EmploymentQuestion 934 of 1605
Which statement about gratuities (tips) is correct under California law?
a.Employers may deduct credit-card processing fees from tips
b.Tips are the sole property of the employee(s) and an employer may not take any part of them
c.Employers may keep tips to offset the minimum wage (a 'tip credit')
d.Tips must be split with management
Explanation
Labor Code §351 provides that gratuities are the sole property of the employee or employees to whom they are given; an employer may not take, collect, or deduct any part of a gratuity. Unlike federal law, California does not allow a 'tip credit' against minimum wage, so the employer must pay full minimum wage plus let employees keep their tips. Employers also cannot deduct credit-card processing fees from tips.
Law Reference: Labor Code §351Practice all 1605 questions free — no signup required.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)