What is required by law regarding tips earned by associates?

Claiming 100% of tips earned is mandated by law because it ensures all income is reported correctly for tax purposes. This approach aligns with the Internal Revenue Service (IRS) regulations, which require employees to report all income received, including tips, regardless of the amount. Proper reporting helps maintain transparency and compliance with tax laws, preventing potential legal issues for both employees and employers.

Other options, such as limiting reports to certain amounts or types of tips, contradict this requirement. For example, an option suggesting only to report tips over a specific amount would lead to underreporting income and can result in penalties and legal consequences. Similarly, the notion that tips should be shared equally among staff does not factor into the legal obligation for individuals to report their earnings; it pertains more to company policy rather than legal requirements. Lastly, restricting reports to only cash received does not reflect the complete income picture, as tips can also come through credit card transactions or other non-cash methods. Thus, the obligation to claim 100% of tips earned ensures accurate reporting in line with legal standards.