If you work in a restaurant or another industry in which tips are a common form of compensation, you may wonder if you have to share your tips with your coworkers, such as a busboy or bartender. Per California law, the answer is almost always yes or, more specifically, that it is not illegal for your employer to require you to share.
State law refers to the concept of requiring employees of a single shift to split tips as “tip pooling.” To understand why tip pooling is legal, the State of California Department of Industrial Relations summarizes Labor Code Section 351 for your convenience.
Involuntary tip pooling is legal
Per the labor code, every tip or gratuity that a customer leaves belongs solely to the employee or employees to whom the customer gave, paid or left it for. Courts have interpreted this law to mean that involuntary tip pooling — meaning, tip pooling without yours or other workers’ consent — is legal, given it is “fair and reasonable.”
Defining Fair and Reasonable
What is fair and reasonable, though, you may wonder? Though the definition of both may vary from establishment to establishment, the courts generally agree that employers cannot force employees to share tips with other workers who were not involved in the “chain of service” that contributed to the customer’s overall experience. In most cases, courts validate policies that involve employees who provide “direct table service,” but call into question those that force sharing with, say, the dishwasher or another person who did not play a direct role in the customer’s experience.
It is also worth noting that tip pooling becomes illegal when the owner designs the policy in such a way that owners, supervisors and managers also receive tip compensation. Even if these individuals provide direct table service to customers, they may not collect tips for said service.