Ristorante a Mano – Federal Court of Appeal finds that net tips on restaurant credit card sales distributed to the servers were pensionable wages and insurable earnings for CPP/EI purposes
The appellant, which operated a restaurant, paid “due-backs” to its servers representing the tips on sales processed on credit and debit cards (“electronic tips”) minus deductions made by it as a processing charge and amounts to be paid to kitchen staff, and further deductions based on the amount of cash sales collected by the servers. Monaghan JA indicated that the question of whether a due-back constituted pensionable wages and insurable earnings for CPP and EI purposes turned on the question whether the amount “is paid by the employer to the employee in respect of their employment.”
The due-backs were amounts in respect of the servers’ employment:
But for their employment with the appellant, the servers would not have received the due-backs from the appellant.
Furthermore, the due-backs were paid by the appellant to the servers:
[T]here is no dispute the electronic tips came into possession of the appellant or that the appellant transferred the due-back, representing a portion of those electronic tips, to the servers.