How to tip pool among your restaurant staff

Have you ever wondered how restaurant workers survive on low salaries and minimal benefits? They can make their jobs bearable due to the tips they receive from customers. Many restaurants have tip pooling systems in place. This blog will discuss restaurant tips and tip pooling. Is tip pooling legal?

What is tip pooling?

A tip in the hospitality industry is a small amount that a customer pays to cover their meal. The staff is responsible for the customer’s experience. Tip pooling allows restaurant staff to share these tips so that everyone gets a fair reward.

This involves taking each staff member’s tip and pooling it at the end of each shift before dividing it. In the following sections, we will discuss the division of information. Not all employees are eligible to participate in the tip pool.

Only customers who give tips directly to restaurant managers are allowed to keep them a tip. Restaurant managers cannot keep a tip in any other circumstances. BOH staff are also not eligible for the tip pool because they do not interact directly with guests. They don’t receive a tip, even though they contribute to the guest experience through their work in the kitchen.

Tip credit vs. tip pooling: What is the difference?

Although the tip pooling process may seem simple, it isn’t always easy. Employers (restaurant owners) must have a fair way of distributing tips. Here is where tip sharing and tip pooling become distinct.

Tip pooling is putting all tips into a single pool and then sharing it equally. However, tip-sharing works on a percentage basis. This involves tipping employees to share a portion of their tips with others while keeping a certain percentage for themselves. This refers to non-tipped staff such as the host/hostess and dishwashers, cooks, or other kitchen staff.

Is tip-pooling legal?

Restaurant staff may be required to tip-pool or share tips under the Fair Labor Standards Act (FLSA). The FLSA was updated in 2018 because dividends account for a significant portion of restaurant staff’s income. This new rule states that employers, managers, and supervisors can no longer keep employees’ tips for any reason, even if they don’t claim tip credits.

The FLSA does not specify a fixed percentage or amount to be split by tippers in a tip pool. It is up to the restaurant manager to decide how much will be divided and who will get the tips. It is also important to distribute the pooled tips equally to all staff members within the pay period.