Depending on the job that you have, you may collect tips from your customers on a regular basis. As with any sort of income, the IRS expects to receive their part of your earnings. Each state has different laws regarding tipped employees. Understanding what laws govern the California region is imperative to understanding your rights and tax duties.
Many people who receive tips as a regular part of their compensation tend to have three main questions. The first deals with understanding how their tips are legally counted. The second is determining what amount of money your employer must pay you on a regular basis. The last common question that tipped employees tend to have is knowing whether or not they must contribute to a tip pool.
Federal Vs. State Laws for Restaurant Worker Violations
A Los Angeles restaurant worker rights lawyer can assist you in determining which laws govern your area. There are two main laws, which are state and federal. They both can specify different ways of handling certain aspects of tipped employees. However, your employment attorney Los Angeles will be able to reveal to you which law is going to be more generous.
In general, the governing law is going to be the one that is most generous to employees. This means that if there are state laws and federal laws regarding the practice area, the judge will utilize the law which is in the best interest of the employee. If you're unsure of which law a judge will utilize, you should consult an employment attorney Los Angeles.
A Basic Rundown Of Tips In California
Under California law, tips belong to employees. This means that your employer has no legal claim to any of your tips. This includes agents of the employer as well. These are going to be managers, supervisors, and owners of the business. There is no legal basis for any employer to take tips from their employees in the great state of California. A lawyer for restaurant employee discrimination Los Angeles can assist you in determining who is an agent of the business and who isn't.
A second general rule that you need to be aware of is that your tips cannot be counted towards your wages. Therefore, your employer can't deduct your tips from their minimum wage obligation for your employment. Your employer must pay you for each hour you work regardless of the tips that you receive during those hours.
You will find that in other states, employers can pay their employees below minimum wage as long as their tips make up the difference. This is referred to legally as tip credit. California doesn't practice this type of law. In fact, California is considered one of the most tipped employee-friendly states in the nation.
The Law Regarding Tip Pooling
Tip pooling has been a common practice for tipped employees for a long time. It essentially involves a select group of employees all putting the tips that they receive into a central pool. At the end of the specified period, usually a shift, the amount of money in the pool is separated evenly among the workers. This is a common practice that is allowed in California, however, specific laws must be followed.
The first requirement that must be met when it comes to tip pooling is that only certain employees may be included. To start out, managers and supervisors may not partake in any tip pooling regardless of the circumstances. The only workers who can legally take part in tip pooling are those who are within the chain of service.
The chain of service refers to those employees who have direct contact with the customers. These are hosts, servers, bartenders, and bussers. Those who don't have direct contact with customers aren't considered in the chain of service. These types of employees are dishwashers, cashiers, and cooks. Tip pooling may only be done with employees who are within the chain of service for the customer with the exemption of managers and supervisors. If you need help determining who is in the chain of service, you should talk to a lawyer for restaurant employee discrimination Los Angeles.
The second requirement for tip pooling is that the tips have to be distributed in both a reasonable and fair manner to the employees involved. Most employers will divide the tips in a way that is proportional to the amount of service that an employee has put in. This means that the larger portion of the tip goes to the server and a smaller share goes to the table busser.
The specific way your employer will distribute the tips in the pool may vary depending on the flow of their particular business. The California Department of Labor Standards Enforcement has constructed an example tip pool distribution percentage based on the standard restaurant. This includes 80 percent going to the wait staff, 15 percent to the bussers, and 5 percent going to the bartenders. Again, a fair distribution is going to highly depend on the individual practices of a particular business.
Determining What Counts As A Tip
In the complex world that we live in, tips are not solely paid in cash anymore. Rather, there are things like credit cards and mandatory service charges that can make it more difficult to determine what money is considered a tip. An employee rights attorney for restaurant workers can help to make a tip amount more easily understood.
When a customer pays in cash, that creates the easiest scenario for understanding your tip amount. Any cash that is left over after the products or services have been paid for is considered a tip. For example, let's say the lunch bill for a customer is $20 and they leave $30. This makes the tip amount $10.
Mandatory service charges can be a bit confusing for patrons, establishments, and employees. For larger tables, some restaurants will employ a mandatory service charge. Your Los Angeles restaurant worker rights lawyer can share with you what the average group size will be for this type of service charge to kick in. What most employees don't realize is that this mandatory fee goes straight to the employer.
The employer may give the employee money from this mandatory service charge if they so wish. But, they don't actually have to give any of it to their employees. Since many patrons treat this mandatory service charge as a tip, many employees will not get a tip from these tables if their employer keeps the entire service charge. In the event that the employer does give a percentage of the fee to their employee, the money must be treated as wages instead of tips.
Tipped employees fall into a whole other sector of the law. With the help of an employee rights attorney for restaurant workers, you can figure out the specific laws governing various aspects of employment in California. It's very important that you understand the basics of how to count tips, what your employer must pay you, and the laws regarding tip pooling so that you can ensure you're getting paid correctly for your hard work.