It appears to be fairly common practice for certain types of employers to steal tips paid by customers for the benefit of employees.  This happens frequently in the case of catering companies and banquet servers.  All too often, patrons of a banquet are charged a fixed percentage of the total bill as a mandatory gratuity.  However, this money is then kept by the caterer, under the reasoning that the food servers are already paid a wage for their services.  Under California law, this is a form of fraud, and it is a criminal violation, as well as theft of employee's property.  Labor Code Section 351 declares that "Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for."  Under Labor Code Section 353,  "Every employer shall keep accurate records of all gratuities received by him, whether received directly from the employee or indirectly by means of deductions from the wages of the employee or otherwise."  It is safe to assume that an employer who stole gratuities and kept no adequate records would bear a very difficult burden in disproving a food server gratuity fraud case.  Any food server who has been deprived of tips or gratuities has a valid legal claim for unpaid wages under the Unfair Competition Law, Business and Professions Code Section 17203.  If the food server has been fired or quit and has not been paid the tips or gratuities, he or she may also be entitled to additional damages in the form of penalty wages of up to 30 days of pay. Attorney's fees incurred in a lawsuit to recover the unpaid wages may also be available under Labor Code 218.5.

If you have questions about Gratuities or Tip Fraud, please feel free to give us a call at (858) 259-7790 or contact us online.