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A few tips on your tips

On Behalf of | May 28, 2020 | Employment Law

In California, any tips you receive from a customer or patron are yours to keep. Unlike in other states, employers cannot deduct your tips as a credit against the minimum wage. Tips are fully your property, although you may be required to share the tips with other front-of-the-house employees who served the same customer.

Your tips are your own. California law defines a tip or gratuity as any money that is paid, given to or left to the employee by a patron of the business that is over and above the actual amount due for the goods and services sold. Tips belong to the employee, not the employer.

Here is a quick Q&A about tips:

When do I receive tips paid by credit card? No later than your next regular payday.

Can an employer deduct credit card processing fees from my tips? Not according to the California Department of industrial Relations. Under the California Labor Code, employers are required to pay the full amount of any tip paid by credit card.

Should my tip income be considered when calculating overtime? No, unlike in many other states. This is because tips are considered a voluntary gift from the customer, not part of your wages. Therefore, when you are entitled to 1-1/2 times your regular rate of pay as an overtime premium, only non-tip wages should be considered. However, be aware that a mandatory service charges are different from tips and could be considered if offered regularly.

What can I do if my employer is subtracting my tips from my wages? Federal law allows this, but California law does not. If you work in California and an employer is using your tips as a credit on your minimum wage, you are being underpaid. You can either file a wage claim with the Division of Labor Standards Enforcement or file a lawsuit. If you no longer work for that employer, you can also make a claim for a waiting time penalty.

Can my employer retaliate if I make a wage claim? Not legally, but it does happen. If your employer takes any adverse job action against you after you make a wage claim or file a lawsuit, you have a separate claim to bring before the Division of Labor Standards Enforcement or as a private lawsuit.

If you have questions about whether your tips are being paid properly, contact an experienced employment and labor law attorney.

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