Unpaid Tips

Under California law, tips are the solely the property of the employee to which they are given.  Most basically, as you would assume, this means that an employer cannot keep tips given to any of their employees.  More specifically, California Labor Code § 351 also prohibits employers from “crediting” tips against the money owed to an employee.  Tip credits are legal under Federal law, but not California law.


Therefore, an employer cannot deduct tips from a paycheck, and cannot credit any tips towards a paycheck.


Tip pooling legal under California law, even though some might argue that this involves your employer (temporarily) taking your property.  However, because they cannot keep any of the tips themselves, employers are prohibited from distributing tips to employees in managerial positions, as this would essentially be the employer tipping themselves, and thus, improperly withholding tips.   It's important to remember that your manager cannot take a share of your tips.


Under a recent change to federal law, as of 2018, restaurant may combine all the tips received and then distribute them among servers, bussers, bartenders and hosts.  Previously, federal law had been interpreted to exclude cooks and dishwashers from receiving a share of pooled tips.


Lastly, under California Labor Code § 351, if a customer leaves a tip using a credit card, that tip must be paid to the employee at the time of the next regular payday following the date the customer authorized the tip.


The statute of limitations in California for unpaid wages is three years, which can be extended one additional year in certain situations. 

If your employer or manager has withheld tips from you, please contact our firm to set  up a free consultation.

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