California Governor Newsom recently signed Senate Bill (SB) 648, which authorizes the state’s Labor Commissioner to investigate and issue a citation or file a civil action for gratuities taken or withheld in violation of the Labor Code. This enforcement authorization will take effect January 1, 2026.

The Labor Code defines wage theft as employers withholding any money owed to workers, including tips. Previously, although the Labor Commissioner could investigate wage theft, it lacked the authority to issue or recover citations against employers respective to gratuities. SB 648 ensures that citation procedures mirror those used for minimum wage violations.

Employers should familiarize themselves with what is defined as a tip or gratuity under the Labor Code to avoid inadvertent violations of the Labor Code and face investigation or citation.

If you have questions about the handling of tips or gratuities or related issues, please contact a Jackson Lewis attorney to discuss.