You Can Keep Tips, But Employer May Make You Pay

Question: I drive a bus for a company and have received a lot of compliments from passengers. Sometimes people like to tip me, but the company says I am not allowed to accept tips. Can they legally stop me from collecting tips?

--F.W., Anaheim

Answer: Yes. While California law provides that an employer may not confiscate tips left for employees, nothing in the law prevents an employer from adopting a policy that employees are not permitted to accept tips in the first place. An employer may wish to adopt such a policy in order to prevent its customers from feeling pressured to leave a tip. Thus, if you accept tips from your passengers in violation of your employer’s policy, the tips are yours to keep but you may be subject to disciplinary action by your employer.

--James J. McDonald Jr., Attorney, Fisher & Phillips, Law instructor, UC Irvine

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Question: I operate a small sales company that has one full-time and one part-time employee. If my partner and I hire a part-time sales support worker--at five hours a day, five days a week--at a flat hourly salary of about $15 can we avoid having to pay sick leave, vacation pay or other benefits?

--H.E., Anaheim

Answer: State and federal laws do not require employers to pay employees for time away from work. Therefore, an employer does not have to provide pay for sick leave or vacations unless the employer agreed to do so.

There are some benefits which are mandated, however. California requires you to provide workers’ compensation insurance and to make payment into the state’s unemployment insurance system. Further, federal law requires participation in Social Security.

--William H. Hackel III, Employment law attorney, Spray, Gould & Bowers *

Question: I am a secretary working a night shift. My manager wants me to come in from 9 a.m. to noon, but I am unable to do that because of family responsibilities. She says that if I don’t come in I will be docked those three hours. I am willing to come in and put in three extra hours on my regular shift or apply overtime to those three morning hours. What can I do?

--S.M., Laguna Hills

Answer: Generally a secretarial position is paid on an hourly basis. Therefore an employer is obligated to compensate employees only for hours worked. If you haven’t worked those three extra hours, you won’t be “docked.” You won’t have earned the pay and will not be compensated. It is unclear from your question when your company’s 24-hour workday begins and ends, or if your night shift is a typical eight-hour shift.

California regulations require an employer to pay hourly employees overtime for all hours worked beyond eight hours in a day or more than 40 hours in a week. Currently there are legislative initiatives to repeal the eight-hour overtime rule in California to permit work flexibility for both employee and employer alike. Unless this occurs, your employer will continue to be obligated to pay time and one-half for those three extra hours beyond a regular eight-hour shift worked. There may even be an obligation to pay overtime for the three hours worked between 9 a.m. to noon, dependent on when your 24-hour workday begins and ends.

Please remember that employers have a right to schedule employees as needed to accomplish the work load, as long as the pay obligations and health and safety rules are satisfied. If your family commitments conflict with the requested schedule and if the employer can’t accommodate your request, you may need to seek other employment.

--Elizabeth Winfree-Lydon, Senior staff consultant, The Employers Group

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Question: Our facility is about to be purchased by another corporation and, as a result of the transition, all existing vacation will be cashed out. The new company has a policy that all eligible employees must complete 90 days of employment before they begin accruing vacation hours.

Is it legal to withhold accruals for 90 days? If so, how does this affect exempt employees who are supposed to be paid for a full week regardless of the number of actual hours they work?

--L.F., Yorba Linda

Answer: As to both exempt and non-exempt employees, an employer may choose not to provide any vacation benefits, or may decide that employees do not accrue vacation benefits until they have been employed for some initial period of time. Unless such a waiting period amounts to a “subterfuge,” it is permitted under the law. Subterfuge could be found to exist if the employer adopts a vacation policy that does not allow an employee to accrue vacation for the first three months, then allows accrual at an accelerated rate for a short period of time thereafter. Under such circumstances, the labor commissioner would likely determine that employees actually did accrue vacation in the first three months.

I interpret your question regarding exempt employees to be asking whether an employer may dock the salary of an exempt employee if, during the 90-day waiting period, that employee takes a day or more of vacation. The answer is yes. An employer may make deductions from salary if the employee is not at work for a day or more for personal reasons, other than sickness or accident. In addition, the absence would likely be deemed unauthorized and could subject the employee to disciplinary action.

--Josephine Staton Tucker, Employment law attorney, Morrison & Foerster

Question: I’m a full-time security guard for a company that has a contract at a small television station in the San Fernando Valley. The company I work for was bought out about two years ago, and the current owners have a horrible vacation policy: We don’t got any paid time off. When they took over, we were told the new owners would follow the employee policy manual of our previous management, with the exception of providing paid vacations. We can take unpaid vacation time, but no one can afford it. Can they just take away vacations like that?

--J.M., Perris

Answer: There is no legal requirement that an employer provide any vacation time at all. Therefore, you probably no longer have a right to any vacation time. However, in some circumstances, the employee policy manual developed by previous management might still be binding on the current owners. To find out exactly what your rights are, you should consult an attorney who is experienced in employment law. For help in finding an attorney, call the Orange County Bar Assn. Referral Service at (714) 835-8811.

--Calvin House, attorney, Fulbright & Jaworski, Adjunct professor, Western State University College of Law