Human Resource Blog

Missouri Tipped Manager

	Compensation
Employee Payroll Action Form W-4 Employee Withholding Allowance Cert. Employee Payroll Status/Change Form Direct Deposit Form Total Compensation Summary

	Workplace Management
Attendance Organizer for 2008, 2009, or 2010 Employee Warning Notice Employee Counseling Report Performance Improvement Plan Employee Performance Evaluation Form Employee Final Warning Notice Separation Checklist Harassment Prevention Kit

Can restaurant employees be forced to share their tips with the restaurant manager, under Missouri or federal law?

It is not clear if it would be a violation of federal law for a manager to share tips. It may be illegal or not, depending on whether or not the manager performed certain other kinds of work, and how employees were paid.

Here’s a link to a federal publication that may clarify the subject. The applicable law is the FLSA, or Fair Labor Standards Act of 1938.

The U.S. Department of Labor’s policy is that employees have the right to keep all the tips they earn. Incidentally, the federal minimum wage for workers who earn more than $30 monthly in tips is $2.13 an hour, well below the regular minimum wage. Higher minimum wages for tipped workers have been established in some states.

If a manager is the owner and the business sets “service charges” in lieu of tips, then that manager could keep the money. Under federal law, service charges are considered gross revenue, and belong to the business owner. He or she may keep all of it or decide to share it in any way he or she wishes. Many establishments automatically put service charges on the bill in place of a tipping system. Under those conditions, however, the employer must pay the standard, full minimum wage.

There are many establishments where a “tip pool” has been set up, where tips are divided among workers. A valid tip pool divides those tips among the kinds of employees who would normally receive tips. That could include, for example, service bartenders, bus persons, servers, and bellhops.

Usually, a tip pool that included a salaried manager would not be considered valid, unless the manager was also performing tasks that are customarily tipped, such as busing or serving. Nevertheless, it is likely that 90% of managers would refuse a share of the tips. Federal law is not clear about whether it is legal for a manager to accept a share of the tips. Some states, however, have passed their own laws addressing the issue of tip pools.

Some servers “tip out,” or share their tips with bartenders or bus persons. JH