There is a little-known rule of law that protects employees providing a service to the general public that substantially affects the practice of tipping and is, more recently, gaining attention in the legal community. Are you affected?

Beyond question, the practice of tipping has become widespread in various industries. Nowadays, leaving a tip for your food server, hairdresser, or even casino dealer is quite common. No doubt, the food and beverage industry is appealing to many because of the potential to receive lucrative tips. Other industries, such as the casino, housekeeping and grooming industries, to name a few, likewise utilize the practice of tipping to supplement the income of service providers.

California Labor Code §351 et seq was enacted to protect all such employees who receive tips from the over-reaching hands of their employers. It specifically prohibits employers from maintaining any tip-pooling policy which requires employees to distribute or share any portion of their tips with any owner, manager or supervisor of a business establishment. In other words, no individual with supervisory capacity over others in a workplace can collect, take or receive any portion of any gratuity that is paid, given to or left for an employee by a patron of a business establishment.

The law takes this a step further by likewise prohibiting employers from decreasing, or deducting from, the wages of an employee simply because gratuities are expected in the industry. In fact, tips left by patrons are deemed to be the "sole property of the employee or employees to whom it was paid, given or left for..." by California law. This rule of law applies to any industry in which gratuities are left.

Keep in mind that many tip-pooling policies are perfectly legal. A clear distinction has been drawn between a tip-pooling policy that requires employees to share tips with a supervisory employee versus one that requires sharing tips with mere co-employees. For instance, a restaurant policy that requires servers to share tips with bussers, maitre-d's, or bartenders will likely pass legal muster so long as those employees do not have the authority to hire or discharge any employee or to supervise, direct, or control the acts of employees.

Does Employee have a viable lawsuit against Employer? The answer is "it depends." When the harassing conduct is being committed by co-workers, not supervisors, the employer must have reasonable notice of the unlawful conduct. The facts do not state any supervisor or manager has witnessed the conduct. The facts further state Employee is reluctant to report the conduct for fear of adverse consequence. Notwithstanding, Employee must report the conduct and avail herself of any internal procedures maintained by Employer for reporting sexual harassment. If Employee fails to do so, Employee's claims against Employer may fail.

Perhaps it is time for you to examine the appropriateness of the tip-pooling policy at your workplace. For a free legal consultation concerning these issues, or any other wage or employment issue, please contact the Law Office of Robert D. Coviello - "The Employment Lawyers."

Robert D. Coviello has maintained a private practice in Orange County for over 21 years. His firm accepts cases involving wage & hour, wrongful termination, and all types of unlawful harassment & discrimination. He is a frequent speaker at seminars designed to educate employers and their counsel on employment matters. Recent topics include: Avoiding & Defending Discrimination Charges, Investigating the Sexual Harassment Complaint, and Mis-Classification of Employees. Among other things, Mr. Coviello sits as Chair of the Labor & Employment Law Section of the State and Orange County Bars, is a member of the National Employment Lawyers Association and serves as a Neutral on the Employment Panel of the American Arbitration Association. Perla J. Duvel is an Associate Attorney with Mr. Coviello's firm. She is a member of the Labor & Employment Law Section of the Orange County Bar and has handled a variety of wage & hour, sexual harassment, wrongful termination and employment discrimination claims. Ms. Duvel frequently investigates these matters and has spoken at seminars on the issues of Investigating Employee Sexual Harassment Claims and Conducting Job Interviews without Violating Law.