Senate Bill 648 Addressing Tip Theft

Governor Newsom signed Senate Bill (SB) 648, closing a longstanding enforcement gap in California’s wage and hour law. While the Labor Code already prohibits employers from taking or withholding employee tips, the Labor Commissioner previously lacked authority to issue citations for violations.

Effective January 1, 2026, SB 648 authorizes the Commissioner to investigate complaints of tip theft and pursue civil penalties or legal actions directly against offending employers. This new enforcement tool underscores California’s continued focus on wage integrity and creates additional liability exposure for restaurants, hospitality employers, and any business where gratuities are part of compensation.