The Court of Appeal of California has finally answered a vexing question: Employers can order employees who receive direct customer tips to turn over some of the money to be redistributed to other employees who provide additional services.
Recent case: Haim worked as a dealer at a California casino that operates table card games. The casino required dealers like Haim to contribute a set dollar amount to a tip pool, which was then divvied up among other service employees, such as waitresses and waiters.
Haim sued, alleging that since the required tip pool contributions came out of money gamblers directly gave to the dealers, the money belonged to the dealers alone. He argued that what counted was customer intent and that intent was clear—they intended to tip the dealers.
The court disagreed. It said that customers might understand their money would go to other service persons, too. Plus, because participation in the tip pool was a required condition of employment, accepting a job as a dealer meant accepting tip pooling. That made tip pooling voluntary on the dealers’ part. In short, the casino could legally require pooling of some of the tips the dealers received directly from gamblers. (Avidor v. Sutter’s Place, No. H037142, Court of Appeal of California, 2013)
Final note: Employers can’t, however, confiscate tip money and keep it for the company instead of distributing it to other employees.