Watkins & Letofsky, LLP | A Full Service Civil Litigation Law Firm

Call for a Free Consultation

A Full Service Law Firm
  1. Home
  2.  – 
  3. Firm News
  4.  – California laws on the distribution of tips

California laws on the distribution of tips

by | May 15, 2019 | Firm News |

For many employees in California, tipping is how they make most of their money. Tipping has come under a lot of scrutiny in recent years, so much so that some restaurants have done away with it entirely. One Los Angeles restaurant did precisely this by simply increasing the price of food.

For now, tipping is still the common way restaurants operate. It is vital for employees to receive all the tips they have earned over the course of a shift, so workers and employers alike should understand how this payment should work. Any violation of California law should come to the attention of the employer immediately. In some cases, litigation may be necessary.

The employer cannot take any of the tips

California law makes it clear tips are not for the employer. If a manager insists the servers share their tips with him or her, that is a direct violation of the law. Additionally, state law requires employers to pay workers the minimum wage. All tips go on top of what they earn hourly. This is in direct contrast to other states where employees make less than minimum wage because tips make up the rest.

The law allows for tip pooling

Many restaurants have required workers to pool their tips together. This money then becomes distributed amongst all employees, including bartenders and hosts. In general, cooks and dishwashers cannot partake in the tip pool because they do not directly interact with the customers. Managers, even if they provide table service, cannot take tips even within a pool.

Employers cannot take credit card charges out of a tip

Many people leave a tip on their credit card. Although the restaurant may need to pay a small fee for each credit card transaction, that fee cannot come out of the worker’s tip. The employees must receive their tips by the next payday.