What are the rules for a tip pool arrangement? Find out on Paywizard.org.
The Employers Guide to the Fair Labor Standards Act (FLS) includes a
good article to understand tip pooling rules. I've attached it for you.
The Law says this about Tip Pooling:
The FLSA permits employees to pool their tips. Moreover, an
employer can require employees to pool their tips. Employers are
generally free to determine the tip pooling arrangement among the
employees in the tip pool.
See in the next links more about paydays and what the IRS says about employees who receive tips, and withholding taxes on tips by employers and employees.
There are two important exceptions for tip pooling:
Exception tip pooling 1:
A tip pooling arrangement is invalid if an employee must relinquish
more than a customary and reasonable amount of tips to the pool. The
law doesn't question contributions to a pool not exceeding 15% of an
employees tips.
Exception tip pooling 2: Only those employees working in
occupations in which employees customarily and regularly receive tips
can participate in a tip pool. These occupations include (but are not
limited to) waiter, bellhop, busboy, counter personnel and service
bartender.
Employees who have not customarily
and regularly
participated in a tip pooling arrangements cannot participate in a tip
pool. These occupations include (but are not limited to) dishwashers,
cooks,
chefs, and janitors.
You've to check all the boxes to see if there's a violation of the tip rules. So find out:
- how much tip do you make daily? Is your boss withholding more than 15%? Keep a list.
- are all the members of tip pool entitled to share in the pool according to the FLSA ?