Who Owns a Tip?
Section 351 of the labor code in California legislature exists to protect employees’ rights to their tips. Employers may not collect, take or receive any portion of a gratuity left for an employee by a customer. If your employer or manager has argued that they own part of your tip, then you may have an employment law case. Further protections exist in section 351 to define ownership. For example, an employer may not credit your tip against your wages as a way to gain ownership of a gratuity.
Defining what a “tip” means adds to the confusion of wage and hour law. In a voluntary tipping business, any cash amount above the charge for service is considered a tip. When paid with a credit card, a tip is defined by the customer on their bill. In California, your employer must give you the full listed credit card tip. However, if your employer has a mandatory service charge, then this is not considered a tip. Unfortunately, employees have limited legal right when an employer uses mandatory service charges.
