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.

In California, tips are the sole property of the employee for whom it is left. However, tip-pools that share all the tips with non-supervisory employees is acceptable ONLY if those receiving a share of an employee's tips provided direct service to the customer. As an example, a lawful tip-pool at a restaurant could be for waiters/waitresses, hostesses, and bus boys. However, this pool could not include cooks or dishwashers, as they did not provide any direct service to the patron. Owners, managers, and supervisors can NEVER share in the tip pool.

Employees are entitled to recover all tips unlawfully pooled or taken from them, and also may be entitled to recover penalties. If an employee complains to their employer about an unlawful tip-pooling policy and is in turn treated adversely, the employee may also have a separate claim for retaliation.

Employers cannot require employees to waive their rights to tips. As such, any documents that employees have signed wherein they agreed or consented to sharing a portion of their tips with management or other supervisors, as well as employees who do not provide a direct service to the patron, is invalid.

RELATED LINKS

Division of Labor Standards Enforcement (DLSE)