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Wynn
dealers sue over tip policy
Lawmakers announce resolution of separate dispute over
tips
By HOWARD STUTZ and
TONY BATT
REVIEW-JOURNAL
Sep. 22, 2006
Copyright © Las Vegas Review-Journal
While a tip matter involving Nevada casino workers may
have been resolved in Washington, D.C., the controversy
over Wynn Las Vegas splitting the tokes earned by its
dealers with casino supervisors has landed in Clark County
District Court.
Two Wynn Las Vegas dealers filed a class action lawsuit to
end the casino's 3-week-old tip-pooling program.
Meanwhile, in Washington D.C., the Internal Revenue
Service will no longer audit Nevada casino workers for tip
income and will reimburse workers who should not have paid
taxes on tips, lawmakers and gambling lobbyists say.
Daniel Baldonado and Joseph Cesarz, two Wynn Las Vegas
dealers, believe the Wynn policy violates Nevada state law
covering tip pooling because employers are sharing in the
tips, a District Court filing shows.
The dealers said they filed the lawsuit on behalf of more
than 500 dealers affected by the new program.
Wynn Las Vegas on Sept. 1 began allowing table game
supervisors to share in the tips earned by dealers. Wynn
executives said the move was done to correct the widening
disparity between the wages earned by dealers and casino
floor supervisors.
The program was part of a table-games division
restructuring announced Aug. 21 in a meeting with dealers
and supervisors.
Wynn Las Vegas executives have said the casino's dealers
were earning about $100,000 annually in salary and tips.
The new tip-pooling policy would mean an average pay
reduction of about 20 percent.
Table game supervisors were given a boost in salary and
were allowed a percentage of the tips to bring their
compensation up to what dealers were earning. The casino
also instituted a bonus program for dealers.
According to the lawsuit, the two dealers are seeking the
wages they lost because of the tip pooling and they want
the program stopped.
"(Wynn Las Vegas) breached ... contracts of employment by
unilaterally, illegally, and without cause, withholding
certain portions of the ... casino dealers' tip pool and
paying such portions to other persons who were not casino
dealers and were not entitled to such payments," the
lawsuit said.
An attorney representing the dealers was unavailable for
comment. Wynn Las Vegas President Andrew Pascal was
unavailable.
The dealers' lawsuit was filed Sept. 13, the same day
Nevada Labor Commissioner Michael Tanchek rejected the
complaints of more than 100 dealers about the tip pooling
program. Tanchek said he didn't believe the casino was
violating state law.
Tanchek said the state's Department of Business and
Industry will continue to look at Wynn Las Vegas' new
policy and investigate any new complaints.
In Washington, IRS Commissioner Mark Everson agreed to
halt the audits after meeting Wednesday with Sens. John
Ensign, R-Nev., and Harry Reid, D-Nev., in Reid's office.
The senators requested the meeting after workers and labor
officials complained the IRS was reneging on a 2003
agreement that expires this year.
Under the agreement, casino employees report their tip
income to casinos, which then relay the information to the
IRS. In return, the IRS agrees not to audit tax returns of
about 200,000 workers in 185 casinos.
Despite the agreement, the IRS insisted it still had legal
authority to conduct audits of some casino workers.
But Everson told Ensign and Reid the audits would stop,
the senators said.
"(Everson) also agreed that people who paid ... wrongly
... would get their money back forthwith," Reid said.
Theresa Branscome, an IRS spokeswoman in Washington,
declined to comment.
Ensign said: "It turned out the IRS made a technical
mistake in the way the agreement was being implemented. We
held up (Everson's confirmation as IRS commissioner by the
Senate) three years ago to get this agreement, and he
remembered it very well."
Ensign said he did not know how much money casino workers
had paid the IRS after being audited.
If Everson had not agreed to end the audits and return
money that should not have been paid, Ensign said,
negotiations for a new tip tax reporting agreement by the
end of this year might have become difficult.
"Having been raised in Las Vegas and coming from a family
of tip earners, I've never been a great fan of the IRS and
I wasn't surprised they interpreted the agreement in a way
that was very anti-Nevada and anti-worker," said Rep.
Shelley Berkley, D-Nev.
"But what could have been a very bad situation turned out
to be a home run for us," Berkley said.
The American Gaming Association, which represents at least
80 percent of Nevada's casino industry, will help
negotiate a new tip tax reporting agreement with the IRS.
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