Of course it's illegal to steal tips, but actually enforcing that is another matter. Companies will blatantly build illegal business models. And of course some developer coded this automated tip stealing.
This is why I support unions... when you have strength in numbers, you can have an ethical code that can be followed.
Firing one guy because he won't steal from your customers won't fly if the union tells your entire development team to walk and they'll cover wages until they get a better job.
Might fit under fraud. I hope it does. When I first learned of this tactic, I felt tricked. I assumed with a tip, that I was boosting someone’s salary for a job well done. I’m sure it’s debatable, and that my assumption was wrong? But I imagine most people feel this what a tip is.
Fraud
n. the intentional use of deceit, a trick or some dishonest means to deprive another of his/her/its money, property or a legal right.
It's absolutely defrauding the customer, in addition to whatever laws there might be specifically about wages. They're asking you for money with a description of what the money is for that is between misleading and an outright lie. That's fraud.
