L.A. Businesses Seek to Count Tips Toward Minimum Wage Requirements

As Los Angeles city leaders ponder the steps they need to take to increase wages across the city, business owners are pushing hard to have tips counted toward minimum wage requirements for workers in the restaurant industry and other service industries where tipping is more common. Currently, California labor laws prohibit business owners from counting tips toward minimum wage requirements. But area restaurant owners claim increasing minimum wage levels across the city will force them out of business entirely unless they can use tips to offset their obligations.

The California Restaurant Association has been working to rally support. In response, state Assemblyman Tom Daly recently introduced association-sponsored legislation to loosen regulations that prohibit counting tips toward minimum wage, but he indicated the legislation failed to garner enough support to move forward, despite backing from L.A. Mayor Eric Garcetti.
Studies in other areas, including New York, where tips can be counted toward wage requirements, have found that complex rules can result in workers being significantly underpaid.

As an employee, knowing your rights is critical. Here are six common misconceptions about wages you need to know:

1.    You check can’t be withheld for poor performance.

2.    You must be paid on time.

3.    If you work more than 40 hours in a week, and you’re not considered an exempt employee, you must be paid at least one-and-a-half times the regular hourly wage for your overtime.

4.    Whether or not you’re exempt from overtime is determined by federal regulations, not by your employer.

5.    You must be paid for the hours you work – you cannot be given “comp time” or other options instead of pay.

6.    You cannot be prohibited from discussing your salary with your coworkers.

Are you confused about your rights in the workplace? Call Joseph & Kirschenbaum LLP right now at (212) 688-5640, or email the team at info@jhllp.com, to explore what you can do about an employer who has harassed you or violated other laws, like the Fair Labor Standards Act (FLSA) or New York Labor Laws (NYLL).