Total Articles: 10
No Private Right of Action for Violation of California Law Prohibiting Employers from Taking Tips Left For Employees.
California's Labor Code section 351 prohibits employers from taking any gratuity left by patrons for its employees, and states that such gratuity belongs solely to the employee for whom it was left. In the recent case of Lu v. Hawaiian Gardens Casino, Inc., California's Supreme Court held that employees do not have a private right of action under section 351.
California Appellate Court Adds New Dimension To Tip Pooling Rules.
In a case titled Chau v. Starbucks, a California appellate court has added a new dimension to rules regarding tip pooling in California. Tip pooling is the practice of sharing customer tips among staff. It is a common practice in restaurants. California’s Labor Code has a specific rule that precludes managers or supervisors from taking part in the tip pool distribution.
STARBUCKS ESCAPES $100M TIP POOLING RULING.
Earlier this year, a San Diego trial court issued a $100 million verdict against Starbucks Corporation in a controversial class action involving how Starbucks distributes tip jar monies. About 10 days ago, a California Court of Appeal reversed that ruling. In doing so, the court clarified one of the important rules that hospitality industry employers must follow when devising any tip sharing arrangements.
EVERYONE INTO THE POOL: COURT EXPANDS RESTAURANT TIP POOLING RULES.
A recent California appellate court opinion has substantially expanded the group of restaurant personnel who may participate in a mandatory tip pooling arrangement. Tip pooling is a practice where some of the tips received by tipped employees are shared with other restaurant employees. Under existing law and longstanding industry practice, restaurant servers pool their tips and distribute a portion of that money to bus persons, food runners and others who directly assist in serving the customer. Kitchen personnel and others are typically left out of such an arrangement.
TIP POOLING: A NEW WAGE AND HOUR ISSUE TO BE EXPLOITED?
Maybe like your morning, the controversy over tip pooling perked up over a cup of coffee. A little over a year ago, a court awarded over $85 million dollars to Starbucks “baristas,” finding a Starbucks tip pooling policy allowed shift supervisors to unlawfully share in the pooled tips. While many employers may be familiar with other wage and hour issues, such as overtime and meal and rest breaks, tip pooling is one of those issues that has gone undisturbed for many years. Now that the sleeping giant is awake, employers in applicable industries should become fully aware of the current rules in California governing tip pooling.
Tip Pooling Not Limited To Restaurants.
Tip pooling is the practice of taking customer gratuities and dividing the money among employees. In California, the practice is allowed, but particular rules apply, including the prohibition against supervisor participation.
Tips on Tip Pooling.
In March a California court awarded more than $105 million to Starbucks baristas due to the company's practice of permitting supervisors to share the tips. The case is significant to all California employers that have tip-sharing arrangements.
Court Serves a Bitter Brew to Coffee Chain $105 Million Awarded in Tips Case.
How would you like your class action lawsuit served—tall, grande, or vente? An employee class action lawsuit that recently concluded in San Diego against Starbucks serves as a reminder to all restaurants, hotels, and other hospitality businesses: be careful who shares in the tip pool.
Starbucks in Hot Water Over Tips.
Here is something to ponder as you enjoy your next beverage from Starbucks: How many venti, half-caf-half-soy-no-foam-latte-whips does it take to generate $87 million in tips over a seven-year period? It might take more than one refill for you to do that math. But wait, there's more. Consider that the recent and widely reported $100 million-plus award to about 100,000 Starbucks "baristas" compensates them only for a portion of the total tips customers paid (plus interest). That is, just a fraction of what must have been hundreds of millions in total tips wrongfully distributed to shift supervisors. The award, one of the largest reported employment law verdicts, is striking not only because of its sheer size, but also because it is based on optional "gratuities" that are paid by customers rather than the employer.
A Lesson for California Employers to Learn with their Morning Cup of Coffee.
A San Diego, California Judge just ordered Starbucks to pay $100 million in back tips and interest to coffee baristas who were forced to share their tips with their shift supervisors. While Starbucks vows to appeal the ruling, it brings to light certain lessons that California employers of tipped employees should learn.
