312 | 2023 Cal-Peculiarities ©2023 Seyfarth Shaw LLP www.seyfarth.com permits patrons to pay gratuities by credit card shall pay the employees the full amount of the gratuity that the patron indicated on the credit card slip, without any deductions for any credit card payment processing fees or costs that may be charged to the employer by the credit card company. Payment of gratuities made by patrons using credit cards shall be made to the employees not later than the next regular payday following the date the patron authorized the credit card payment.”). 412 Lab. Code § 351 (employer shall not “require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer”). See Henning v. IWC, 46 Cal. 3d 1262 (1988) (“tip credits” allowed under federal law forbidden under California law). A violation is an unfair business practice, making recovery possible, as a matter of restitution, under California’s Unfair Competition Law, B&P Code § 17200. Application Grp., Inc. v. Hunter Grp., Inc., 61 Cal. App. 4th 881, 907-08 (1998). 413 Lab. Code § 351 (“Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.”). Cf. Avidor v. Sutter’s Place, Inc., 212 Cal. App. 4th 1439 (2013) (permitting tip pooling among card dealers, casino hosts, porters, card control employees, and housekeeping employees where dealers allocated 10% of tips to pool and no employee in pool was an “agent” of the employer); Leighton v. Old Heidelberg, Ltd., 219 Cal. App. 3d 1062 (1990) (permitting tip pooling among waiters, buspersons, and bartenders, where all participants gave direct service to customer and the allocation of 15% of waiter’s tip to busperson and 5% to bartender accorded with “industry practice”). 414 See Avidor, 212 Cal. App. 4th at 1451 (citing Lab. Code § 350). 415 Lu v. Hawaiian Gardens Casino, Inc., 50 Cal. 4th 592 (2010) (Labor Code § 351 does not provide a private right to sue, as violation of a statute does not necessarily create a private cause of action; instead, a right to sue must be conferred by Legislature in either statutory language as shown in legislative history). 416 Id. at 603-04 (“To the extent that an employee may be entitled to certain misappropriated gratuities, we see no apparent reason why other remedies, such as a common law action for conversion, may not be available.”). 417 O’Grady v. Merchant Exchange Prods., Inc., No. A148513 (Cal. Ct. App. Oct. 31, 2019) (reversing trial court’s sustainal of the defendant employer’s demurrer). 418 Id. at 780-81. 419 Lab. Code § 351. 420 Labor Code section 227.3 provides: “Unless otherwise provided by a collective bargaining agreement, whenever a contract of employment or employer policy provides for paid vacations, and an employee is terminated without having taken off his vested vacation time, all vested vacation shall be paid to him as wages at his final rate in accordance with such contract of employment or employer policy respecting eligibility or time served; provided, however, that an employment contract or employer policy shall not provide for forfeiture of vested vacation time upon termination. The Labor Commissioner or a designated representative, in the resolution of any dispute with regard to vested vacation time, shall apply the principles of equity and fairness.” 421 Suastez v. Plastic Dress-Up Co., 31 Cal. 3d 774 (1982). 422 Choate v. Celite Corp., 215 Cal. App. 4th 1460, 1462, 1467 (2013) (employer owed terminated employees vacation pay earned on a pro rata basis even though the CBA affirmatively addressed vacation payments upon termination, and limited vacation pay for terminated employees to the vacation allotment for the year of termination, because the CBA did not specifically “mention either the statutory protection being waived or, at a minimum, the statute itself”). 423 Suastez v. Plastic Dress-Up Co., 31 Cal. 3d 774 (1982). 424 Lab. Code § 227.3. 425 Mills v. Target Corp., 2023 WL 2363959 (9th Cir. Mar. 6, 2023).. 426 Henry v. Amrol, Inc., 222 Cal. App. 3d Supp. 1 (1990). 427 Boothby v. Atlas Mechanical, Inc., 6 Cal. App. 4th 1595 (1992). 428 The November 22, 2005, withdrawal of the offending opinion—DLSE Opinion Letter 1993.05.17, at 2 (“a worker must have at least nine months after the accrual of the vacation within which to take the vacation before a cap is effective”)—is noted at www.dir.ca.gov/dlse/OpinionLetters-Withdrawn.htm (visited May. 26, 2022). See also DLSE Enforcement Policies and Interpretations Manual § 15.1.4.1 (vacation policies providing “that all vacation must be taken in the year it is earned (or in a very limited period following the accrual period) are unfair and will not be enforced by the Division. (See the detailed discussions of these issues at O.L. 1991.01.07 and 1993.08.18).”). 429 California employers can impose a waiting period before any vacation pay begins to accrue. Minnick v. Auto. Creations, Inc., 13 Cal. App. 5th 1000, 1007-09 (2017) (upholding dismissal of vacation-pay claim by employee leaving employment after six months, where policy stated that no vacation is earned during the first year of employment; employers can “front-load” vacation at the beginning of the second year of employment, before the vacation is fully earned, while providing that an employee who leaves employment during the second year will receive only the vested portion of vacation pay); Owen v. Macy’s, Inc., 175 Cal. App. 4th 462, 472 (2009) (denying claim for vacation pay for employee terminated during first six months of employment, where employee handbook stated that the amount of vacation earned during the first six months of employment is zero). 430 DLSE Opinion Letter 1998.09.17, at 3 (citing California State Employees’ Ass’n v. State of California, 198 Cal. App. 3d 374 (1988) (salary deductions to recoup prior overpayments violated attachment and garnishment laws)). 431 DLSE Opinion Letter 1987.07.13-1, at 1. 432 197 Cal. App. 4th 1505 (2011). 433 Id. at 1522 (“we are not persuaded that employers must limit sabbaticals to upper management or professional employees”).
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