What is the minimum wage for servers in California?

Posted on August 16, 2022

In California, the minimum wage for servers in 2022 is

1. $15 per hour if their employer has 26 or more employees, and
2. $14 per hour if their employer has 25 or fewer employees.

In some cities and counties, the minimum wage is higher.

Unlike in some other states, servers and other workers who earn tips are not exempt from minimum wage laws in California. This means they are entitled to earn the full minimum hourly wage in addition to all of their tip earnings.

Do California’s minimum wage laws apply to servers?

Yes, California’s minimum wage law applies to servers and tipped employees.

California Labor Code 351 LAB states that your tips are your sole property. If you receive a tip from a customer, it belongs to you. Importantly, this means that your employer is not allowed to:

• take your tip,
• share your tip with owners, managers, or supervisors, or
• use the gratuity as a tip credit to justify paying you less than the applicable minimum wage.¹

As a result, employers still have to pay the minimum wage rate to workers who frequently receive tips or other gratuities, like:

• waiters and waitresses,
• bartenders,
• valets, and
• food service employees.

Are servers tipped employees?

Generally, a tipped employee is any employee who customarily and regularly receives more than $30 per month in tips. This definition comes from the federal Fair Labor Standards Act (FLSA).² However, many state employment laws alter this definition.

A tip includes any money left by a customer for an employee that is not required to cover the goods or services provided by the employee.³

Generally, tipped employees do not have to be paid the minimum wage by the employer. Many states allow employers to pay tipped employers an hourly wage that is well below the minimum. States allow for a “tip credit” to make up what is necessary to reach the state’s regular minimum wage.

In California, however, state laws make the distinction between tipped and non-tipped employees meaningless for minimum wage purposes. Regardless of whether you typically earn more than $30 in tips per month, you are still entitled to the applicable minimum wage in the state.

What are the minimum wage increases in California?

California’s minimum wage laws are among the highest in the country. They are also in the process of incrementally increasing across the state. The current minimum wage in 2022 is $15 per hour if your employer has 26 or more employees, and $14 per hour if your employer has 25 or fewer employees. Additionally, some local counties and cities have their own minimum wage laws that may guarantee you a higher wage than the hourly minimum required by California law.

In 2016, California passed a labor law that slowly raised the minimum wage in the state every year from 2017 through 2023.⁴ This law differentiates between the minimum cash wage that has to be paid by small employers and what has to be paid by large employers. It increases the minimum wage from $10.50 per hour in 2017 up to $15.50 per hour for everyone in 2023⁵:

Year	California Minimum Wage for Employers with 26 or More Employees	California Minimum Wage for Employers with 25 or Fewer Employees
2017	$10.50 per hour	$10.00 per hour
2018	$11.00 per hour	$10.50 per hour
2019	$12.00 per hour	$11.00 per hour
2020	$13.00 per hour	$12.00 per hour
2021	$14.00 per hour	$13.00 per hour
2022	$15.00 per hour	$14.00 per hour
2023	$15.50 per hour	$15.50 per hour

Just like the state of California offers a higher minimum wage than the federal minimum, some cities in the state offer a higher minimum than the state minimum. Some examples of local minimum wages that are higher than in the rest of California are:

• Berkeley, which has a minimum wage of $16.99 per hour,⁶
• Los Angeles, which has a minimum wage of $16.04 per hour,⁷
• Oakland, which has a minimum wage of $15.06 per hour,⁸
• San Francisco, which also has a minimum wage of $16.99 per hour,⁹ and
• San Jose, which offers a minimum wage of $16.20 per hour.¹⁰

Employers cannot contract around these minimum wage laws. You cannot legally waive your rights to be paid a minimum wage.

How does this compare to the tipped minimum wage elsewhere?

The minimum wage for employees who receive tips is far higher in California than it is in many other states.

The minimum wage under federal law is $7.25 per hour. Under the FLSA, though, tipped workers are not even entitled to that minimum wage.¹¹ Instead, employers only have to pay them a minimum cash wage of $2.13 per hour.¹² Employers can then use the employee’s gratuities as a tip credit towards the employer’s minimum wage obligations.¹³ Under the FLSA, then, the law requires a $2.13 minimum cash wage and then allows a $5.12 tip credit to reach the federal minimum wage of $7.25.

Some states do not offer more than the federal minimum wage to tipped employees. Some of these states include:

• Alabama,
• Georgia,
• Kansas,
• Mississippi,
• North Carolina,
• Texas, and
• Utah.¹⁴

Others offer a higher minimum cash wage to tipped employees, but one still lower than the normal state minimum wage, relying on a tip credit to make up the difference. This brings a server’s guaranteed wage closer to the minimum, but not all the way. For example, servers in:

• Arkansas get a minimum cash wage of only $2.63, and have to rely on a $8.37 tip credit to reach the state’s normal minimum wage,
• Colorado get $9.54 in minimum cash wages and have to rely on a $3.02 tip credit,
• the District of Columbia receive $5.05 in minimum cash wages and rely on $10.15 in tip credits to reach the normal minimum, and
• Hawaii get $9.35 in minimum cash wages and have to rely on a $0.75 tip credit.¹⁵

Other states require all employers to pay tipped employees the full state minimum wage. The tips are then received as compensation above and beyond the minimum wage. These states are:

• Alaska,
• California,
• Minnesota,
• Nevada
• Oregon, and
• Washington.¹⁶

In some of these states, there are additional details. For example, in Nevada, employers have to pay a higher wage to tipped employees if they do not offer health insurance.

Other states define “tipped employees” differently than the FLSA. Some examples are:

• Connecticut, which requires at least $10 per week for full-time employees, or $2 per day for part-time workers in hotels and restaurants,
• Massachusetts, which only require $20 in tips per month, and
• Vermont, which requires at least $120 per month.¹⁷

Some states have different rules for businesses that make over a certain amount. Montana, for example, requires a minimum cash wage of $4.00 for business that gross less than $110,000 per year, but $9.20 for those that make more than that.¹⁸

What if my employer is violating the law?

If your California employer is not complying with state minimum wage law or is taking your tips, you have legal recourse. You can sue your employer for violating the state’s wage and hour laws.¹⁹

If you were deprived of your minimum wage, these wage and hour lawsuits could help you recover the wages that you were deprived of, in addition to interest on that amount, as well as attorneys’ fees. You can also recover a civil penalty of:

• $100 for the initial pay period with the violation, and
• $250 for each subsequent pay period.²⁰

If your employer violated California Labor Code 351 LAB and took your tips, they can be charged with a crime. The offense is a misdemeanor that is punishable with up to:

• 60 days in jail, and/or
• $1,000 in fines.²¹

You can also sue your employer for:

• conversion,²²
• violating California’s unfair competition law,²³ and
• breach of implied contract.²⁴

If you do not want to go to such an extent as filing a lawsuit, you can also file a complaint with the California Labor Commissioner’s Office.²⁵ The Office will hold a hearing regarding the alleged tip law violations. If successful, you can recover your unpaid tips.

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