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Can my employer keep my tips?

by | Oct 6, 2020 | Firm News

People who work in the service industry in central and northern California often rely on tips from customers to supplement their wages. However, sometimes employers unlawfully try to keep tips given to employees. The following is a brief overview of tipping laws in California.

What is considered a tip?

Tips, referred to as “gratuity” under California law, include money given to an employee by a customer of the business the employee works for. Tips are an amount of money that goes above the actual amount of what the customer paid for the services of the employees or for the goods, food, drinks or items sold or served to the customer. It is important to note that to be considered a tip, the payment must be voluntary. All or part of mandatory service charges can be distributed to employees at the discretion of the employer as a bonus.

Labor Code Section 351

Under Labor Code Section 351, employers are prohibited from sharing in or keeping an employee’s tips. In addition, employers cannot deduct tips from an employee’s wages or otherwise use tips as direct or indirect credits against an employee’s pay. Employers in California cannot use tips as a reason for paying an employee less than the minimum wage.

Under California law, tips are the sole property of the employee that was given them. If a tip was paid using a credit card, it must be given in full to the employee by the employee’s next payday. It is important to note that involuntary tip pooling is lawful, as long as the tips go to the employees not the employers.

Filing wage claims

If you feel that your employer is wrongfully keeping your tips, you can file a wage claim with the California Division of Labor Standards Enforcement (DLSE). Filing a lawsuit against your employer may be another option to consider. In either case, it can help to seek legal assistance, so you can understand your rights and options moving forward.