Should the employer deduct credit card processing fees from my tips?
Any credit card charges (processing fee) are considered as the employer’s responsibility. It’s also the responsibility of the employer to keep all the record of the tips you receive. Violation of this law is considered a misdemeanor. If your employer has been crediting the tips against your wages, you’re being underpaid.

Is tip pooling legal?
Yes. Tip pooling refers to the collection of all the tips from employees and then splitting them according to the agreed percentages. In California, this is considered legal so long as the previously agreed conditions are met. A general rule of thumb is that the tips included in the pool should be given to the employees only. Supervisors and managers should not share in the tip of the pool. The law also requires that the servers should get the lion’s share with a smaller portion going to busboys and bartenders.

What are the legal consequences of the violations?
Employees who don’t receive their tips are required by law to bring to their employer’s attention their outstanding tips and gratuities. Any employer who violates the California Laws on dispersing tips and gratuities is considered to have committed a misdemeanor. Therefore, you should file a claim at the labor commissioner’s office to recover any wages or tips that are being illegally withheld. Alternatively, you can seek the services of UELG (united employee law group) to file a lawsuit against your employer. And the best part is that an employee cannot be punished for exercising these rights.

Photo Credit: Shutterstock/maradon-333

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A tip refers to money voluntarily left by a satisfied customer for an employee for the goods or services rendered. Under California law, employees are entitled to keep their tips and gratuities left by customers. And because tips are not technically a wage, the employer cannot take any part of the tip. Additionally, they should not be included when calculating the employee’s hourly rate. It’s also worth noting that the employee cannot be forced to share the tips with managers, supervisors or other employees. Here are a few rules you should know about California Laws on
dispersing tips and gratuities.

Are tips used to calculate overtime and regular rate of pay?

Tips are not part of an employee wage and should not be included in the calculation of the regular rate of pay. According to California labor laws, they must be paid immediately as they are received without any interference from the employer. And if the customer pays the tip via credit card, the employee is entitled to it on the next regular payday the credit card payment is authorized. Because the law is committed to upholding labor laws, the employee must receive the minimum wage regardless of the tips received.

Should the employer deduct credit card processing fees from my tips?

Any credit card charges (processing fee) are considered as the employer’s responsibility. It’s also the responsibility of the employer to keep all the record of the tips you receive. Violation of this law is considered a misdemeanor. If your employer has been crediting the tips against your wages, you’re being underpaid.

Is tip pooling legal?

Yes. Tip pooling refers to the collection of all the tips from employees and then splitting them according to the agreed percentages. In California, this is considered legal so long as the previously agreed conditions are met. A general rule of thumb is that the tips included in the pool should be given to the employees only. Supervisors and managers should not share in the tip of the pool. The law also requires that the servers should get the lion’s share with a smaller portion going to busboys and bartenders.

What are the legal consequences of the violations?

Employees who don’t receive their tips are required by law to bring to their employer’s attention their outstanding tips and gratuities. Any employer who violates the California Laws on dispersing tips and gratuities is considered to have committed a misdemeanor. Therefore, you should file a claim at the labor commissioner’s office to recover any wages or tips that are being illegally withheld. Alternatively, you can seek the services of UELG (united employee law group) to file a lawsuit against your employer. And the best part is that an employee cannot be punished for exercising these rights.

Photo Credit: Shutterstock/maradon-333

The post California’s Laws for Dispersing Tips and Gratuities appeared first on UELG.

Many workers in California including those who carry luggage, sever and mix drinks, clean hotel rooms among any others earn tips. In fact, some workers earn more money from tips than what they get from their monthly salary. If you are working in a job where you earn tips, then it is crucial to understand your legal rights particularly under hour’s law and wage. In this article, we are going to discuss California’s legal policies regarding the dispersal of tips and gratuities to employees.

What is a tip?

A tip is money that has either been given, paid or left for an employee that is above the actual amount of service rendered or products bought by the patron because the patron is impressed with the quality of service rendered.

What really counts as a tip?

For any amount of money to count as a tip (as opposed to a service charge), it must be:

• Entirely voluntary.
• The customer must have the full right to determine the amount to give.
• The amount should not be subject to negotiation or set by an employer’s policy.
• The customer must have the full right to determine the person who should receive the payment.

Basics of Tips

It is very important to note that the tips only belong to the employee. The Californian law is very protective to the employee and clearly states that the tip belongs to the employee. This means that employers have no right to take part of the tip that the employee has been given by the patron. Either the manager, supervisor or the owner of the business cannot force you to share the tip.

California’s laws also states that the employer is not supposed to count your tips then pay you a minimum wage that is less that amount. Some employers in other states deduct the amount paid from tip as along at the amount earned from tips make up the difference. This concept is known as “tip credit.” However, California law does not allow employers to do this. Employers are supposed to pay employees the minimum wage and not use tips to make up the difference.

What is tip pooling?

The California law also does not allow tip pooling. Tip pooling is a concept where an employer may compel employers to pool their tips together then have them distributed to employees in a pool. If the employer wants to create a pool, then there are certain guideline that needs to be followed. The first guideline that the employer needs to follow is if the employees are in a chain of service that enables them to receive tip from a particular customer. For instance, bartenders, hosts and servers are usually considered to be in the same chain of service while dishwasher, cashiers and cooks are not. In addition to that, the employer must ensure that tip is distributed fairly and equally depending on the quality and amount of service that the employee has rendered to the customer.

The post An Employee’s Guide to Receiving Tips appeared first on UELG.

What are tips and gratuities?

Tips and gratuities essentially mean the same thing. In their basic definition, they are used to refer to money voluntarily left for an employee of a business that is more than exceeds the set amount owed for the sale of goods and services.

Gratuities and tips are given as a reward for excellent services and ranges from few cents to the large amount that customers are willing to give. The tradition of giving tips is an accepted practice that has been there for quite long.

How does California law protect tipped employees?

The California law and courts have for long acknowledged that for a customer voluntarily leaving behind tips is a reward for the service provided and thus employers have no right to withhold the amounts due whatsoever.

Under the Californian labor laws, code 351 prohibits employers or their agents from withholding or keeping any tip or gratuity willingly given to an employee. The laws go ahead to state that tips and gratuities are sole properties of the employee or employees and in the regard, none has the right to withhold them back whatever the reason.

Tips and gratuities are very common in the hospitality industry if you work in this industry the California law protects your interest in regard to tips and gratuities. For instance, the law does not allow a tip credit. Section of 351 of the labor code expressly prohibits employers from crediting any tip or gratuity against the wages due for an employee.

As stated before, the law defines tips and gratuities as sole properties of an employee or employees, so for all employers covered under this law are required to pay tipped employees their full wages regardless of the amount they earn from tips. Any employee who credits tips and gratuities to meet the minimum wage requirements are violating the law and as an employee, you need to take action against such violations.

The law also allows employees covered under this law to impose a mandatory tip/gratuity policy. According to Californian labor laws, a tip left behind by a customer belongs to all employees who directly make contributions to the delivery of service to the customer(s).

Additional Information

The employees can also, for instance, agree among themselves to share or pool tips or come up with any policy regarding the tips since they belong to all the employees. The law, however, exempts floor managers in charge of firing and hiring of employees from partaking in any tip and gratuity policing.

The post Employee Rights: Collecting Tips appeared first on UELG.

However, when the customer pays his or her bills with a credit card and the payment includes tips, it is expected that the employee pay you the full amount not later than your next regular pay after the day the credit card payment was authorized. If you think your employer is withholding your tips, deducting credit processing fee from the tip, or considering it as part of the regular rate of pay for overtime calculation, then you might need an attorney to represent you.

Current rules for credit card processing fees in California

In California, employees are protected by labor sections 350 through 356. The Labor Code section 351 prohibits the employer from deducting any fee from the tip or credits our time against the money they owe you. They are required to pay the full amount paid on the credit card. No deductions are to be made; you are entitled to the full payment.

Tips are not part of the wage

Under California law, tips and gratuities are not technically, part of wage paid by the employer and therefore are not considered part of your regular rate of pay when calculating overtime. Unlike other federal laws, California law requires that an employee pay the overtime based on the regular rate of remuneration.

Mandatory service charges are not treated as tips

Some employee mistakes mandatory service charge with tips of gratuities. Tips are voluntary amount left by a patron, but mandatory service charge is the amount required from the patron based on the contractual agreement listed on the menu of an establishment. These service charges legally belong to the employer who distributes them to the employee at their discretion.

Important rules for tips and gratuities to note in California

In most states, an amount is deducted from the tip as a processing fee, but in California, the employer should not deduct any amount.

Tip Pooling

Tip pooling under California labor law is considered to be legal so long as certain conditions are set. Basically, tip pooling is gathering tips earned by several employees and splitting them up in previously agreed percentage. However, this practice has to be participated by employees and not the employer.

California laws also prohibit tip credits, therefore, any employment contract allowing it is illegal. To recover money held by the employer, you need to file a claim with California Division of Labor Standard enforcement for an investigation to take place or file a conversion lawsuit.

In most cases, it is critical to act fast depending on the claim you intend to pursue.

The post Tips and Gratuities Under California Labor Law appeared first on UELG.

Tips and gratuities are an area of wages in that can become confusing for employers, employees, and the legal assistance who settle their disputes. We have put together a few frequently asked questions that we hear about restaurant tips and gratuities on a daily basis that will be helpful in deciding if a situation is legitimate or illegal.

Q: Does my employer have any rights to my tips? 

A: No, any money you get in the form of a tip is entirely yours and your employer has no say over it.

Q: Can I be required to share my tips with my fellow employees by my employer? For example, the bartender or the busboy. 

A: Yes. As long as they took part in the same service as you did, then your employer has a right to ask you to share your tip since the law allows for involuntary tip pooling.

Q: How soon can I receive my tip from my employer if it is included in a credit card? 

A: Your employer is required to add all your credited tips on to your pay check on the next immediate pay day, or in cash that evening or the next day.

Q: What qualifies as a tip?

A: Any money that has been left to the employee by a customer apart from the amount which is due for the goods or services that have been rendered. Tips only belong to the employee to the exclusion of the employer.

Q: Is it legal for my employer to deduct credit card processing fees from my tips? 

A: No. if the credit card company charges the employer any credit card processing fees, the gratuities paid to the employee cannot be deducted to cater for those costs. The full amount shown on the credit card should be paid to the employee.

Q: What should I do if my employer does not comply with the law in matters concerning the tips I receive? 

A: There are two options. You can either take it up with the Division of Labor Standards Enforcement by filing a claim against your employer or file a law suit in court.

Q: What should I do when my employer retaliates for going against his abuse of my tips? 

A: If your employer discriminates against you in any way for objecting to his abuse of your tips, you should either file a lawsuit in court or file a complaint about retaliation/discrimination against your employer with the labor commissioner’s office.

Photo Credit: Shutterstock/Billion Photos

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