Appeal from the Order of the Department of Labor and Industry in case of In the Matter of Golfview Manor, Inc., No. 20-6172.
R. Scott Shearer, with him Peter J. Ressler, Shearer, Mette & Woodside, for petitioner.
Robert E. Chernicoff, with him Stephen B. Lipson and Herbert W. Hoffman, Assistant Attorneys General, for respondent.
Judges Crumlish, Jr., Mencer and Craig, sitting as a panel of three. Opinion by Judge Crumlish, Jr. President Judge Bowman did not participate in the decision in this case.
[ 51 Pa. Commw. Page 324]
This is an appeal by Golfview Manor from the Office of Employment Security's*fn1 determination and assessment of unemployment compensation contributions for the use of the Unemployment Compensation Fund.*fn2 We affirm.
[ 51 Pa. Commw. Page 325]
Golfview Manor owns and operates 19 restaurants and utilizes a number of waitresses who are paid an hourly wage equal to one-half the minimum wage. Tips and gratuities are paid directly to the employees by customers, and retained by them. Though the employee's manual distributed to new workers instructs tipped employees to report monthly tips over $20.00 on the back of their time cards, none adhere to the procedure. However, Golfview Manor does report employees' tip income to the Federal Government in an amount corresponding to the difference between the hourly wage actually paid (one-half of minimum wage, and the required minimum wage). Thus, the relevant, partial accounting of the tips in question was reported on Federal Forms 941 and the W-2 issued to Golfview Manor employees.
The Office of Employment Security thereafter issued its Notice of Assessment, dated May 23, 1978, to Golfview Manor for failing to include these tips used for the purpose of meeting minimum wage requirements in their quarterly contribution reports.*fn3 After an Examiner's Hearing on Golfview Manor's Reassessment Petition, a denial was ordered by the Pennsylvania Department of Labor and Industry:*fn4 "Tip income computed in qualifying Golfview Manor, Inc., the Petitioner, to meet Federal minimum wage standards shall also be included as wages within the definition of that term for purposes of an employer's contribution and an employee's benefits under the Pennsylvania Unemployment Compensation Law."
[ 51 Pa. Commw. Page 326]
The present controversy turns upon a reading, interpretation, and application of Section 4(x)(6), 43 P.S. § 753(x)(6), of the Pennsylvania Unemployment Compensation Law:
(x) 'Wages' means all remuneration . . . paid by an employer to an individual with respect to his employment except that the term 'wages for the purpose of paying contributions shall not include:
(6) Notwithstanding any other provisions of this subsection, wages shall include all remuneration for services with respect to which a tax is required to be paid under any Federal law imposing a tax against which credit may be taken for contributions to be paid into a state unemployment fund or which as a condition for full tax credit against the tax imposed by ...