Restaurants prepare to pick up the tab for employee tips starting Jan. 1

Ringing in the New Year on a bit of sour note, restaurants and hotels will have to start picking up the tab for employee tips thanks to a new rule enforced by the Internal Revenue Service. Effective Jan. 1, the IRS will classify automatic gratuities as service charges that are taxable as regular wages and subject to payroll tax withholding. That means that 18 percent automatic gratuity charge added to your bill at the Olive Garden for your party of six could be a thing of the past, as restaurants… Reported by bizjournals 17 hours ago.