Restaurant 101: What to do if Your Employer Doesn’t Provide Paycheck Stubs

Yesterday, I posted the news that Michael Costa of The Office Grill filed for bankruptcy. In the comments section, one of Costa’s former employees asked a great question.

Anybody have some suggestions for the former employees when it comes tax time? We never received check stubs or info on the taxes taken out of them, that is when we did get them and they didn’t bounce.

I contacted Gregory P. Williams, a CPA with Restaurant CFO Partners in Plano. He has a lot of answers. They are below. I’ve also included his contact information if you have more questions.

Here’s Greg:

Good question!  Below are the official IRS procedures to follow in this situation.  Even in bankruptcy, employers generally send out W-2’s.  If this is not the case in this situation, then I anticipate that the employee will have to follow procedures 2 & 3 and estimate their earnings.

If you haven’t received your W-2, follow these four steps:

1. Contact your employer -If you have not received your W-2, contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2.

2. Contact the IRS –  If you do not receive your W-2 by February 14th, contact the IRS for assistance at 800-829-1040. When you call, you must provide your name, address, city and state, including zip code, Social Security number, phone number and have the following information:

• Employer’s name, address, city and state, including zip code and phone number

• Dates of employment

• An estimate of the wages you earned, the federal income tax withheld, and when you worked for that employer during 2010. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.

3. File your return – You still must file your tax return or request an extension to file April 16, 2012, even if you do not receive your Form W-2. If you have not received your Form W-2 by the due date, and have completed steps 1 and 2, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible.  There may be a delay in any refund due while the information is verified.

4. File a Form 1040X – On occasion, you may receive your missing W-2 after you filed your return using Form 4852, and the information may be different from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return.

Gregory P. Williams

Restaurant CFO Partners

701 E. 15th Street

Suite 201

Plano, TX 75074

Tel: 972-633-8999

18 comments on “Restaurant 101: What to do if Your Employer Doesn’t Provide Paycheck Stubs

  1. Passed this info to a TJ’s employee who is in a similar situation with his former employer.

    Remember – a boss should be as accountable to paying you as they hold their customers to paying them.

    And if they can’t pay you this week lord knows they won’t be able to next week…

  2. Michael Cox? As in Taco Diner? Or is that a typo in the headline for the link? Shouldn’t it be Michael Costa?

  3. Hey Greg~

    What should a server do when another employee or other employees are transferring tips from themselves to you? This happened to me and several of my co-workers – the bartenders would transfer their tips to the servers making the servers income appear to be higher than it actually was?

  4. But how is the employee to estimate the taxes withheld if they have never received pay stubs? That seems to be the big question.

    Amy S is right – if you can’t get a pay stub, you should probably start looking for a new job. There are reasons why some companies don’t give you a pay stub, and NONE of them are good for you.

  5. Good info, Greg. I know Greg, he knows his stuff. Are you the restaurant police, no, you are a miserable foodwriter that does not know about food. Why don’t you try to write about food? As far as Costa, have you see the Office expansion plans for The Office…….lol, you have NO idea! As far as paystubs, half of most restaurant employees never look at their stubs.
    At the end of the year, everyone gets their stubs………..I have worked for many restaurants and those that do internally, are slower………there are many restaurants that do their own…….and many far more unethical. Birdlady, move on…you are taking heresay and trying to crucify a guy that is far beyond your ability. Where did you waitress, at the IHOP for Tiger Woods?
    Look at Hotels that all pool their tips, or a Robert Colombo Sfuzzi that steals ppls tips……he is just one of many…..

  6. Greg did say Feb 14th, correct? Yeah, thats what I thought……..4 months from now……..thanks Greg!

  7. To be a little more clear. The checks we did recieve were hand written. Not your typical typed, tracked, payroll kind, with stubs attatched.

  8. @ Rebross, as long as you keep a daily log of your actual tips and tipouts to bussers, the IRS will give you the benefit of doubt regardless (unless you are claiming under 8% of sales as grats). But you have to be diligent about it, every shift. And I would document those instances where tip transfers happen, date and amount.

    @Sammy – Mathematically it can be done. It depends on if you were getting your credit card tips via your check or on your check – each one would have its own calculation. Knowing your approximate gross tips and the number of hours you worked would also be important.

    @Yes he did – this is good, you can use the stubs to help. And he propably paid more to have those hand calculated than by using a frigging payroll service – except payroll services MAKE you pay the IRS your taxes each payroll – or they refuse to do your payroll.

    @Frank – IRS rules, Sugar, what is Greg supposed to do about it. They don’t even want to mess with it until they have to. And please don’t comment after drinking. You only make yourself look foolish.

  9. @ Sammy – sorry, meant to say it depends if you are getting your tipouts in cash or on your check.

  10. @restauant gal: Thankfully, I did keep records, but it took close to three years getting my income taxes figured out and I little help.

  11. @Rebross – @Restaurant Gal is correct about the recordkeeping. If there is a discrepancy between what the restaurant is reporting as your tips and what you are actually receiving, then that is another issue and should be brought up with the manager. I recommend that all tipped employees review each pay stub and make sure that their reported tips are correct.

  12. In my experience, servers and bartenders don’t typically care about their stubs so can not be blamed for thinking this was OK. Hopefully you all can go back and look at your bank deposits and from there at least break out your hours. Of course the tips depend on if you took home cash or not. He is required by law to file W-2′s with the IRS but yes, you would not have that information available to you until you go to file your taxes in 2012. I agree with the consensus – no matter WHERE you work – you are always entitled to a check stub or other record of pay. I only hope he paid the FICA and income tax that he withheld from your checks.

  13. @Restaurant Gal – You are making the assumption that waitstaff keep detailed records throughout the year. Is that common? If so, folks that wait tables are WAY more organized and diligent than I have ever been!

  14. @Sammy – It is one of the few defenses against the IRS if they ever challenge a waiter’s earnings. In fact the IRS even publishes a little book to write the info in, for free, for exactly this purpose.

    I know few do it, I was a server and never did it either. But I claimed ALL my tips because I had worked with the IRS in a previous job. Audits are NO FUN but they can go very quickly if the numbers all add up.

    And the employee is rarely out the withheld taxes if they can prove they were withheld. The government goes after the employer, even putting a lein on their personal property but gives employees full credit for their withholdings.