“Tip Credit” Law Not Valid in California

The food industry is prone to violations of  some very unforgiving minimum wage and overtime compensation rules. For example, some restaurant owners and managers mistakenly presume they can pay employees less than the hourly minimum wage ($8.00/hour in California; $7.25 federal law) if workers can make up the rest in tips.  While many states recognize such “tip credit,” California does not.

California Labor Code Section 1194 empowers employees to sue for  company failure to pay minimum wage and overtime. No agreement to work for less is valid.

“Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit.”

Correction and prevention are obviously preferred to dealing with a lawsuit. If you are California employer with potential minimum wage or overtime issues, contact an experienced employment attorney for help.