The service industry in California constantly grapples with the complexities surrounding tips, tip pooling, and mandatory service charges. Recently, on August 23, 2024, a federal appeals court blocked the Department of Labor’s (DOL) controversial 80/20/30 rule in Restaurant Law Center, Texas Restaurant Association v. United State Dept. of Labor. This rule, which created significant
As reported last week, the California Attorney General’s office announced that the new state law banning “junk fees” will extend to surcharges at restaurants, marking a significant shift in billing practices in the food industry. Today, the Attorney General finally released the FAQs which were promised last week. Under this interpretation of the Attorney
An issue that constantly plagues the service industry is what to do about tips and the challenges that come with mandated tip pooling and mandatory service charges. We still routinely counsel restaurant clients on the intricacies regarding tips, mandatory tip pools, and service charges. This simple concept, which should be relatively easy, becomes complex under
By Pooja Patel and Anthony Zaller
An issue that constantly plagues the service industry is what to do about tips and the challenges that come with mandated tip pooling and mandatory service charges. This week’s post is an update and a general discussion about tipping and mandatory service charges. This simple concept is surprisingly complex
It is critical for California employers to properly calculate the regular rate of pay for an employee in order to pay the appropriate overtime pay and for premium pay for missed meal and rest breaks. Here are five issues employers must be aware of regarding calculating an employee’s regular rate of pay:
1. Employers must
In O’Grady v. Merchant Exchange Productions, Inc., the California Court of Appeals held that a mandatory service charge could potentially be found to be a gratuity that must be distributed to service employees. The issue in the case is whether a “service charge” can be a “gratuity” that Labor Code section 351 requires to
As I wrote about recently, on March 23, 2018, the Consolidated Appropriations Act, 2018 signed by President Trump changed federal law on the issue of tip pools and allows employers to share tips with back of the house employees. In connection with the new law, the Department of Labor issued a memorandum this week
This week, a federal court in northern California certified portions of a class action 
brought by Uber drivers who worked in California since 2009 (click here for the decision [PDF]). Over 160,000 drivers have worked for Uber in California during this time period, and while the case is making a lot of news,
1) Gratuities
All tips are the emp
loyee’s property, and cannot be taken by the employer. Labor Code section 350 states unequivocally that “Every gratuity is hereby declared to be the sole property of the employee or employees for whom it was paid, given or left for.” In addition, Labor Code section 351 clearly states
The Los Angeles Times is reporting that a panel of city lawmakers approved a draft of the ordinance that would raise the 
minimum wage in Los Angeles to $15 per hour by 2020, moving the ordinance one step closer to passage. There was a backlash this week against the labor unions that were pushing hard