Should my supervisor be sharing tips?

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Question:

I work for a coffee chain, and we share the tips from the counter jars at the end of the shift. Our manager takes a share just like everyone else, but he almost never helps customers or even steps out of the back room. Is this legal? 

Answer:

Tip pooling arrangements have always been a source of controversy, whether the tips start out together, as in your counter jars, or employees each have to chip in a share of their tips to a communal pot. Tip pooling is legal, but only if certain requirements are met. In your case, it sounds like your manager probably shouldn't be taking a share of tips. 

Under federal law, employees can be required to share tips only with other employees who serve customers and receive tips. In other words, the purpose of a tip pool is to share tips among all tipped employees, not to give tips to employees who otherwise wouldn't receive them. On this basis alone, your manager might not be entitled to a share of the tip jar, if he never actually serves customers. 

More importantly, however, is the fundamental rule of tip pools: No employers are allowed in the pool. Tips belong to employees, not to the company. And, under the Fair Labor Standards Act (FLSA), the federal law that governs wages and hours, "employer" includes not just the owner or officers of a company, but anyone who acts in the employer's interests regarding an employee. In other words, managers count as employers who can't share in a tip pool. 

However, whether this rule applies to a particular workplace depends on the manager's job duties. Plenty of employers refer to low-level employees as "assistant managers" or "shift supervisors," without giving the employees the authority that would ordinarily go along with such a title. These employees typically do much of the same work as line employees, with a few extra responsibilities (such as scheduling, deciding when employees may take their breaks, and so on). Despite their name, these employees probably can share in a tip pool, because they aren't true managers as the law intends the term. 

Many states have their own laws about tips and tip pooling -- including rules about precisely which employees may share in a tip pool and which employees count as managers who cannot share tips. To find out your state's rules, contact your state labor department. (Select your state from the list at our Wage & Hour Laws page for contact information.) 

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