Tip & Gratuities

“Gratuities” include any tip, gratuity, money, or part thereof that has been paid or given to or left for an employee by a patron of a business over and above the actual amount due the business for services rendered or for goods, food, drink, or articles sold or served to the patron.  (Labor Code § 350(e)  Employers are prohibited from using tips as a credit against wages owed by the employer.  Tips are the sole property of the employee or employees to whom they are given or for whom they are left.

An employer that permits patrons to pay gratuities by credit card shall pay the employee the full amount of the gratuity that the patron indicated on the credit card slip, without any deduction for any credit card payment processing fees or costs that may be charged to the employer by the credit card company.  Payment of gratuities made by patrons using credit cards shall be made to the employee no later than the next regular payday following the date the patron authorized the credit card payment. (Labor Code § 351)

Although employees may voluntarily agree among themselves to pool or share their tips, an employer may requiring tip pooling only under certain limited circumstances.  (Leighton v. Old Heidelberg, Ltd., 213 Cal.App.3d 1062 (1990)

Similar Posts

  • Uniforms & Tools

    The term “uniform” includes wearing apparel and accessories of distinctive design or color.  Ordinary work clothes are not considered uniforms when the employees have free choice of what to wear. When the employer specifies the design or color or requires that an insignia be affixed, it is considered a uniform. An employer who requires uniforms…

  • Reduce Your Risk of a Sexual Harassment Lawsuit

    Managing the risk of a sexual harassment lawsuit requires employers to take specific measures to help prevent sexual harassment before it occurs.  These measures can be summarized as three part process: (1)  establishing a sexual harassment policy; (2) implementing procedures to enforce the policy and (3) enforcing the policy through those procedures. Employers begin by issuing…

  • Employee Leaves of Absence

    Pregnancy Disability Leave Employers who employ five or more people must provide four months of pregnancy disability leave for any employee who is disabled by pregnancy and/or pregnancy-related condition per pregnancy. In addition to pregnancy disability leave, the birth of a child also may qualify the employee for an additional twelve week leave of absence…

  • Itemized Wage Statements

    Each time that wages are paid, a California employee must the employee with an itemized statement that shows the following nine pieces of information: 1.              Gross wages earned, 2.              Total hours worked (unless the employee is exempt from overtime requirements), 3.              If the employee is paid on piece rate basis, the number of piece rate…

  • Pay Days

    Wages must be paid according to a regularly set schedule. (Labor Code § 207)  When employees work overtime during a pay period, the payment of the overtime wages may be delayed to the next regular payday. (Labor Code § 204)  All earned wages must be paid at least twice a month, on days designated in…