I learned this morning that there may be serious fraud going on at the Waste Management Open here in Phoenix. I mentioned to a valet at dinner that I hadn’t seen him all week and asked if he was okay. He replied that he had been working at the Golf Tournament. I said “you must get good tips for that.”

His reply stunned me: “No we have to turn in the tips and we just get the usual $7.50 an hour and a guaranteed $6.00 in tips. If true, this is hugely wrong. If it isn’t illegal  it should be.

It gets worse. According to this young man the company keeps the rest of the money. Let me do a little math. Say there is a team of five valets and they can park 60 cars an hour. If the average car tips $2.00 (and that is low) they generate $120.00 per hour and it costs $30 ($6.00x5people). What happens to the $90.oo? Oh, and by the way it is all cash. If 5000 cars valet park it is $30,000 over four days.

It is fraudulent in at least two ways. It violates the intent, if not the facts, of the labor laws, which allow a lower minimum wage for jobs where tips are expected but anticipate that the worker gets the tips. And it violates the faith of the public who, having paid for valet parking, are giving a tip to a person who got their car. That the money ends up as cash in a corporate entities till is a violation of that faith. It is not clear who the surplus goes to. It could be the valet company. It could be Waste Management. It could be another entity all together.

If this story is true, so far it is credible but unverified, it the kind of thing that gives capitalism a bad name.