This is the fifth post in our monthly series of CDF’s Labor & Employment Law Blog, providing California employers with wage and hour compliance tips and best practices.
In the restaurant/service industry, gratuities (To Ensure Prompt Service or “tips”) motivate individuals to seek employment. Everywhere you turn, even if you did not receive any real service, workers are seeking tips. California employers must be aware of pitfalls that come along when patrons decide to tip.
California Labor Code section 351 is the primary authority regarding tips. It states:
“No employer or agent shall collect, take, or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron, or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for. An employer that permits patrons to pay gratuities by credit card shall pay the employees the full amount of the gratuity that the patron indicated on the credit card slip, without any deductions 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 employees not later than the next...
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