What is tip pooling?
Some employers require employees to “pool” their tips. This means that they collect all tips and pay them out. Each worker gets a percentage of the pool after collecting the tips.
There are many opinions on tip pooling. Some tip pooling supporters believe that employees will provide better customer service, which in turn will increase tip pools and ultimately lead to higher wages. Some people oppose tip pooling because it penalizes workers who go beyond the call of duty by giving each employee the same percentage regardless of their effort.
Can California Employers Pool Tips?
Yes. California law allows tip pooling. California has more regulations regarding tipping than other states.
Employees must receive tips in a fair and reasonable manner. Employers who pool tips use a formula that determines how much each employee gets from the pool.
Employers who fail to give tips in a fair manner could be violating wage laws. Employers cannot discriminate against employees, give less tips, or give them less tips because of their race, religion or sexual orientation.
Managers who are able to hire or fire employees cannot get a portion of the pooled tips unless they do the exact same work as the other employees. Most supervisors and managers are prohibited from participating in tip pool programs. But, employees who do the same job as others, such as a supervisor in a coffee shop and a barista during their shift, can still claim tips.
Can my employer take my tips?
No. No. Employees are entitled to tips from the moment they receive them. Employers cannot reserve tips unless they have a fair and reasonable tip pooling system, which we discussed earlier.
Can my employer take credit card processing fees from my tips?
No. No. It is against the law to deduct processing fees from tips.
What can I do if my employer takes my tips or violates wage law?
There are a few options if your employer is taking your tips or violating wage laws.
A wage claim can be filed with the Division Labor Standards Enforcement. A Deputy Labor Commissioner will review the case and decide whether to penalize your employer. If the Deputy Labor Commissioner finds that your employer violated wage law, they will hold a conference to try and mediate a solution.
Parties who cannot agree on a conference resolution must attend a hearing. The Labor Commissioner’s Office will issue a decision after the hearing.
An employer who violates the wage law could face the following penalties:
- Fines up to 1,000
- Maximum 60 days in prison
- Restitution to the employee whose rights have been violated
Summarized from an article by Wilshire Law Firm.
