Vincent W Davis

Employee Tips / Tip Pooling

California Laws Regarding Employee Tips & Tip Pooling

If an employee receive tips, do they have to share them with their employer or supervisor?

employee tip law in California - Tip PoolingUnder California tipping laws, employers are not allowed to share in tips or tip pools of their employees. This often flies in the face of traditional culture where the owners of restaurants or bars have been know to take a percentage (or “cut”) out of their worker’s tips. Though this may be commonplace it is strictly prohibited under the law. As in most all other wage and hours cases, an employee can recover their attorney’s fees in an action to recover tips that are owed them – therefore often you can use the power of the law and the courts at no cost in the recovery of your actual earnings.

What are Tips and when can an employee expect to receive them?

A “Tip” is money that a customer will leave for one or more employees over the amount due for the food, goods, or services sold or rendered. By this very definition, Tips belong to the employee(s) who catered to or served the customer — not to the employer. In modern day workplace transactions, a significant number of customers will add a tip to their credit card transaction and not immediately accessible to the employee. By law, when a customer tips an employee using a credit card, the employer must forward that tip (pay the employee their tip) no later than the next regular payday following the date where the customer paid using their credit card. .

While yes, credit card transaction fees are charged to the establishment, and some states will allow the employer to subtract a proportionate amount of the designated tip to cover its credit card processing expenses, under California tip pooling laws, employers must absorb those credit card processing fees and pay to the employee the full face value of the tips specified by the customer.

Can I be forced to share my tips?

Under California tipping laws, employers cannot share in tips or tip pools of their employees.Generally speaking “yes.” If you join an establishment that has a tip pooling policy or one that collectively agrees to switch to a tip pooling policy, you can choose to go along, nor quit and find employment elsewhere. Employers are allowed to require employees to pool their tips so that a tip for one employee is shared among all the employees that work for those customers where the tip originates. This practice is known as “involuntary tip pooling.”

A common example of involuntary tip pooling is when a waiter receives a tip for a specific table yet the busboy who prepares and cleans that table, and the hostess who sat and brought initial drinks and menus to that table receive a portion of the tip. Even if a manager, supervisor, or owner participates in serving the customer who tipped the waiter, they are not eligible to receive part of the tip. In the restaurant industry in California, the persons who are most typically eligible to share in tip pools are persons who provide “direct table service.” This would include waitstaff, hosts, busboys, and even bartenders. A chef who prepares food directly at the table of a customer (think Benihana) would be able to participate in the tip pool, while chefs who remain in the kitchen would not: nor would kitchen-based cooks, dishwashers, etc.

Employees who receive tips are from many service sectors beside food service

In addition to waiters, waitresses, hosts, and bartenders, there are other service industries that receive tips including:

  • Maitre d’
  • Disc Jockeys
  • Musicians and Singers
  • Parking valet
  • Bellhop / porter
  • Doormen
  • Elevator attendants
  • Restroom attendants
  • Concierge
  • Pizza delivery
  • Home delivery
  • Cleaning staff
  • Counter persons
  • Gardeners
  • Caddies
  • Dog Groomers
  • Barber/Hairstylist
  • Manicurist
  • Spa service
  • Masseuse
  • Cosmetologists
  • Boat Captains and Mates
  • Shoe-shiner
  • Room service
  • Cab driver
  • Chauffeur
  • Porter/skycap
  • Mover
  • Babysitter
  • Housekeeper
  • Mail carrier
  • Nanny
  • Newspaper delivery person
  • Personal trainer

Mandatory Service Charges Often Accessed Large Parties and Catered Events

Many restaurants have mandatory service charges which are sometimes added onto bills for large tables of diners, private parties, or catered events. Under federal law and in most states, these mandatory fees are not considered a tip. This is regardless of perception. For example, even if the paying customer interprets a mandatory fee as their tip they assume is going to the folks providing direct table service and mistakenly leave without actually leaving a tip, your employer has no legal obligation to take that service fee to make up the loss to the servers and other tip pool staff. If an employers occasionally decides to give all or part of such a service fee to one or more servers, they do so at their sole discretion and doing it sporadically does not establish any sort of contractual precedent to ever repeat the graciousness.

Were you taken advantage of in a Tip Pooling Situation?

Sometimes a supervisor or owner of a business takes a percentage or a fee out of their employee’s tips.If you feel that you were taken advantage of in a tip pooling situation at your workplace or denied wages and tips you earned, you may have a valid claim for unpaid wages against your employer. There are time constraints on such claims, so please do not hesitate to contact an Employment Attorney at your earliest convenience or chat with one of our online staff if they are available when you are visiting this website.

Contact a California Labor Law Attorney

If you find yourself with an Employee Tips issue or a Tip Pooling dispute in California, contact an employment attorney at Vincent W. Davis & Associates to set up a no-cost, no-obligation consultation for a thorough assessment of your unique situation. Most employment issues can be preliminarily discussed by phone, and then if it is necessary to visit us in person, we have several conveniently-located offices in and around the Southern California counties and cities including, but not limited to:

  • Los Angeles
  • Los Angeles County
  • Orange County
  • Riverside County
  • San Bernardino County
  • Santa Ana</li
  • Beverly Hills
  • Anaheim
  • Irvine
  • Long Beach
  • Pasadena
  • And more…

Arcadia Office
150 N. Santa Anita Ave,
Suite 200
Arcadia, CA 91006
Phone: (626) 446-6442
Fax: (626)-446-6454

Beverly Hills Office
9465 Wilshire Blvd.
Suite 300
Beverly Hills, CA 90212
Phone: (310)-880-5733

La Mirada Office
Cerritos Towne Center
17777 Center Court Drive ,
Suite 600
Cerritos, California, 90703
Phone: 888-888-6542

Los Angeles Office
Gas Company Tower
555 West Fifth Street,
31st Floor
Los Angeles, California, 90013
Phone: (213)-400-4132

Long Beach Office
Landmark Square
111 West Ocean Blvd.,
Suite 400
Long beach, California, 90802

Irvine Office
Oracle Tower
17901 Von Karman Avenue,
Suite 600
Irvine, California, 92614
Phone: (949)-203-3971
Fax: (949)-203-3972

Ontario Office
Lakeshore Center
3281 E. Guasti Road,
7th Floor
City of Ontario, California, 91761

Riverside Office
Turner Riverwalk
11801 Pierce Street,
Suite 200
Riverside, California, 92505
Phone: (909)-996-5644

San Diego
Emerald Plaza
402 West Broadway,
Suite #400
San Diego, California, 92101
Phone: (619)-885-2070

Aliso Viejo
Ladera Corporate Terrace
999 Corporate Drive,
Suite 100
Ladera Ranch, California, 92694
Phone: (714) 721-3822