Tip Pooling in California: Who Can Share Your Tips, and Can a Manager Take Them?
California lets an employer require servers to share tips with bussers and bartenders, and under case law with kitchen staff who help serve the customer, but owners and managers cannot take any part of the pool. A role-by-role table of who can share, the unsettled cases for shift leads and tips handed to a manager, card fee rules, and the paths and deadlines if your tips were taken.
California lets an employer require servers to share tips with bussers and bartenders, and under case law with kitchen staff who help serve the customer, but owners and managers cannot take any part of the pool. A role-by-role table of who can share, the unsettled cases for shift leads and tips handed to a manager, card fee rules, and the paths and deadlines if your tips were taken.
No. In California, a manager or an owner cannot take any part of the tip pool. Labor Code section 351(a) makes every tip the property of the employees it was left for, and the Labor Commissioner (the state wage agency) says a pool cannot pay owners, managers or supervisors, even if they also serve tables. Your employer can require you to share tips with bussers and bartenders, and under case law with kitchen staff who help serve the customer.
At a glance
- A tip pool collects tips and shares them among workers. Your employer can make one mandatory and include workers in the "chain of service," meaning those who help deliver the customer's meal or drinks.
- Owners and managers cannot take from the pool. A court held that a floor manager who also seated guests and helped serve tables still could not share.
- Whether a shift lead can share depends on their real authority over other workers. The courts have not settled it.
- Card tips must be paid in full, with no processing fee taken out, by the next regular payday.
- There is no lawsuit under section 351 itself, but the Labor Commissioner can cite an employer for taken tips, and other claims may exist.
| What people assume | What California law says |
|---|---|
| A manager who also waits tables can share the pool. | The Labor Commissioner says a pool cannot pay owners, managers or supervisors, even if they also serve tables. |
| Kitchen staff can never be in a tip pool. | A court has approved pools that include cooks, dishwashers and other kitchen staff who help serve the customer. |
| There is a legal split, such as 80/15/5. | No California statute sets a split. The Labor Commissioner says a mandatory pool must be fair and reasonable. |
| My employer can take the card processing fee out of my tips. | Your employer must pay the full card tip, with no deduction for processing fees. |
| Tips count toward my minimum wage. | A California employer cannot count your tips toward the minimum wage. |
Who can share a tip pool in California?
"Yes" means a California court or the Labor Commissioner has approved the role in a mandatory pool. "Unsettled" means no court decision or agency rule we found answers the question.
| Role | Can share? | Why |
|---|---|---|
| Server or waiter | Yes | Courts have upheld pools that make servers share. |
| Busser | Yes | Approved in Leighton (1990) and named in the Labor Commissioner's own example. |
| Bartender | Yes | Approved in several Court of Appeal decisions. |
| Barback | Likely yes; no court has decided it | The chain-of-service rule likely covers it, but no source we found names the role. |
| Host or hostess | Likely yes if the host does not supervise other staff; no court has decided it | A 2005 Labor Commissioner letter lists hostesses as possible pool members. A host who hires, disciplines and assigns other staff, as the Jameson floor manager did, looks like an agent. No court we found has decided whether limited supervisory duties make a worker an agent; Chau, the main shift-supervisor case, held only that an employer may let a worker with such duties share a collective tip box. |
| Food runner or expo | Likely yes; no court has decided it | The chain-of-service rule likely covers it, but no source we found names the role for restaurants. |
| Cook or line cook | Yes, under current case law | A Court of Appeal approved kitchen staff. One judge dissented. |
| Dishwasher | Yes, under current case law | Approved in the same decision. |
| Sommelier or wine steward | Likely yes; no court has decided it | A 2005 Labor Commissioner letter lists wine stewards as possible pool members. |
| Shift lead or shift supervisor | Unsettled | A shift lead who hires, disciplines and assigns other staff, as the Jameson floor manager did, looks like an agent. No court we found has decided whether limited supervisory duties make a worker an agent; Chau, the main shift-supervisor case, held only that an employer may let a worker with such duties share a collective tip box. |
| General manager, assistant manager or floor manager | No | Managers are the employer's "agents" under the tip law (anyone with power to hire, fire, supervise or direct workers), even when they also serve tables. |
| Owner | No | An owner is the "employer" under the tip law. |
| Manager or owner keeping a tip a customer hands them personally | Unsettled | A court decision and the Labor Commissioner's guidance point in different directions. |
Can my manager take part of the tip pool?
No. Labor Code section 351(a) says no employer or agent shall "collect, take, or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron." Two definitions in section 350 decide who is shut out:
- Employer covers every person in business with one or more workers, "irrespective of whether the person is the owner of the business."
- Agent means "every person other than the employer having the authority to hire or discharge any employee or supervise, direct, or control the acts of employees." Whether limited supervisory duties meet that definition is the open question covered under shift leads below.
In Jameson v. Five Feet Restaurant (2003), servers had to give the floor manager 10 percent of their nightly tips. The Court of Appeal held that "tip pooling is only permitted among employees who are neither employers nor agents under section 350." The manager also greeted guests and helped serve tables, but the court said section 350 "does not even require that an agent spend the majority of his or her time performing such functions."
The Labor Commissioner's tips FAQ allows a mandatory pool only if it "is not used to compensate the owner(s), manager(s), or supervisor(s) of the business, even if these individuals should provide direct table service to a patron or are in the chain of service to a patron."
What about shift leads and supervisors?
This is unsettled. In Chau v. Starbucks (2009), the Court of Appeal held that "the applicable statutes do not prohibit Starbucks from permitting shift supervisors to share in the proceeds placed in collective tip boxes." A collective tip box holds tips customers leave for the whole team. The court called it "the flip side" of a mandatory pool, where an employer makes a worker give up part of their own tips. On mandatory pools, Chau agreed with Jameson: an employer violates section 351 "if it requires an employee to give up any part of his or her tip for the benefit of the employer's agent."
Chau said its ruling rested "only on the particular and narrow facts before us," including that supervisors and baristas did the same jobs "the vast majority of the time." It called Jameson's broad reading of "agent" dicta, a remark beyond what the case needed, and said "we do not express an opinion on the merits of this interpretation." So whether a shift lead is an agent remains open.
The title does not decide it; the powers do. Jameson relied on evidence that the floor manager assigned stations, disciplined servers, hired staff, recommended firing and supervised daily. A shift lead who does those things looks like an agent.
Can a manager keep a tip a customer hands them directly?
California has no clear answer. Federal law bars managers from the pool too. But its rule lets a manager keep tips received directly for service "he or she directly and solely provides." Section 351 has no such exception. In 2003, Jameson called the federal authorities cited in that case "inapplicable" because section 351 restricts tip pooling in ways federal law does not; it came before the 2018 federal ban on managers keeping workers' tips. Reading the second sentence of section 351, Chau said an employer must let an employee keep a tip left for them "(without regard to the employee's status)." The workers who sued there conceded that a shift supervisor may keep tips given for their own service, and Chau said whether store managers could share the tip boxes was "not before us," because Starbucks barred them. The Labor Commissioner bars a pool from paying managers even when they serve tables. No California case squarely decides it.
Is a mandatory tip pool legal in California?
Yes. In Leighton v. Old Heidelberg (1990), the Court of Appeal upheld a policy that made a waitress share tips with bussers and bartenders. Section 351 stops an employer keeping tips "as his own as part of his daily gross receipts," the court said, and sharing among workers is not that.
The Labor Commissioner's FAQ adds a condition: "the policy must be fair and reasonable." In Budrow v. Dave & Buster's (2009), the court said who shares "must be based on a reasonable assessment of the patrons' intentions," and that "Section 351 would be violated if management collected any part of the tip pool."
Signing a tip policy does not change this. Labor Code section 356 says the tip law "can not be contravened by a private agreement."
Can cooks, dishwashers and other kitchen staff share tips?
Yes, under current case law. In Etheridge v. Reins International (2009), servers had to pay part of their tips to kitchen staff, the bartender and dishwashers. The Court of Appeal held that "tip pooling is not illegal when the participants in the tip pool contribute to the patron's service, even if not providing direct table service."
One judge dissented, and the California Supreme Court declined to review the case. Some sources say kitchen staff are excluded. A 2005 Labor Commissioner letter lists front-of-house examples, predates Etheridge, and calls its list "by no means all inclusive."
How must the pool be split, and must my employer show me the formula?
No California statute sets a split or requires an employer to give you the formula in writing. Percentages like 80/15/5 that appear online are only examples; no law sets them.
The only standards are general: "fair and reasonable" (the Labor Commissioner) and "a reasonable assessment of the patrons' intentions" (Budrow). Approved examples include sharing by hours worked (a 2005 Labor Commissioner letter) and servers contributing a share of gross sales (Budrow). That 2005 letter also said a pool policy "should include the conditions for payment."
Labor Code section 353 requires "accurate records of all gratuities received by him," open to the state's Department of Industrial Relations. That covers tips the employer itself receives and does not, on its face, give you a copy of pool records. Asking for the written policy is still sensible.
Can my employer take card fees out of my tips?
No. Under section 351(a), the employer "shall pay the employees the full amount of the gratuity that the patron indicated on the credit card slip, without any deductions for any credit card payment processing fees." The money is due "not later than the next regular payday following the date the patron authorized the credit card payment."
Do tips count toward the minimum wage in California?
No. California bans the "tip credit," the practice, allowed under federal rules, of counting tips toward the minimum wage. Section 351(a) bars it. In Henning v. Industrial Welfare Commission (1988), the California Supreme Court held section 351 bars a lower minimum wage for tipped workers. The state minimum wage is $16.90 an hour in 2026, before tips. The City of Los Angeles also says tips cannot count toward its minimum wage, and we found no Los Angeles rule on pooling itself, so state law governs. See our guide to the California minimum wage for current rates.
Is a mandatory service charge a tip?
Sometimes. In O'Grady v. Merchant Exchange Productions, a banquet worker alleged that the employer paid part of a mandatory service charge to "managers and other non-service employees." The trial court upheld the employer's challenge to the whole complaint. The Court of Appeal reversed and held there is "no categorical prohibition why what is called a service charge cannot also meet the statutory definition of a gratuity." The Labor Commissioner says it turns on whether "the charge is perceived and intended by a customer to be a gratuity." If it counts as a tip, section 351 covers it.
Ready to talk it through?
If a manager takes a cut of the pool, or your card tips arrive short, those facts can matter. Tell us what happened and we will review a possible wage claim free. Contact us for a confidential review.
What can I do if a manager took tips from the pool?
In Lu v. Hawaiian Gardens Casino (2010), the California Supreme Court held that "section 351 does not contain a private right to sue," but said that holding "does not necessarily foreclose the availability of other remedies." These are the main routes:
- The Labor Commissioner. Section 351(b), in effect since January 1, 2026, says the Labor Commissioner "may investigate and issue a citation or file a civil action for gratuities taken or withheld." The 2025 bill behind it, SB 648, gave the agency this power. It did not give workers a new right to sue. Where tips were credited against wages, its FAQ says you can file a wage claim or sue; see our guide to filing a California Labor Board wage claim.
- The Unfair Competition Law (UCL). The UCL is a state law against unlawful, unfair or fraudulent business practices. In Lu, the Court of Appeal held section 351 may serve as the basis for a UCL claim, and the Supreme Court, which reviewed only the private-right question, affirmed. The Jameson and Chau workers also sued under the UCL.
- Conversion, a lawsuit for wrongfully taking someone's property. The Supreme Court saw "no apparent reason why other" remedies, "such as a common law action for conversion, may not be available under appropriate circumstances." That is not a ruling that such a claim wins.
- PAGA, which lets a worker who personally suffered a violation seek civil penalties after notice to the Labor and Workforce Development Agency. Section 351 names no penalty amount. Our reading is that PAGA's default penalty then applies: $100 for each affected employee per pay period, with other amounts in some cases, split 65 percent to the agency and 35 percent to affected employees. No court we found has decided this.
An employer who violates the tip law also commits a misdemeanor, with a fine of up to $1,000, up to 60 days in jail, or both. That case is for prosecutors to bring.
Retaliation is illegal too. Labor Code section 1102.5 protects reporting a suspected violation of a state or federal statute to an agency or to someone with authority over you. Section 98.6 protects complaining about unpaid wages; if the employer acts against you within 90 days, the law presumes retaliation, which the employer can try to rebut, and civil penalties run up to $10,000 per employee for each violation. See also our page on wage theft in California.
How long do I have to act?
It depends on the claim:
- UCL: four years, under Business and Professions Code section 17208.
- PAGA: one year. Only violations you personally suffered within that period count. You must notify the Labor and Workforce Development Agency first, and the filing fee is $75, which can be waived.
- Retaliation complaint to the Labor Commissioner: one year under Labor Code section 98.7, which can be extended for good cause.
- Conversion: possibly three years. Code of Civil Procedure section 338(c)(1) gives three years for "taking, detaining, or injuring goods or chattels." No court we found has applied it to taken tips, so treat that as unsettled and do not wait.
Our page on important time limits for California employment cases lists the main deadlines. Deadlines can run early, so contact our unpaid wages lawyers promptly to confirm yours. Start keeping these records now:
- The written tip policy, and any notice that it changed.
- Who received pool money, and who schedules, disciplines, hires or directs staff.
- Card tip amounts and the payday they arrived.
- Pay stubs showing every hour paid at least the minimum wage before tips.
- Dates of any complaint and anything that happened to you afterward.
Related restaurant pay rules: split-shift pay and reporting-time pay.
Frequently asked questions
Can you take tips as a manager in California?
Not from the tip pool. Labor Code section 351(a) bars an employer or its agent, meaning anyone with authority to hire, fire, supervise or direct other workers, from taking any part of a tip. The Labor Commissioner says this holds even if the manager also serves tables. Whether a manager may keep a tip a customer hands them personally is unsettled in California.
Can a manager who also waits tables share the tip pool?
No. In Jameson v. Five Feet Restaurant, a floor manager who also seated guests and helped serve tables still could not share. The Labor Commissioner takes the same position. Jameson added that an agent need not spend most of their time managing; Chau (2009) took no view on that point.
Can cooks and dishwashers be in a tip pool in California?
Yes, under current case law. In Etheridge v. Reins International, the Court of Appeal approved a pool that included kitchen staff and dishwashers because they contribute to the customer's service. One judge dissented, and the Supreme Court declined to review the case.
Can my employer change the tip pool split without telling me?
California has no statute that requires the formula in writing or forbids changing it. The Labor Commissioner says a mandatory pool must be fair and reasonable. We found no court decision on whether a secret or changing formula breaks that standard.
Is a mandatory service charge a tip in California?
It can be. The Court of Appeal held in O'Grady v. Merchant Exchange Productions that a charge called a service charge can still meet the legal definition of a tip. The Labor Commissioner says it depends on whether customers understand and intend it as a tip.
Can I sue my employer for taking my tips?
Not under section 351 alone, which gives workers no private right to sue. Other routes may be available: a Labor Commissioner citation under section 351(b), a UCL claim, a conversion claim, or PAGA penalties. Deadlines differ, from one year for PAGA to four years under the UCL, so act promptly.
The Law Offices of Jonathan J. Delshad is a Los Angeles based employment law firm representing employees across California in wrongful termination, discrimination, retaliation, harassment, and wage and hour matters. Representing employees is the core of the firm's practice. Mr. Delshad serves as Editor-in-Chief of the California Wrongful Termination Law Review and trained at Latham & Watkins. Recognition includes Super Lawyers (2022 to 2027), Best Lawyers (since 2017), and an Avvo 10.0 "Superb" rating. Reviewed for California employment law accuracy. Last updated: November 9, 2026.
Attorney advertising. This article is educational only and is not legal advice. Reading it does not create an attorney-client relationship, which exists only under a signed engagement agreement. Every case is different, and outcomes depend on the specific facts. Deadlines can run early, so consult a lawyer promptly about your situation.
