Tip Pooling in Los Angeles

While tip pooling is legal in California, you still have a right to be paid fair wages. If you have questions, contact a Los Angeles employment lawyer at Setyan Law.

While it is true that your employer can require mandatory tip pooling, there are some important exceptions. If you think your employer has not paid you fairly for regular wages or tips, you should consult with an attorney who handles employment law claims in Los Angeles, CA. The legal professionals at Setyan Law are here with answers.

Tip Pool Meaning

Tip pooling is the practice of combining all of the tips earned by multiple employees and then splitting them between those employees according to established percentages. This is a form of tip sharing that often happens in restaurants and other industries where tipping is standard practice.

Tip pools do usually include employees who customarily receive tips and are within the standard chain of service. However, tip pooling may also include employees who do not directly serve customers.

In some situations, tips are pooled among people who get greater tips compared to staff that usually gets lower tips. For example, wait staff may typically get a 20% tip from customers who eat in the restaurant, whereas a hostess who handles to-go orders may only get 5% tips on average. When there is a tip pooling policy, all tips go into one bucket, and they are split according to agreed upon percentages among all included staff.

Is Mandatory Tip Pooling Legal in California?

Under California law, mandatory tip pooling is legal, but certain conditions must be met, including:

  • All people contributing to the tip pool must be employees
  • All tips added to the pool must have been given to employees
  • The employer, owner of the company, managers, and supervisors cannot get a percentage of the tip pool.

There are some exceptions to these rules. For example, if a manager does the same work as the employees who are involved in the tip pool, then they may also take a percentage of the tips.

Can Tips Be Credited Against an Employee’s Wages?

No. In California, all employees are entitled to be paid a minimum wage, regardless of the tips they receive. In some states, and under federal law, employers may count tips towards the employee’s minimum wages. This is called “tip crediting.” It essentially allows employers to pay workers less than minimum wage. However, in California, an employer must pay an income that meets minimum wage requirements. Employment contracts allowing “tip credits” is illegal as well. Failing to pay wages correctly may amount to unpaid wages

Setyan Law Can Answer Questions About Tip Pooling in California

While tip pooling is legal in California, there are requirements that must be met so that employees are still paid fairly. If you have not been paid tips or have a wage and hour claim, including unpaid overtime, the Los Angeles employment lawyers at Setyan Law can help.

Call our skilled attorneys at Setyan Law today at (213) 618-3655 to begin your case today. We don’t charge you any fees until we help you recover compensation.

How an Employment Attorney in Los Angeles Can Help You

Employment disputes are about more than winning. They often involve your livelihood and can impact your entire life. Setyan Law has a team of legal professionals and discrimination lawyers in Los Angeles, CA, Pasadena, CA, and Glendale, CA.

We will review your case, gather evidence to support your claims, and fight for you to get the justice you deserve.

Please feel free to call us for a free consultation about your rights.