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.

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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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