If you get a tip in California, can you keep it? Is your boss legally allowed to take your tip in California, or can you be required to share your tips with the whole serving staff? If you are working in the hospitality or restaurant industry in California, these are important questions to ask. Tips are the way a friendly face and a hard worker can get ahead of their baseline wages to meet their goals faster. Tips are that extra mood-lifting order of Chinese food, or paying off your student loans a little faster. If you are in a tipped position in California – or about to start one – it’s important to know what California tip & gratuity laws say regarding tipping and who keeps the money. Hint: it’s you.
California labor laws typically protect workers from being taken advantage of by their employers, and this is also true when it comes to laws regarding tips and gratuity payments to service staff.
Here at Southern California Attorneys, A.P.C., we know that making a living off minimum wage and tips is not easy, and it jeopordizes your ability to thrive financially if your tip rights are infringed upon. Here are the four things that every California service worker needs to know about tip and gratuity laws.
1. You Have the Right to Keep the Tips You Earn
According to California tip & gratuity laws, you have the right to claim and keep 100% of the tips that you earn, and your employer cannot interfere.
A tip is any payment left above the stated amount on the receipt. If a client hands you a stack of bills and says “keep the change” or doesn’t stick around for change, that’s a tip. If they hand you a specific amount of money or leave it on the table, that’s a tip, too. If they leave you a yogurt and a clean plastic spoon on the porch table when you make a delivery, that is also a tip – but you are not required to take it.
California law states that tips belong to the employee and that employers are not permitted to meddle. Your employer cannot withhold your tips or claim a portion of your tips for management or company purposes.
Employers also cannot tamper with your tips. Customers must be free to give their tips in size and target to the server they enjoyed. Employers cannot negotiate tips with customers and cannot step between customers and the person they wish to tip.
2. Your Tips Do Not Impact or Offset Your Wages – By California Tip & Gratuity Laws
In California, your tips are not a calculated part of your wages. In many states, it is common for tipped positions to include tip as part of your mandatory minimum wage payment. California law, however, defines tips as outside your wages. This means that an employer for service professionals must pay at least minimum wage for each hour worked, no matter how much or how little tips you may have collected.
As a service worker in California, you must be paid your full stated and contractual hourly wages, whether this is minimum wage or higher, and also freely collect any tips that are offered to you.
3. You Can Choose to Pool Tips – With Fair Rules
California service teams can choose to pool their tips and share them in a fair, even manner. Typically (and with legal precedent) the distribution of tip sharing in California is 80% to the wait staff, 15% to the table bussers, and 5% to the bartenders. However, the exact right balance and inclusion will depend on how your venue runs.
Tip pool shares are determined by the Chain of Service. For example, the bartenders don’t typically serve tables, but making drinks for tables is in the chain of service that can create a highly satisfied tip amount. However, there are two rules that California tip & gratuity laws set in place to protect employees. First, the workers must agree to share tips, and tips must only be shared with those who are in the chain of service. Second, managers cannot be included in tip sharing, even if they serve tables directly. This also includes owners and supervisors.
In venues with tip sharing, individual servers do not have the option to keep 100% of their table tips.
“The California Department of Labor Standards Enforcement, the agency that enforces wage and hour laws, has found the following distribution to be legal in a traditional restaurant setting: 80% to wait staff, 15% to bussers, and 5% to bartenders. However, whether a distribution is fair depends on the circumstances of each business and is decided on a case-by-case basis.”
4. Tip is Counted Before Payment Processing Fees
Did you know that you have a right to 100% of the tip that the customer meant to leave you? According to California tip & gratuity laws, if the customer writes $5.00 on the tip line of the receipt, you are due the whole $5, and not a penny less.
Why does this matter? In the era of credit card payments, there is usually a 3% processing fee for every payment. Typically, every dollar of revenue would be counted after that processing fee, but not tip. If your employers are holding back 3% of electronically paid tips, they are breaking the law. They are also breaking the law if the mobile app does not give the customer the option or clear choice to leave a tip – or if they mislead the customer into thinking the service fee is in lieu of tipping the staff.
Are you working for tips in the state of California? Know your rights. Employers often mismanage tips to intentionally reduce wages, take profits, or simply fail to understand California tip & gratuity laws. If your employer is interfering with tips, or if someone you know is having their tips taken from them, we can help. Here at Southern California Attorneys, A.P.C., we defend California worker rights from employers who would treat you with less than the respect you deserve!
You don’t have to hand over your tips or accept lower wages due to the tips you earn. Contact our aggressive, experienced wage & hour lawyers today to schedule a free consultation and learn more about how to defend your rights as a service worker in California.
