Tip-Pooling Issue

UPDATED: Sep 30, 2022

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Tip-Pooling Issue

I work at a restaurant as a server. We recently began a tip-pool with the non-tipped kitchen staff of 1 of our food sales for each server per shift. The tip-out is ‘voluntary’ but I was told there would be consequences when I refused to partake in the tip-out for the kitchen staff. These people get paid by the hour and some are on salary. Is this legal?

Asked on January 16, 2017 under Employment Labor Law, Colorado


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Restaurants, etc. whose employees receive tips must allow them to keep their tips. However, there is an exception - “tip pools” in which tips are pooled and distributed among various other employees. Tip pooling is legal so long as the tipped worker is paid the prevailing minimum wage in addition to tips, and the tip pool is not shared with management or supervisory employees, or with employees who do not generally interact with customers (e.g., “back of the house” employees such as dishwashers, kitchen staff, salad preparers, chefs, etc.). Accordingly, the only staff members who are entitled to share in the tip pool are “front of the house” employees who serve customers directly such as waitstaff, bussers and hosts/hostesses. At this point, you can contact your state's department of labor for further information.
The requirement that employees keep their tips also may apply to involuntary “service charges” or “automatic gratuity charges.” Therefore, employers may be prohibited from mandating tip sharing of these among employees.
It also is important for employees to consider whether they are being paid the server minimum wage even when they are doing non-tipped work. For example, a server required to do cleaning, maintenance or food preparation work – work that does not generate customer tips – must be paid the full 2014 minimum wage of $8.00/hour for this work.
Finally, overtime pay laws entitle tipped employees to premium pay at the rate of “time and one-half” the full minimum wage ($8.00/hour) rather than “time and one-half” the server minimum ($4.98/hour) for each hour worked over 40/week or 12/day. If your employer is violating these rules, you (and other employees) may be entitled to a significant award of back pay.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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