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Laws regarding tipped employees

Unlike in many states, tipped employees in California enjoy the same minimum wage as all other employees. Many of these workers still often receive tips or gratuities, and there are specific laws regarding these tips that help protect the employee.

According to the State of California Department of Industrial Relations, money paid as a tip belongs exclusively to the employee, and the employer is not allowed to keep any of it or deduct wages they pay because of tips. This means employers cannot deduct things like credit card processing fees from the tip amount, nor can they credit the tips towards the hourly pay. One way the tips can be distributed is as part of a tip pool. Traditionally, this includes other service providers that help contribute to the guest's overall experience. Workers who often are allowed to partake in the pooling of tips include bartenders, food runners and bussers, but a recent law was passed to expand the types of employees who can access this pool.

According to the San Francisco Chronicle, this new federal law affects a number of states that do not have a separate wage minimum for tipped workers. In the past, kitchen employees, such as cooks, dishwashers and food prep staff, were not able to receive any tip money. The new law not allows restaurants to distribute tips to not only front-of-the-house workers but also those with a more indirect interaction with guests. This allows for better wage equality and, arguably, may bolster cooperation among all members of the staff. 

 

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