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Kansas Tipped Manager

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

There are a few conditions under which it may be legal. Otherwise, it would probably be a violation of the FLSA, or Fair Labor Standards Act of 1938, which governs questions such as this and the federal minimum wage law. According to federal law, employees are normally entitled to keep all the tips they earn. Here’s a link to a federal publication that may make the issue clearer.

What are the conditions that could allow for a procedure in which a manager takes a share of the tips? One possibility is that the manager performs some of the duties of service personnel and is in a valid “tip pool.” Another is that the establishment has a compulsory service charge rather than a tipping tradition.

A valid tip pool is one in which all of the tips are shared between any workers who customarily receive tips – bellhops, service bartenders, bus persons, servers, and the like. Sometimes, servers “tip out,” or share a percentage of their tips with bus persons or bartenders. Normally, if a tip pool included a manager it would probably not be valid. But if the manager were working part of the time as a bus person or service bartender, then that might be an exception. Still, probably 90% of managers would refuse to take a share. Would a manager who took such a share be in violation of federal law? It is not clear.

Some establishments do not have tipping, but rely instead on a compulsory service charge routinely added to the bill, very often for large groups and banquets. This is considered revenue under federal law, and not tipping. Consequently, the employer is entitled to keep all of the money or divide it among service people if he or she chooses. Employees working under service charges, however, must be paid the minimum wage. Employers need not pay the minimum wage if workers are earning $30 a month or more in tips. In those cases, the federal minimum is $2.30 an hour, although many states have set their own minimum rates. JH