FAQs on Tips and Gratuities

Tips and gratuities are an area of wages in that can become confusing for employers, employees, and the legal assistance who settle their disputes. We have put together a few frequently asked questions that we hear about restaurant tips and gratuities on a daily basis that will be helpful in deciding if a situation is legitimate or illegal.

Q: Does my employer have any rights to my tips? 

A: No, any money you get in the form of a tip is entirely yours and your employer has no say over it.

Q: Can I be required to share my tips with my fellow employees by my employer? For example, the bartender or the busboy. 

A: Yes. As long as they took part in the same service as you did, then your employer has a right to ask you to share your tip since the law allows for involuntary tip pooling.

Q: How soon can I receive my tip from my employer if it is included in a credit card? 

A: Your employer is required to add all your credited tips on to your pay check on the next immediate pay day, or in cash that evening or the next day.

Q: What qualifies as a tip?

A: Any money that has been left to the employee by a customer apart from the amount which is due for the goods or services that have been rendered. Tips only belong to the employee to the exclusion of the employer.

Q: Is it legal for my employer to deduct credit card processing fees from my tips? 

A: No. if the credit card company charges the employer any credit card processing fees, the gratuities paid to the employee cannot be deducted to cater for those costs. The full amount shown on the credit card should be paid to the employee.

Q: What should I do if my employer does not comply with the law in matters concerning the tips I receive? 

A: There are two options. You can either take it up with the Division of Labor Standards Enforcement by filing a claim against your employer or file a law suit in court.

Q: What should I do when my employer retaliates for going against his abuse of my tips? 

A: If your employer discriminates against you in any way for objecting to his abuse of your tips, you should either file a lawsuit in court or file a complaint about retaliation/discrimination against your employer with the labor commissioner’s office.