California Restaurant Workers Rights:  Are You Getting Paid for All Hours and Tips?

Restaurant employees are often the victims of underpaid wages, tip pooling, and overtime pay issues. From reduced work hours to wage and hour violations, restaurant workers are often unaware of their employment rights in California and fall victim to abuse. Here are the most common employee rights violations we see when handling employment law cases in California.

1. Minimum Wage for Tipped Employees in California

No separate “tipped minimum wage”—Unlike some states, California does not allow employers to pay a lower wage because of tips. All employees must be paid at least the full state minimum wage before tips:

2025 California Minimum Wage

• $20.00/hour for national chain restaurants.
• $16.50/hour (statewide for all employers).
• $17+ in some cities (e.g., Los Angeles, San Francisco).
• Tips are extra and belong 100% to the employee—employers cannot take a cut.

Job losses and reduced work hours have been an issue since AB 1228 passed in California

After the implementation of the $20 minimum wage law for fast food workers (AB 1228) in April 2024, many restaurant workers experienced a reduction in their weekly hours—up to five hours less per week, amounting to as many as 250 lost hours or nearly two months of work annually for some non-tipped restaurant employees.

2. Overtime Pay for California Restaurant Workers

Some of the strictest labor laws in the United States govern overtime pay for restaurant workers in California.

Daily Overtime:

Time-and-a-Half (1.5x Pay):

Employees must be paid 1.5 times their regular hourly rate for:

• Hours worked over 8 hours in a single workday
• Hours worked over 40 hours in a single workweek
• The first 8 hours on the seventh consecutive day of work in a workweek

Double Time (2x Pay):

Employees are entitled to double their regular hourly rate for:

• Any hours worked over 12 hours in a single workday
• Any hours worked over 8 hours on the seventh consecutive day of a workweek

Weekly Overtime:

• 1.5x pay after 40 regular time hours in a week.
• 2x pay after 8 hours on the seventh consecutive day of work in a workweek.

Example: A server works 9 hours daily, Monday through Friday, and then 5 hours on Saturday, and gets 40 hours of regular time pay and 5 hours of overtime pay (at 1.5x pay). The overtime is the one hour extra each day plus the 5 hours on Saturday, as he/she already worked 40 regular-time hours.

Overtime is calculated daily or weekly and employers must pay overtime even if it was not pre-approved. Though workers can be disciplined for unauthorized overtime, they cannot be denied overtime pay. Restaurant employers must carefully track shift lengths and weekly schedules to remain compliant and avoid wage violations.

3. Tip Pooling & Tip Credit Rules in California

In restaurants and other hospitality establishments, tip pooling is a practice whereby all tips received during a shift are consolidated into a shared pool and disbursed to qualified staff members per a preset formula or regulation.

This practice is designed to promote fairness by ensuring that tips are shared among those who directly interact with customers (like servers and bartenders) and those in supporting roles who contribute to the customer experience but don’t receive direct tips.

Legal requirements: Under California law, managers and owners are prohibited from participating in tip pools, and thorough recordkeeping is necessary. California has strict eligibility rules that companies must follow.

• Tip pooling is allowed only among non-supervisory staff (e.g., servers, bussers, bartenders).
• Managers & owners CANNOT take tips from the pool.
• No “tip credit” allowed—employers cannot use tips to meet minimum wage obligations (unlike federal law).

4. Meal & Rest Breaks for Restaurant Workers

• 30-minute unpaid meal break if working more than 5 hours.
• If not given a timely and complete one, the worker is owed one extra hour of pay per day with a violation.
• 10-minute paid rest break for every 4 hours worked. Same penalty per day as for meal period

Common Meal and Rest Break Violations:

• “You can’t take a break during the lunch rush.” (Still illegal)
• “Just eat when it’s slow.” (Still counts as a missed break.)

5. Common Wage Theft Violations in Restaurants

• Illegal Deductions: Employers cannot deduct credit card fees, walkouts, or broken dishes from tips/wages.
• Working Off the Clock: Side work (rolling silverware, cleaning) must be paid.
• Mandatory meetings/training must be paid.
• Unpaid overtime: This frequently occurs in fast-food restaurants.
• Retaliation: Experiencing retaliation for reporting wage and hour issues.
• Wage theft: This practice is a widespread violation.
• Time Shaving: Employers rounding down clock-in/out times illegally.
• Misclassification: Imporperly classifying a regular employee as a 1099 worker.

In 2024, at least one in every four fast food workers in Los Angeles was paid illegally below the minimum wage, costing the average victim nearly $3,500 annually and amounting to $44 million in lost wages across the region. Research has shown that 88% of California fast food workers don’t understand their basic rights on the job. 

What To Do If Your Worker’s Rights Have Been Violated

If you suspect you are being underpaid, overworked, or subjected to other violations on the job, contact an experienced California employment law attorney to secure your rights. An attorney specializing in employee rights will have the knowledge and resources to protect you.