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In this regard, the courts have validated policies that distributed tips among employees who provide "direct table service" or who are in the "chain of service" provided that employee in the chain of service bears a relationship to the customers' overall experience. No, a tip is a voluntary amount left by a patron for an employee.

A mandatory service charge is an amount that a patron is required to pay based on a contractual agreement or a specified required service amount listed on the menu of an establishment.

An example of a mandatory service charge that is a contractual agreement would be a 10 or 15 percent charge added to the cost of a banquet.

Such charges are considered as amounts owed by the patron to the establishment and are not gratuities voluntarily left for the employees.

The employer may not make any deduction for credit card processing fees or costs that are charged to the employer by the credit card company from gratuities paid to the employee. Labor Code Section 351 provides that "every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for".

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