Can My Boss Take my Tips?

Question: Can Managers Take Tips?

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.

Managers Participating in a Tip Pool

The fundamental rule of tips is that they belong to employees, not to the company. Under federal law, employers may not take any portion of an employee's tips for themselves, nor may they allow managers or supervisors to take part in a tip pool.

However, the law does not define managers or supervisors clearly. Someone who has the authority to hire and fire employees, discipline employees, set wages and hours, and make other important decisions on behalf of the company are clearly not allowed to share in tips pools.

But 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). Ultimately it comes down to the employee's actual duties, not their title. The more supervisory duties they have, the less likely they are able to legally participate in a tip pool.

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.

See our page on state laws for tipped employees to find out more.