By Antonio Ray Harvey, California Black Media
California Senate Bill (SB) 648, authored by Sen. Lola Smallwood-Cuevas (D–Los Angeles), takes effect on Jan. 1. The law strengthens legal protections for workers against employee tip theft.
The legislation applies to restaurant servers, hotel staff, hairdressers, and other service workers who rely on gratuities to cover their everyday expenses.
Signed by Gov. Gavin Newsom on July 30, 2025, the new law based on a bill authored by Smallwood-Cuevas reinforces safeguards against tip theft by empowering the state’s Labor Commissioner to investigate, issue citations, and pursue civil action against employers who withhold employees’ tips.
A member of the California Legislative Black Caucus (CLBC), Smallwood-Cuevas said SB 648 will prevent workers from being “shortchanged” and that “the consumers will and intention” to show appreciation for their service, or to encourage good future service is actualized in the pockets of those workers.
“Gratuity theft is one of the most common forms of this exploitation, particularly among minimum wage and low wage service workers,” Smallwood said. “In Los Angeles alone, nearly 1 in 55 low-wage workers has experienced stolen tips.”
Tip theft refers to any situation in which an employer or agent collects, takes, or receives a tip or part of a tip that was paid, given to, or left for an employee by a customer.
Smallwood-Cuevas said further that, “Our expectation is that good service deserves a reward. We want to reward and support workers who provide good service. We know that every dollar counts while (they’re) trying to survive.”
The Division of Labor Standards Enforcement (DLSE), which is under the Labor Commissioner, generally has the authority to enforce employment statutes and regulations, either through administrative actions or litigation, according to the California Department of Industrial Relations.
According to Smallwood-Cuevas’s office, a 2017 study discovered that 19.2% of low-wage workers experience minimum wage violations in the state each year.
The study revealed that certain employers steal nearly $2 billion from California workers each year through minimum wage violations.
Another study found even higher losses across California’s major metropolitan areas, including Los Angeles, San Diego, and the Bay Area. Employers were estimated to have stolen an average of $2.3 billion to $4.6 billion in earned wages annually between 2014 and 2023, according to Rutgers’ School of Management and Labor Relations (SMLR).
SB 648 received strong support from several organizations, including the California Employment Lawyers Association (CELA), the California Coalition for Worker Power, the California Teamsters Public Affairs Council, and Courage California.
“Obviously we very much enthusiastically support this bill,” Elmer Lizardi said on behalf of the California Federation of Labor Unions at the April 9 Senate Standing Committee on Labor, Public Employment and Retirement hearing.
Existing law already imposes a range of administrative sanctions, civil fines and penalties, and criminal penalties for violations of employment statutes or regulations.
However, while California law declares that tips are the property of employees, the Labor Commissioner previously lacked the authority to issue citations or impose civil penalties when employers violated these arrangements.
By enabling the Labor Commissioner to act more swiftly, SB 648 provides a more “efficient and accessible” way to recover stolen tips and hold employers accountable for wage theft, Smallwood-Cuevas stated.
The legislation includes a “private right of action and authorizes civil penalties of $250 per violation (and $1,000 for willful violations),” increasing pressure on employers to comply with lawful tip practices.
Smallwood-Cuevas told the Senate Judiciary Committee in April that the lack of enforcement mechanisms left many low-wage workers without accessible options, such as a pathway to private legal action.
“Lawyers wouldn’t take up these cases, and that’s why the state has to step in. Affordability continues to be a great challenge (for low-income workers),” Smallwood-Cuevas said. “(SB 648) also ensures that our most vulnerable workers are not shortchanged.”
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