California Tipped Minimum Wage: 2025 Rates, Laws, and Employee Rights

California servers must receive the full state minimum wage of $16.50 per hour in 2025, plus any earned tips. Employers cannot take tips, pay below the minimum wage, or violate California Labor Code protections for tipped workers.

By Brad Nakase, Attorney

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Have a quick question? We answered nearly 2000 FAQs.

Table of Contents

1. Introduction

2. Are servers subject to California’s minimum wage regulations?

3. California minimum wage

4. Is the tipped minimum wage in other states lower or higher?

5. What happens if my employer breaks the law?

6. Can servers without documentation be paid the California’s tipped minimum wage?

Introduction

Waiters in California will be paid a minimum wage of $16.50 an hour in 2025.

Some counties and cities have higher minimum wages.

In California, waiters and other workers have the right to the minimum wage along with tips, unlike in several other states.

Are servers subject to California’s minimum wage regulations?

Yes, tipped workers, including waiters, servers, bartenders, & valets, are subject to California’s minimum wage statute.

According to California Labor Code 351 LAB, your tips are all yours. A tip is yours if you get it from a customer. Importantly, this implies that the company you work for is prohibited from:

Keeping your tip.
Owners, managers, and supervisors accepting your tip or utilizing it as a tip incentive to support paying you below the minimum wage.

A tip is any amount of cash that a customer leaves for a worker that isn’t needed to pay for the services or products that the employee has rendered.

California minimum wage

The minimum wage in California is $16.50 an hour. Most localities/cities have increased the minimum wage (1st January 2025).

California has some of the most stringent minimum wage regulations in the United States of America. Since 2017, it has been gradually rising annually.

Companies are unable to negotiate around these minimum pay regulations. Furthermore, it is illegal to give up your right to a minimum wage.

Is the tipped minimum wage in other states lower or higher?

California’s tipped minimum wage for workers is higher than in most states.

1. Law as per the Federal Government

The minimum wage stands at $7.25 an hour (Federal law). The minimum wage is not applicable to tipped employees (as per FLSA).

Rather, employers are merely required to pay them $2.13 an hour, which is the minimum cash rate. The worker’s gratuities can subsequently be applied as a tip credit by the employer toward their minimum wage requirements.

The Federal Labor Standards Act (FLSA) stipulates a minimum cash salary of $2.13 and permits a tip credit of $5.12 to meet the minimum wage set by the federal government of $7.25.

2. States with the worst tipping rates

Certain states do not pay tipped employees more than the minimum wage set by the federal government. Among these states are:

Alabama,
Kansas,
Georgia,
North Carolina,
Mississippi,
Utah, and
Texas

3. States in the middle for tipped workers

Others use a tip credit to make up the difference between the standard state minimum wage and the greater minimum cash rate for tipped employees. This approach does not completely reach the minimum pay for servers. As an illustration, servers in:

Hawaii receives a minimum cash salary of $12.75 and has to depend on a $1.25 tipping credit to attain the state’s standard minimum wage, whereas Arkansas receives a minimum cash pay of only $2.63 and must depend on an $8.37 tipping credit.

4. States with the highest tipping rates

In other states, all employers are required to pay the entire statutory minimum wage to tipped employees. The tips are subsequently paid out as extra money on top of the minimum wage. These states are:

Alaska,
Minnesota,
California,
Oregon,
Nevada, and
Washington.

There are further specifics in a few of these states. For example, if a business in Nevada does not provide health insurance, they are required to give tipped workers a higher income.

5. Additional differences between states

Other states have varying definitions of “tipped employees,” but the FLSA defines “tipped employees” as those who get more than $30 in gratuities per month. Here are a few examples:

Vermont demands at least $120 in tips every month, while Massachusetts only mandates $20.

Businesses that earn more than a specific sum are subject to different regulations in some states. For example, Montana mandates a minimum cash pay of $9.95 for companies making more than $110,000 annually and $4.00 for those making less.

What happens if my employer breaks the law?

Let’s say your California company is collecting your tips or is not adhering to California’s tipped minimum wage law. If so, you may file a lawsuit against your employer to recoup your lost income, along with interest and legal costs. Additionally, you may be awarded an administrative penalty of $100 for the first pay period in which the infraction occurred, and $250 for each additional pay period after that. It is imperative for employers to adhere to California’s tipped minimum wage laws.

1. Criminal prosecution

In case your employer took your tips contrary to the law, they can be criminally prosecuted (California Labor Code 351). The offense carries a maximum penalty of:

One thousand dollars in fines, and/or
Sixty days in jail.

2. Additional legal options

Apart from filing a wage & hour lawsuit, you may also seek legal action against your employer for conversion, breach of implied contract, and violation of California’s unfair competition legislation.

You can also register a grievance with the California Labor Commissioner’s Office if you don’t want to take legal action. A hearing concerning the suspected breaches of the tip law will be held by the Office. You can get the unpaid tips back if you’re successful.

Can servers without documentation be paid the California’s tipped minimum wage?

Indeed. You are subject to California’s tipped minimum wage rules if you happen to be an unauthorized immigrant serving customers. Additionally, the following laws safeguard you:

AB 263 prohibits employers from exploiting your illegal status as a means of intimidation when you seek your labor entitlements.
AB 450, which grants you the right to due process during audits of I-9 work sites; and
If a company threatens you because of your illegal status, they could be held criminally accountable under AB 524.

As per California’s tipped minimum wage laws, you have the exact same legal options as outlined in the preceding section if you’re currently undocumented and have been denied your wages.

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California Tipped Minimum Wage: 2025 Rates, Laws, and Employee Rights

Introduction

Are servers subject to California’s minimum wage regulations?

California minimum wage

Is the tipped minimum wage in other states lower or higher?

What happens if my employer breaks the law?

Can servers without documentation be paid the California’s tipped minimum wage?

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