Worker’s Compensation and Income from Tips

• Feb 19, 2023
• Blog
• Michael Burgis & Associates, P.C

If you’ve been injured in California workers’ compensation, and you earn tips, you’re probably not getting what you deserve. In this video, attorney Michael Burgis discusses what is California workers’ compensation law, and how you can create concrete evidence of higher earnings, so you can get paid what you deserve.

If you were injured at work and would like to know the law, contact us for a free consultation (888) 287-4471

We’re here to help, and we bring “Recovery to the injured.”

Transcript:

Are you a waiter, a bartender, somebody that works in the hospitality industry, or just somebody that gets substantial earnings from tips? If you’ve been injured in California workers’ compensation, you’re probably not getting what you deserve.

Hi, my name is Michael Burgess, I’m the managing attorney of MB&A. I’m a certified legal specialist in California workers’ compensation and I’m a trial attorney.

California Workers’ Compensation Overview

Before I go into how these people aren’t getting paid accurately, let me first explain how earnings is very relevant and how important it is to your benefits.

First, you get temporary disability. You get two-thirds of your earnings while you’re off work. It’s very important to make sure to capture all that tip income so that you get paid accurately.

Additionally, permanent disability is based on your earnings as well, so your earnings, and showing accurate earnings, is unbelievably important to getting what you deserve.

Reported Income If You Get Cash Tips

Now, there’s a double-edged sword here, because most of these people that get cash tips don’t report this to the IRS. So, you run a potential risk of putting this evidence into the record if you didn’t report it to the IRS.

So first off, if you’re at trial, you can get evidence of increased earnings through testimony, co-worker testimony, documentary evidence, bank records, experts. However, you got to be prepared for the cross-examination asking, ‘did you report that to the IRS?’

Now, first off, taxes are very complicated and most lay people don’t even understand this. They hire tax professionals to do it. So if you’re at trial and you put on testimony that you make double your base salary and tips and then the defense attorney says, ‘Well, did you report this to the IRS?’ If that person testifies, ‘I don’t know, I pay my CPA or my tax guy to do this’, that’s a sufficient answer. Discovery is closed at trial. They don’t have evidence to show otherwise.

If the answer is, ‘I don’t know’, you should still win. However, here at MB&A, I don’t like to take risks like that and I want to make sure my clients are bulletproof. So what I do is, I do the analysis on how much money is underreported, how much they would get if that testimony was

into evidence and they were awarded it. Then I look at what their tax liabilities were if they did a

retroactive amended tax report and reported it.

If there’s a net savings, I have my client filing an amended tax return, I put that evidence in, and guess what? That tax return, the admitted tax return, absolutely concrete evidence of higher earnings. That is how you get paid what you deserve.

Help for Workers’ Compensation in California

If you have any questions or concerns… if you make substantial tips in the industry and you’ve been involved in an injury or an accident, give us a call we’re here to help