A tip, also known as a gratuity, is a voluntary payment given by a customer to an employee for services rendered. Tips belong to the employee, not the employer. California labor laws strictly regulate how tips are handled to prevent misuse or unfair practices.
If your right to how you receive tips is violated, please contact our Orange County wage and hour attorneys to discuss your legal options today.
This is the primary law governing tips in California. It establishes the following key protections:
Section 353 ensures transparency regarding tip distribution. Employers who collect tips as part of a group pooling system must clearly disclose how tips are distributed among employees.
This law prohibits employers from forcing employees to share tips with the employer or requiring employees to give up their tips as a condition of employment.
Employers also cannot deduct credit card processing fees from tips paid to employees. For example, if a customer tips $10 on a credit card, the employee must receive the full $10, even if the credit card company charges a processing fee.
Service charges, such as those added automatically to large party bills or catered events, are not considered tips under California law. Employers can decide how to distribute these charges, and they are not required to give them to employees unless specified by company policy or contract.
If you believe your employer has violated California’s tip laws, take the following steps:
Employees who experience tip law violations in California have several legal remedies to recover lost earnings and hold employers accountable. Under California Labor Code Section 351, employees can recover the following:
Employers may also face civil penalties and be required to pay waiting time penalties for failing to pay owed tips at termination. If you suspect your employer is violating California tip laws, speak to an experienced Orange County wage and hour attorney. With the right support, you can recover what you are owed and help ensure you are treated fairly in the workplace. Contact us today.