Working a service job in California means that your tips likely comprise a substantial amount of your take-home pay. Your employer may pay you less per hour than what you should receive under minimum wage laws, and the tips are meant to help close the gap..

Maybe you develop a rapport with regulars who tip you generously because they know you and trust the service you provide and you go above and beyond for everyone coming to the restaurant. Your gratuity represents not only the amount of effort you put into your job but the amount of money you earn by selling food and beverages on behalf of your employer.

The chances are good that many people will pay for their food and issue a tip via a credit card. If your employer attempts to pass transaction or processing fees on to you when you receive a gratuity on a credit card, they violate California state wage laws.

Tip pooling is legal, but seizing part of a tip is not

Your employer can require that you share a portion of your tips with other staff members who contribute to the restaurant experience or interact with customers. Tipping the person who busses tables, the bartender and even the host could be obligatory at your place of employment, and that still complies with state law. However, if the owner or manager of the business attempts to take a portion of your tips for themselves to cover their costs, that violates California law.

Businesses have to pay a certain fees for the use of credit cards. Typically, service agreements with credit card processing companies involved both a percentage charged that applies to transactions and a per-transaction fee. Companies build these costs into their pricing and pass them on to customers.

You as an employee should not have to cover the company’s cost for processing a credit card payment. Documentation of your employer taking some of your tips each time someone leaves a gratuity on a credit card transaction could provide grounds for a wage claim against your employer.