Legal Question in Employment Law in California

Tips/Gratuities

Is it legal for a company to deduct a percentage from a servers portion of his/her gratuity added to a banquet (say a wedding reception) to pay the taxes on the banquet servers tip? The tip is added to the servers paycheck, not left on the table.


Asked on 4/12/06, 11:48 pm

2 Answers from Attorneys
Carl Starrett Law Offices of Carl H. Starrett II

Re: Tips/Gratuities

Regardless of the source of the income, it is money paid by an employer and is subject to withholding. There is no legal reason why your employer cannot deduct taxes from the server's tips.

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Answered on 4/18/06, 1:08 am
Scott Miller Law Office of Scott A. Miller

Re: Tips/Gratuities

Since the servers tip was added into the customers final purchase, the employer will deduct taxes from the tip since it is income. Thus, it is a legal deduction of taxes from the tip. However, the employer may not use the table tips left to the table servers to offset an hourly wage.

Scott Miller, California Wage Law Attorney

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Answered on 4/18/06, 1:31 am


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