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Found that some restaurants promote "free" delivery when total over 60 dollars, as customers we can choose leave no tips, or any amount we want. When the order total is 59.9, it charges 15% as tips as default, and we can increase it. Is that legal in California?

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    Please cite the actual wording of the menu. Jul 18, 2023 at 20:35

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By definition, a tip is at the discretion of the customer, so what you have is a service charge – a service charge is legal. It is legal to offer free delivery for orders over a stated amount, and to charge a percentage as delivery charge for lesser amounts. There is no specific law requiring a business to use the term "service charge" and no law forbidding them to separate the mandatory from the voluntary parts of the service charge / tip. However, if the amount charged is called a tip, it must go to the employee, whereas a "service charge" can go to the business. Therefore, it would be illegal to call it a tip but treat it as a service charge.

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  • when is called as tips, there is no way we know if the driver/chefs share all the amount. and as customers can choose not to pay the tips. Do that mean both are legal if they call it as service charge or if the driver and chefs share the full amount when they call it as tips?
    – Maxfield
    Jul 18, 2023 at 17:41
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    The employees know if they get their tips, and can know if they are tips vs. service charges. So if the employer keeps the employee tips, the employee can file a complaint with the Dept. of Labor. The customer can't actually file a formal complaint.
    – user6726
    Jul 18, 2023 at 19:05
  • yes. understand that part from your first response. The question is: If the owner doesn't update the tips to service charge, but also let the employees keep all the tips. Does the owner break the law of California?
    – Maxfield
    Jul 18, 2023 at 19:39

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