If you work in the service industry in San Diego, California, you rely on tips. Even for those that are paid a living wage, tips are still a huge part of your compensation. However, some employers try to deduct tips or wages from employees to cover the cost of skipped checks (tables that leave without paying their bills). Is this legal?
California tip laws
According to California Labor Code 351, tips are money that patrons leave for an employee over the amount due. Employers may not take any portion of the tip left for an employee by a patron. They cannot offset the employee’s wages based on that gratuity either, or mandate the sharing of tips with owners, managers, supervisors, etc.
Employer consequences
An employer who violates these laws can face a range of penalties, including criminal charges. According to California Labor Code 354, the charge is a misdemeanor that is punishable by either a $1,000 fine or jail up to 60 days, or both.
Employees have civil remedies too through both lawsuits and filing a complaint with the California Labor Commissioner’s Office. Both can order employers to pay back the tips to employees, in addition to other potential sanctions and monetary penalties.
California wage and hour laws
In addition to tip laws, California wage and hour laws protect employees from unlawful wage deductions. An employer may not deduct amounts from an employee’s wages due to a dishonored check or a table that walked without paying. The only exception possible is if the employer can prove that the dishonored or skipped check was caused by a dishonest or willful act, or by the employee’s gross negligence.
For example, if an employee intentionally lets a table leave, then the employer may have grounds to deduct tips or wages from that employee. However, if an employee was unaware that a table left without paying, then the employer cannot deduct tips or wages from that employee.
Can my boss take my tips or wages to pay for skipped checks?
The answer is, generally, no. Tips are the property of the employee who earns them, and employers are not allowed to take any portion of them for themselves or offset them against regular wages. The only exception is based on the employee’s dishonest or willful act, or gross negligence.