If you own restaurant in California then your waitress and bar tenders and those who perform valet responsibilities from moving furniture and other things are considered employees who may receive tips.
Wage and Hour Laws for Tip Income
If you receive your California tips as part of your compensation, then your legal rights may be more complex.What is a Tip?
California law is generally protective of it’s employees so the state laws generally trump federal laws on wages and hours.with the woners, the managers or supervisors. Your tips cannot also be used to undermine your minimum wage earnings. In other states, employers could pay their employers less than minimum wage, if their employees earn enough in tips for make up for the difference.
California Waitress Tips
Tip Pooling
California law allows for tip pooling however. Employers can require a group of employer to pool their tips together, they are then distributed to those same employees.
What employees can be included on a tip pool?
If they are chain of service employees and they get their tips from a particular customer, then they can be included in that tip pool.
These include general servers, bartenders, hosts and bussers. Cooks, dishwashers and cashiers are not.
However, there can be an exception to the chain of service rule, and that is managers and supervisors cannot partake in the tip pool even if they have given direct table service.
Tips must also be distributed fairly and reasonable.
There ought to be a fair system for how much in tips are paid out to each employee.
WHAT COUNTS AS TIPS IN CALIFORNIA?
These charges are for large tables or private parties or catered events. In CA, this is not considered a tip. If the customer thinks the money is not going to you and does not put things extra on the table, your employer can keep money as service charge.
Some owners may choose to give part of this money to employees but it is not mandatory. In short, employees have no legal right to it.
IRS states that a portion of a mandatory service charge which employers pay out is treated as wages, not necessarily tips. This means that employers must first withhold and pay Social Security and Medicare (FICA) and would not claim it against tax obligations.
Tips can count if:
- The payment is voluntary
- The customer has unrestricted right to determine amount
- The amount is not set through employer policy or subject to negotiation.
- The customer must have the right to determine who receives the payment.
HOW TO MANAGE YOUR WAITRESS TIPS IN CALIFORNIA
It’s good to get into some research on how the state of CA currently operates on tip wages.
You can create pay stubs if you don’t have any from work and use these stubs to track income that was unaccounted for. Creating pay stubs helps you keep track of your income and your taxes, your California waitressing will be an authentic endeavor if you know your rights, hustle well and get paid with your salary and then your tips!