3 tip-related practices that violate wage rights

Workers in a variety of professions may receive tips. Gratuities are often an important part of a worker’s compensation.  For example, workers in the service industries, like those working in restaurants, often accept California minimum wages in return for receiving gratuities from customers. Sometimes, businesses intervene in the gratuity collection process in a way that may violate the worker’s rights to receive all tip wages. The following types of company policies related to tips might constitute a wage violation in California.

Charging a credit card fee to the worker’s tips

Businesses that allow customers to pay via credit card have to accept the costs that come with credit card processing. Visitors to bars and restaurants can add the tip they want to leave to the overall charge for their meals or drinks. Even though the company may have to pay credit card processing charges, the employer generally cannot pass those expenses on to the employee. The worker should always receive the full amount of the tip, even if a customer paid it using a credit card.

Inappropriate tip pooling

Tip pooling is a way to improve the compensation of secondary support workers at a bar or restaurant. Barbacks, bussers, hosts and even kitchen staff may receive a portion of the tips collected by servers at some establishments. At other businesses, all of the service staff combine their tips and then split the full amount for a shift evenly among everyone present. Both practices are often legal if done appropriately. However, the company should not include owners or managers paid on a salary basis in the pool of those receiving a share of the tips collected.

Relying on only tips for pay

Workers have a right to a minimum hourly wage regardless of the promise of gratuities. Companies cannot deny employees hourly wages simply because they are eligible to receive gratuities from customers. There are different minimum wage rules that apply to workers in different professions. The company must meet that minimum standard in addition to allowing the worker to retain their tips. Failing to do so could lead to a wage claim from the worker not receiving appropriate hourly pay.

Workers who recognize how tipping policies maintained by employers could lead to wage violations can stand up for themselves after inappropriate company conduct. A wage claim could lead to workers receiving the hourly pay or denied tips they deserve.