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California courts allows kitchen staff to participate in a tip pool

Contradicting California law which prohibits the following employees from partcipating in a mandatory tip pool program, i.e. “employees who do not provide direct table service and who do not share in the tip pool include dishwashers, cooks, and chefs, except in restaurants where the chefs prepare the food at the patron’s table”,

http://www.dir.ca.gov/dlse/faq_tipsandgratutities.htm

the Second Appellate District of the California Court of Appeals has allowed the inclusion of kitchen staff to participate in a mandatory tip pool.

United States: California Appellate Court Protects Employers Who Allow Tips For Dishwashers

09 April 2009
Article by Matthew D. Marca and Guissu N. Raafat

On March 27, 2009, inBrad Etheridge v. Reins International California, Inc ., No. B205005, the Second Appellate District of the California Court of Appeal approved a mandatory tip-pooling policy that allows participation of kitchen staff. The court rejected all wage and hour claims by a class of waiters arguing that kitchen staff cannot participate in a tip pool. Given the ruling in Etheridge, California restaurant employers with mandatory tip pooling policies would be well advised to review, and if necessary, amend their policies.

Read the rest of the article here:

 http://www.mondaq.com/article.asp?articleid=77692

Oregon (through the courts) already allows inclusion of the kitchen staff in the tip pool because it doesn’t allow the tip credit (server wage there is above the Federal minimum wage). Additionally, there is nothing in Oregon law that addresses tips or tip pooling. I’ll let the Portland Restaurant workers Association take over:

“Oregon law fails to address tips and tip pools and, therefore, BOLI does not enforce any standards regarding tips.  While the U.S. Department of Labor (DOL) establishes regulations regarding tips based on the federal Fair Labor Standards Act (FLSA), the DOL and the courts interpret the law differently.  Recent cases within the United States District Court for the District of Oregon have held that the FLSA does not regulate tips if the employer does not claim a tip credit (and Oregon prohibits employers taking a tip credit).  Employers are also free to make the tip pooling arrangements they dictate a condition of employment. As a result, even though the Department of Labor regulations grant restaurant workers control over their tips, those workers cannot currently assert those rights in Oregon courts”.

http://pdxrwa.org/category/know-your-rights-a-restaurant-workers-survival-guide/introduction/tip-pooling-tip-out/

counting-out-money

8 responses to “California courts allows kitchen staff to participate in a tip pool

  1. Pingback: California courts allows kitchen staff to participate in a tip … | restaurantsportlandoregon.com

  2. goldenfoxx August 23, 2009 at 3:43 am

    So here is the question…obviously that ruling was dictated by someone who has never worked in the industry, and quite frankly didn’t even try to find out how things run in a restaurant. I, for one, cant see a single cook changing the way they do things because they now make extra tip out, its just gonna get worse…oh you want that salad without dressing…how much extra you gonna give me.

    So what do we do about it. I personally don’t live in California but CA nonsense tends to spread like the plague when restraunts smell a way to make more money for there owners and shareholders. (the ironic part is the kitchen staff wont even notice that there wages are going to go down … lame!)

    Goldenfoxx

    • teleburst August 23, 2009 at 8:55 am

      I think it’s going to have to be reversed on appeal, or the wording on the law to specifically exclude kitchen person would have to be accomplished, both of which are possible. The wording of the California law that governs tipped employees doesn’t actually address the issue of what “table service is”, either direct or indirect. It is an interpretation by the California Labor Board and previous rulings of the court. The Labor Board writes, in a fact sheet, “Yes. According to a California court, Labor Code Section 351 allows involuntary tip pooling. Therefore, your employer can require that you share your tips with other staff that provide service in the restaurant. In this regard, it’s DLSE’s position that when a tip pooling arrangement if in effect, the tips are to be distributed among the employees who provide “direct table service.” Such employees could conceivably include waiters and waitresses, busboys, bartenders, host/hostesses and maitre d’s. Employees who do not provide direct table service and who do not share in the tip pool include dishwashers, cooks, and chefs, except in restaurants where the chefs prepare the food at the patron’s table, in which case the chef may participate in the tip pool. Additionally, tip pooling cannot be 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”.

      This seems like a commonsense approach, but apparently some judges are parsing the terms “direct” and “indirect” table service as well as basically wholely tossing out that opinion by claiming that the concept of “table service” is so bread as to include anyone who has anything to do with the operation of the restaurant because it all “affects service” one way or another.

      However, if you read the actual law itself by going to the referenced section of the law, you’ll see that the concept of tip pooling isn’t even addressed and there’s nothing in the law that even addresses service being a prerequisite for tip pooling because tip pooling isn’t even addressed in the first place. It neither specifically allows nor denies tip polling.

      All of this is even possible because California doesn’t allow a tip credit, so conceivably, they wouldn’t have to comply with the Fair Labor Standards Act of 1938 (the FLSA) that governs the idea that you can allow a tip credit because you can allow a sub-minimum hourly wage as long as tips make up at least the difference between the hourly wage and the minimum wage, and California is already mandating a higher than minimum hourly wage. This is the rationale that Oregon courts have made specifically allowing kitchen workers to participate in tip pools. Orgeon, you see, doesn’t even mention tipping at all in their laws, so there’s nothing controlling tip pools at all. There’s no language at all about tips being the sole property of the tipee as there is in the California law (which expressly prohibits the deduction of credit card fees for the tips that a waiter receives).

      This inclusion of the kitchen in a tip pool has been allowable in Oregon for quite a while, as ruled by courts. If you want more info about this, here’s a link:

      http://pdxrwa.org/category/know-your-rights-a-restaurant-workers-survival-guide/introduction/tip-pooling-tip-out/

      It would be harder to do this in the 43 states that allow their employers to pay tipped employees minimum wage, since the FLSA federal law trumps state law.

      So, now that you know the background, about the only things that can be done are the two things that I mentioned in the beginning. Well that and a mass migration of waiters away from restaurants that allow kitchen workers to participate in tip out pools and into restaurants that don’t allow it. That might actually send a pretty strong message, but it entails some personal risk by waiters.

  3. George December 2, 2009 at 3:20 pm

    As a consumer who regularly tips, I want to know why the courts feel that they can decide who is entitled to my private property, my tip.

    While the courts have ruled that certain types of employees may participate in a tip pool that shares my, the customer’s tip, why didn’t they ask me if it’s ok? Isn’t my tip my property. The courts seem to think that my tip is theirs to decide who can or can’t share in it.

    Why are the courts assuming that they may decide who is entitled to my tip? Wasn’t the law passed to protect the public in connection with the practice of tipping. How can the courts transform a law enacted to protect the publics rights concerning tipping into a law protecting rulings which claim that the courts, rather than customers are authorized to determine who is entitled ot the customer’s private property, his tip?

    Can you say corruption. That’s what this load of crap is. There is absolutely no reason the courts should be deciding who is entitled to the customers’s tip. It’s not their property.

    The only reason they are overstepping their authority in this particular instance is because business have brided them to do so. If customers are errantly led to believe that they have no right to determine who is entitled to their tip, employers can steal it from those whom it is given. How can an employee who is given a tip protect his tip when the courts insist that they rather than the customer is authorized to determine who the tip belongs to?

    The whole purpose of these corrupt rulings is to permit employers to violate state law. If customers are effectively stripped of their right to determine who is entitled to their tip, there is no way those workers can protect what customer’s have given them . The courts have effectively stripped customers of their right to determine who should be protected by Calfifornia’s labor laws which address tips and gratuities.

    • teleburst December 2, 2009 at 5:03 pm

      Well George, nice to see you again. You’re nothing if not a one-note symphony.

      It’s interesting that you characterize yourself as a ‘consumer” but conveniently “forget” to disclose that you are a tipped employee yourself.

      “As a consumer who regularly tips, I want to know why the courts feel that they can decide who is entitled to my private property, my tip”.

      Because it’s the law itself that has determined that the tip is your “own personal property”. The thing is, the law has also said that this right to ownership isn’t absolute. Therefore, the courts may always rule on matters of law.

      “While the courts have ruled that certain types of employees may participate in a tip pool that shares my, the customer’s tip, why didn’t they ask me if it’s ok”?

      Because they didn’t have your cell phone number?

      “Isn’t my tip my property”?

      Not absolutely. The “law” allows employers to mandate a tip pool, for instance. Is your house your property? Well, yes, if you’ve paid off the bank. But even then, we have the little matter of emminent domain. If your house is standing in the way of a freeway, your absolute right of ownership might be imperiled.

      “Why are the courts assuming that they may decide who is entitled to my tip? Wasn’t the law passed to protect the public in connection with the practice of tipping. How can the courts transform a law enacted to protect the publics rights concerning tipping into a law protecting rulings which claim that the courts, rather than customers are authorized to determine who is entitled ot the customer’s private property, his tip”?

      Because the courts can rule on matters of law, that’s why.

      “Can you say corruption”.

      Of course I can. I’m saying it right now. Am I pronouncing it correctly? Why, yes I am.

      “Wasn’t the law passed to protect the public in connection with the practice of tipping”.

      Which law? Could you be specific? when was it passed? What’s the name of this law?

      “If customers are errantly led to believe that they have no right to determine who is entitled to their tip, employers can steal it from those whom it is given”.

      You don’t have that right now (under the law). You have no say so over the legal right for an employer to set up a tip sharing system and demand that the employer allow your tip to sidestep that system. of course, you can always surreptitiously stick a $20 in the waiter’s hand independent of the tip and say, “this is for you and you only”. I’ve seen guests do that for backwaiters.

      BTW, there is at least one state, Oregon, that already allows tips to be shared with traditionally tipped employees. If you don’t like that, you’ll have to get the US Code changed. And even then, courts have the right to make rulings on the law of the land.

      BTW, I’m sorry that things suck in Vegas right now. I’m sure that’s adding pressure to your casino job. Just keep a cool head and you’ll get by.

  4. Jeff February 3, 2010 at 3:23 am

    While cooks get a set schedule and make more that min. wage, they should not be in the tip pool.

  5. G Money June 5, 2012 at 5:07 pm

    Teleburst, it’s not a surpise to see you propagating more lies across the web.

    What law says that this right to ownership isn’t absolute? Where do you get this crap?

    Our Constitution guarantees our propery rights. I have never read anything contradicting such rights. Please cite your law or shut up.

    The specific law I am refering to is California Labor Code 356.

    Here’s a link,
    http://law.onecle.com/california/labor/356.html

    The bottom line is California Judges have no authority to decide who the customer’s tip belongs to. We are talking about private property. Section 356 is clarifying the fact that tipping is a practice and right of the consumer and as such cannot be contravened by judges who think that they are above the law. Read the law. And while you’re at it, maybe you should finally get around to reading our Constitution.

    • teleburst June 7, 2012 at 9:45 am

      “George”, I’m not surprised to see you stalking me here.

      Our Constitution doesn’t guarantee absolute property rights. Ever heard of eminent domain?

      Here’s a counter link for you to chew on:

      http://www.dol.gov/whd/regs/compliance/whdfs15.htm

      But we’ve been all over this ad nauseum.

      PS, California law doesn’t even apply to you in Nevada. However, as you surely know, there are FOUR Nevada court cases that have upheld the right to pool tips.

      http://digitalcommons.library.unlv.edu/cgi/viewcontent.cgi?article=1594&context=thesesdissertations

      This PDF also explains how tip pooling can occur in California despite what the California Code that you cite says. The key notion is that a tip pool isn’t collected by the establishment, which is true. The establishment might hold the proceeds of a tip pool for an individual who is unable to collect it on the spot, but the actual transaction is between the two employees, not between employees and establishment.

      I hope this settles things, but, knowing you, I doubt it. I’ll tell you up-front that you are free to express your opinion, but that freedom and privilege will only extend so far. I will not allow you to abuse this forum and, if you do, I will deny you the right to participate.

      Is that clear?

      I hope so.

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