In a previous blog I wrote about the Starbucks lawsuit regarding supervisors getting a share of the tip jar. The San Diego Superior Court is not in agreement with Starbucks.

Starbucks insists that the shift supervisors are eligible to receive a share of the pooled tips because they often work the counter in addition to other responsibilities. However, the court has decided that the shift supervisors also direct the work of the baristas and that makes them ineligible.

California law states that managers, agents, or owners of businesses can’t share the tips. The shift supervisors were agents of the business, according to the court.

Needless to say, Starbucks will fight this. However, for now, the baristas have won $105 million. This is the combined amount of $86.6 million in tips that had been given to supervisors, plus $19.1 million in interest. The money represents an eight-year period of baristas and supervisors sharing tips.

What should you take away from this court decision? Mostly to remember that, in California, knowing you’ve classified your employees properly is important. Know the law or talk with someone who does.

Even if your company doesn’t have a tip jar, you probably have exempt employees. The state doesn’t feel making an employee exempt (from overtime) is a benefit. Instead, California wants to make sure you haven’t taken away a benefit … namely, overtime pay. There are tests you can use to determine the proper classifications and they really help if you are totally honest with your answers.

So, if you’ve stretched the rules to make someone exempt you really should rethink it. Or you can wait until the day that employee gets mad about something and decides to sic the California Labor Board on you.