Restaurant servers, hair stylists, cab drivers and others in the service industry in California rely on tips from customers to supplement their wages. However, sometimes an employer tries to retain or otherwise stop a worker from keeping the tips they earned through their dedicated efforts. The following is a brief overview of tipping laws in California.
What constitutes a tip?
Tips under California law is any money a patron leaves for an employee that goes above the amount owed for the goods sold or services performed. Tips are referred to as “gratuity” under the California Labor Code.
Labor Code Section 351
Under Labor Code Section 351, employers cannot share in or keep tips left to an employee by a patron. In addition, employers are prohibited from deducting wages based on tips earned or use tips as credits against a worker’s wages. If a tip is left using a credit card, workers must be paid this amount by the next regular pay date.
While involuntary tip pooling is permitted, it is illegal to pool tips to compensate owners or supervisors of businesses. In addition, any tip pooling policies must be fair and reasonable.
With regards to overtime, because tips are not considered part of a worker’s regular rate of pay, tips are not counted when it comes to calculating overtime payment. In addition, unlike federal regulations, in California employers are prohibited from using tips as a credit towards paying the minimum wage.
Seek assistance if you feel your employer is violating tipping laws
When an employer violates tipping laws, workers may need to take action to address the issue. Sometimes filing a wage and hour claim is necessary to recover what is owed. Employment law attorneys in the San Diego area can provide legal advice on tipping, which this post does not provide.