily tips earned to the daily Tip Credit. Employers owe the shortfall for that day.

⚠️Important: Shortages cannot be adjusted by “topping up” from another week or day. The Tip Shortage field remains empty until the end of the payroll week (or day in Massachusetts), when the final shortage is calculated.

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RELATED ARTICLES:

Running Payroll With Tip Credit Calculations
How to Enable Tip Credit Calculations

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