Orange County Employment Lawyer Blog

Lately, my Orange County Law Firm has been receiving calls questioning this issue. The answer is No. Your employer may not pass any costs associated with doing business on to you. You are entitled to receive the full amount of any tip left by patrons paying with credit cards without any deductions for such processing fees. Your employer is also required to keep accurate records of any such transactions. Failing to do so, could place the burden on the employer to prove that your estimates of the tips due are not accurate. Note: credit card tips must be calculated and paid to you by the next regular business day.

In California, as a matter of law tips cannot be used as an offset against your employer's obligation to pay your hourly wage rate. Your hourly wage rate must always be at least the minimum wage for the state of California. Any agreement to the contrary would be considered void and you would be entitled to the difference between the applicable hourly rate and the lesser rate you actually received as a result of such a tip credit.

My Orange County Employment Law Firm has recently handled two rental offset cases, one in Orange County and one in Los Angeles County. Generally, rent may not be credited against minimum wage without a voluntary written agreement between the employee and the employer. Both clients were property managers, one at a Hotel and the other at a large apartment complex. They earned low hourly wages, and had their rent offset from their wages. This is legal, however, there are strict guidelines as to what the employer can deduct as a rental credit.

Regardless if there is a written agreement or not, the amount of the rental credit must not be more than the following: (1) $37.63 per week for rooms occupied alone; (2) $31.06 per week for shared rooms; (3) Two-thirds of the ordinary rental value but never more than $451.89 per month for apartments; (4) Where a couple are both employed by the employer, two-thirds of the ordinary value but never more than $668.46 per month. (All listed amounts effective as of January 1, 2008.)

Any employer who has failed to abide by these limitations or who has otherwise failed to implement a voluntary written agreement as required, may be liable to the affected employee for not only the amount of wages unpaid as a result of the unlawful offset, but also for penalties, interest, and reimbursement of reasonable attorney fees and costs.

RELATED RESOURCES

Industrial Welfare Commission Wage Order 5-2001, 10(c)