Can we use a tip credit in California?

Q. We are expanding out hospitality chain into California. What is the maximum tip credit we will be able to deduct from servers in California?

A. California does not allow employers to take a tip credit. Thus, tipped employees in California are entitled to the minimum wage regardless of their tips. As of Jan. 1, 2017, the minimum wage in the state of California is $10.00 per hour for employers with fewer than 26 employees, and $10.50 per hour for employers with 26 or more employees. Employers may also want to note that several municipalities in California have higher minimum wages.