IS TIP POOLING LEGAL?

Restaurant workers often rely on tips for the bulk of their income. Pooling tips is a practice at some establishments in order to compensate staff that does not work directly with the customers. However, the law says that when this is the practice, servers must be paid at the federal minimum wage instead of the lower hourly wage more common for waitstaff. This means if you work at a restaurant and they take everyone’s tips and divide them among the non-supervisory staff, you should be getting paid at least $7.25 an hour.

A tip pool has to be pre-agreed to by everyone participating, and can never include managers or supervisors.  It can include servers, bartenders, bus people, counter workers and kitchen staff. Tipping out is not the same thing as a tip pool.  That is when servers give a percentage of their tips to other workers (such as dishwashers and cooks). This is not illegal unless it includes the management, owners or “house.”

If you work in a restaurant that uses tip pooling and feel that they are doing something illegal, reach out today to have an attorney review your claim for free.