Understanding how gratuity works in California is essential for any employer with tipped staff. While tipping is a major part of the service industry and a core component of many employees’ income, state and federal laws govern how tips must be handled, who can share in a tip pool, and what employers are allowed—or not allowed—to do with gratuity. From mandatory tip-pooling policies to service charges and credit card processing fees, employers must navigate several important rules to remain compliant. This article breaks down key considerations to help you manage tipped employees lawfully and effectively.

Classifying workers correctly has always been a complex issue for California employers—and the stakes are now even higher. Following the landmark Dynamex ruling, the standard for determining who qualifies as an independent contractor has tightened significantly. This means fewer workers will meet the definition, and employers must reassess their practices to avoid costly penalties. Below is a breakdown of the new “ABC Test” and how it differs from prior classification rules.

With immigration enforcement activity increasing across California, employers must be ready long before ICE shows up at the door. From updated I-9 verification requirements to new state laws restricting cooperation with immigration agents, businesses face serious compliance obligations—and costly penalties for missteps. This guide outlines essential information employers need to know to protect both their organization and their employees.