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and Tony Batt
LAS VEGAS -- 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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