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Q-1.
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What
is a tip? |
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Ans.
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A tip is money a customer
leaves for an employee over the amount due for the goods
sold or services rendered. Tips belong to the employee,
not to the employer.
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Q-2.
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When
a customer pays their bill with a credit card and the
payment includes a tip, when can the employee expect to
receive the money from the employer? |
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Ans.
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Payment of a gratuity
made by a patron using a credit card must be paid to
the employee not later than the next regular payday
following the date the patron authorized the credit
card payment. Labor
Code Section 351
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Q-3.
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My
employer is deducting the credit card processing fees
from my tips. Is this legal? |
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Ans.
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No. Labor
Code Section 351 provides that the employer must
pay the employee the full amount of the tip that is
indicated on the credit card. The employer may not make
any deduction for credit card processing fees or costs
that are charged to the employer by the credit card
company from gratuities paid to the employee.
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Q-4.
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I
work in a large restaurant as a waiter. My employer told
me that I am required to share my tips with the busboy
and the bartender. Am I obligated to do this? |
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Ans.
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Yes.
According to a California court, Labor
Code Section 351 allows involuntary tip pooling. Therefore,
your employer can require that you share your tips with
other staff that provide service in the restaurant. In
this regard, it’s DLSE’s position that when a tip pooling
arrangement if in effect, the tips are to be distributed
among the employees who provide "direct table service."
Such employees could conceivably include waiters and waitresses,
busboys, bartenders, host/hostesses and maitre d’s. Employees
who do not provide direct table service and who do not
share in the tip pool include dishwashers, cooks, and
chefs, except in restaurants where the chefs prepare the
food at the patron’s table, in which case the chef may
participate in the tip pool. Additionally, tip pooling
cannot be used to compensate the owner(s), manager(s),
or supervisor(s) of the business, even if these individuals
should provide direct table service to a patron. |
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Q-5.
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Are
the tips I receive considered part of my "regular rate
of pay" for overtime calculations? |
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Ans.
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No.
Since tips are voluntarily left for you by the customer
of the business and are not being provided by the employer,
they are not considered as part of your regular rate of
pay when calculating overtime. |
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Q-6.
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Is
a mandatory service charge considered to be the same as
a tip or gratuity? |
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Ans.
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No,
a tip is a voluntary amount left by a patron for an employee.
A mandatory service charge is an amount that a patron
is required to pay based on a contractual agreement or
a specified required service amount listed on the menu
of an establishment. An example of a mandatory service
charge that is a contractual agreement would be a 10 or
15 percent charge added to the cost of a banquet. Such
charges are considered as amounts owed by the patron to
the establishment and are not gratuities voluntarily left
for the employees. Therefore, when an employer distributes
all or part of a service charge to its employees, the
distribution may be at the discretion of the employer
and the service charge, which would be in the nature of
a bonus, would be included in the regular rate of pay
when calculating overtime payments. |
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Q-7.
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My
employer deducts my tips from my paycheck. Is this legal? |
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Ans.
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No.
Your employer can neither take your tips (or any part
of them), nor deduct money from your wages because of
the tips you earn. Furthermore, your employer cannot credit
your tips against the money the employer owes you. Labor
Code Section 351 |
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Q-8.
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My
employer pays me less than the minimum wage because he
includes my tips in my hourly pay. Is this legal? |
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Ans.
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No.
Unlike under federal regulations, in California an employer
cannot use an employee’s tips as a credit towards its
obligation to pay the minimum wage. California law requires
that employees receive the minimum wage plus any tips
left for them by patrons of the employer’s business. Labor
Code Section 351 |
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Q-9.
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What
can I do if my employer credits my tips against my wages? |
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Ans.
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You
can either file
a wage claim with the Division of Labor Standards
Enforcement (the Labor Commissioner’s Office), or you
can file a lawsuit in court against your employer in to
recover the lost wages. Additionally, if your employer
is crediting your tips against your wages, you are being
underpaid your wages and thus, if you no longer work for
this employer, you can make a claim for the waiting time
penalty.
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Q-10.
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What
is the procedure that is followed after I file a wage
claim? |
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Ans.
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After your claim is completed
and filed with a local office of the Division of Labor
Standards Enforcement (DLSE), it will be assigned to
a Deputy Labor Commissioner who will determine, based
upon the circumstances of the claim and information
presented, how best to proceed. Initial action taken
regarding the claim can be (i) referral to a conference,
(ii) referral to a hearing, or (iii) dismissal of the
claim.
If the decision is to
hold a conference, the parties will be notified by mail
of the date, time and place of the conference. The purpose
of the conference is to determine the validity of the
claim, and to see if the claim can be resolved without
a hearing. If the claim is not resolved at the conference,
the next step usually is to refer the matter to a hearing
or dismiss it for lack of evidence.
At the hearing the parties
and witnesses testify under oath, and the proceeding
is recorded. After the hearing, an Order, Decision,
or Award (ODA) of the Labor Commissioner will be served
on the parties.
Either party may appeal
the ODA to a civil court of competent jurisdiction.
The court will set the matter for trial, with each party
having the opportunity to present evidence and witnesses.
The evidence and testimony presented at the Labor Commissioner’s
hearing will not be the basis for the court’s decision.
In the case of an appeal by the employer, DLSE may represent
an employee who is financially unable to afford counsel
in the court proceeding.
See the Policies
and Procedures for Wage Claim Processing pamphlet
for more detail on the wage claim procedure. |
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Q-11.
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What
can I do if I prevail at the hearing and the employer
doesn’t pay or appeal the Order, Decision, or Award? |
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Ans.
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When
the Order, Decision, or Award (ODA) is in the employee's
favor and there is no appeal, and the employer does not
pay the ODA, the Division of Labor Standards Enforcement
(DLSE) will have the court enter the ODA as a judgment
against the employer. This judgment has the same force
and effect as any other money judgment entered by the
court. Consequently, you may either try to collect the
judgment yourself or you can assign it to DLSE. |
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Q-12.
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What
can I do if my employer retaliates against me because
I objected to his crediting my tips against my wages? |
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Ans.
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If
your employer discriminates or retaliates against you
in any manner whatsoever, for example, he discharges you
because you object to his crediting your tips against
your wages, or because you file a claim or threaten to
file a claim with the Labor Commissioner, you can file
a discrimination/retaliation complaint with the Labor
Commissioner’s Office. In the alternative, you can file
a lawsuit in court against your employer. |
