A tip is money a customer paid to (or left for) an employee over the amount due for the goods or services sold. Tips belong to the employee, not to the employer. Your employer cannot take your tips (or any part of them), and cannot deduct money from your pay because of tips you earn. Your employer cannot credit the amount of your tips against the money she owes you. Management personnel are not entitled to any portion of employee’s tips. You do not have to pay back your tips to your employer, with one exception that is explained below. An employer can't get around any of the laws mentioned above by getting an employee to agree to a deduction.

Credit Card Fees: Since the employer has chosen to use the services of the credit card company, the employer must pay that cost. The fee is a cost of doing business that it can’t shift to employees.

Minimum Wage and Tips: Although some other states allow employers to pay tipped employees less, California requires that employees are paid minimum wage plus tips.

"Tipping Out" or "Tip Pooling": Sharing tips with other employees is called "tip pooling" or "tipping out" and is usually legal if it is common in your trade (e.g., restaurant workers). Since tips belong to the employees who helped to "serve the customer," and sometimes more than one employee "serves" a customer (e.g., cooks, bussers, and waiters all make sure the customer gets good service), it's OK for your employer to force you to share tips with those other employees that help. Owners and managers cannot share in pooled tips, but, in limited circumstances shift supervisors who perform work for customers may. However, if you have to tip out too much to other employees, the arrangement may not be legal. For example, it is usual in the restaurant trade for a waitress to tip out 15 to 20% to other employees, so this arrangement is almost certainly reasonable. On the other hand, if a waitress has to give up 60% of the tips she collects to other employees, that arrangement may not be legal.

Service Charges: If the customer is required to pay a service charge attached to their bill, then it is not a tip, and your employer can keep all or part of it. A service charge belongs to the employer, not the employee. If an employer chooses to pay part of the service charge to her employees, then that money can be considered part of the employee's wages.

If you feel that you have been unfairly denied tips you have earned, contact Kletter Law Firm.