The little known law found at California Labor Code § 351 was enacted to protect all tipped employees from the over-reaching employers. It prohibits employers from maintaining any tip-pooling policy which requires employees to distribute or share any part of their tips with any owner, manager or supervisor of the business. Thus, any system under which any person with supervisory capacity over the tipped employees can collect or receive any portion of any tips paid, given to or left for another employee is illegal.
Moreoever, the law prohibits employers from accounting for such tips "on the back end" by decreasing or deducting from the wages of an employee who receives gratuities. A tip left by a customer is the "sole property of the employee or employees to whom it was paid, given or left for," regarding of the type of business or the rules imposed by the employer.
This does not mean that all tip-pooling policies are unlawful. A tip-pooling policy that requires employees to share tips with other non-supervisory employees may be perfectly lawful. Typical pooling programs that comply with the law include restaurant policies requiring food servers to share tips with bussers or bartenders, or casino tip pools shared by every card dealer working a particular shift. However, if tips are pooled in any way that allows the fingers of a supervisor, owner or manager into the tip jar, the tipped employees may have a valuable claim for wages, interest and penalties under the Labor Code.