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Can my employer keep part of my tips?

On Behalf of | Dec 22, 2021 | Employee Rights

Many people who work in the service industry rely on tips to supplement their regular wages. A job well done can lead to a lucrative tip. Can employers keep part of these tips?

California law on tipping differs from federal law in some ways. The following is a brief overview of California tipping laws.

California law

California law states employers cannot keep any part of a tip given to an employee from a customer. It is also against the law for employers to deduct tips from the employee’s pay or using tips as a credit against the employee’s pay.

In California, employees must be paid at least the minimum wage. Tips are not considered part of an employee’s regular pay rate for overtime purposes. Tips are the sole property of the employee. However, tip pooling is allowed in California workplaces.

What is tip pooling?

Tip pooling is the collection of all tips to share equally between those who are in the “chain of service.” This means the employee played a role in the customer’s overall experience. However, owners, managers and supervisors cannot receive tips from a tip pool.

Tipping violations

If you believe your employer has violated state tipping laws, you have options for legal action and possibly compensation. One option is to file a wage claim with the Division of Labor Standards Enforcement. A Deputy Labor Commissioner will investigate your claim and will determine whether the claim should go to a conference, go to a hearing or be dismissed.

Another option is to file a lawsuit and name your employer as the defendant. However you decide to handle your employment law dispute, it is important to have a solid understanding of California tipping laws so you can make informed decisions in your case.

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