Can a county office of education reimburse employees for tips or gratuity?
Question: Can a county office of education reimburse employees for amounts of money they claim were paid for tips or gratuity? It has been our procedure, not policy, to not pay for tips, which are viewed as a gift of public money. It has been suggested that it might be OK to pay if the board were to adopt a policy. The school attorney told an employee that reimbursing tips was OK, but no rationale was given. Response: Thank you for your question regarding tips and whether they can be reimbursed to employees who pay tips when purchasing meals. Many county offices and school districts reimburse tips when reimbursing actual (not per diem) meal costs. One rationale used is that tips are not considered gratuities or gifts. Rather, they are considered compensation for services. This is consistent with IRS regulations that impute tip income to servers who report no tip income. Some jurisdictions even permit tip income to replace the minimum wage required to be paid to employees. IRS regulatio
