I recently experienced a dine and dash (or a bad credit card authorization). I was wondering when can I legally recover the tip from the employee who served the customer and can I deduct the cost of the meal from the server’s wages?

Legal Partner Bruno Katz: An employer cannot deduct wages or require reimbursements from employees or recover the tip unless the employer can prove that the “shortage, breakage or loss [was] caused by the dishonest or willful act, or by the gross negligence of the employee.” It is illegal under California law to do so, as the loss is considered a risk of doing business caused by the employer electing to accept credit cards and is not caused by the employee.

For more on wage deductions, see our Industry Insight.


