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In California, the minimum wage for servers in 2023 is $15.50 per hour.
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.
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:
As a result, employers still have to pay the minimum wage rate to workers who frequently receive tips or other gratuities, like:
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.
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 2023 is $15.50 per hour. 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:
Employers cannot contract around these minimum wage laws. You cannot legally waive your rights to be paid a minimum wage.
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:
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:
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:
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:
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
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:
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:
You can also sue your employer for:
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.
A former Los Angeles prosecutor, attorney Neil Shouse graduated with honors from UC Berkeley and Harvard Law School (and completed additional graduate studies at MIT). He has been featured on CNN, Good Morning America, Dr Phil, The Today Show and Court TV. Mr Shouse has been recognized by the National Trial Lawyers as one of the Top 100 Criminal and Top 100 Civil Attorneys.