Can restaurant owners split tips with their employees?

paying the restaurant check
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Can a restaurant owner share tips with us when she works alongside us?

– Server; Santa Rosa, Calif.


No. Owners and managers often bemoan that when they jump in to support front-of-house staff, they should be tipped accordingly. After all, goes the rationale, they are doing the same work as the server, bartender, busser or other employee they are assisting.

While it may make sense, my advice is not to do it. First, it is unlawful in most cases and can result in large penalties. In your state of California, for example, “Labor Code Section 351 provides that ‘every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.’ The section has been interpreted to allow for involuntary tip pooling so long as the tip pooling policy is not used to compensate the owner(s), manager(s) or supervisor(s) of the business, even if these individuals should provide direct table service to a patron or are in the chain of service to a patron.”

Secondly, it will anger and distance tipped employees, who are working without a predictable salary. Even if it seems unfair that a manager is helping a table on a busy night and the entire generous tip is going into the tip pool, it’s important to remember the slow shifts, too.

The only exception to a manager being able to take tips that I know of is when that manager directly and solely serves a guest. For example, if a manager takes a table and works it by themselves, they could potentially keep those tips, based on updated federal guidance from late 2021. The labor and employment blog from Quarles and Brady, LLB clarifies: “The new final rule makes clear that while managers and supervisors are prohibited from retaining tips earned by other employees, they are permitted to retain tips that they received directly from customers based on the service that the manager or supervisor directly and solely provided. This is a clarification from earlier DOL regulations, which allowed managers and supervisors to keep tips earned through service that the manager or supervisor directly, but not solely, provided.”

As always, regulations vary by state and are frequently updated, so consult with your state restaurant association, Department of Labor and/or attorney for current guidance. More on managers taking tips here.