Tip-pooling with management violates FLSA — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Tip-pooling with management violates FLSA

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in Leaders & Managers,Management Training

A restaurant required waiters to pool their tips and share them with busboys and managers who worked the floor. The waiters sued under the Fair Labor Standards Act (FLSA). The employer argued that the arrangement was legal under the FLSA provision that allows tip-pooling "among employees who customarily and regularly receive tips." The managers helped seat customers, delivered food and cleared tables. A district court disagreed. Forced sharing of tips with management is illegal, regardless of whether the managers performed duties that could be subject to tipping. (Chung v. New Silver Palace Restaurant Inc., No. 00-Civ-7353, S.D.N.Y., 2002)

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