Tip Pooling Rules: Who Can Share in the Tip Pool?
Tip pooling lets employers distribute tips among employees. Under the FLSA, back-of-house staff can join a valid tip pool — but only under certain conditions.
A tip pool is an arrangement in which employees contribute a portion of their tips to a shared pot that is redistributed among a group of workers. The FLSA's tip pooling rules changed in 2018 and again in 2021; the current rules depend on whether the employer takes a tip credit.
When the employer takes a tip credit
If the employer pays tipped employees a cash wage below the full minimum (the federal tip credit allows a $2.13 cash wage), only employees who 'customarily and regularly receive tips' may participate in the pool — typically servers, bartenders, bussers, and food runners. Back-of-house employees (cooks, dishwashers) cannot participate in a tip credit pool.
When the employer pays the full minimum wage
If the employer does not take a tip credit and pays at least the full minimum wage in cash, the 2021 rule allows back-of-house workers to participate in the tip pool. The employer may also keep tips in this scenario only if no tip credit is used. Supervisors and managers cannot participate in any tip pool regardless of the structure.
State rules vary
Seven states ban the tip credit entirely (California, Oregon, Washington, Nevada, Montana, Minnesota, Alaska), which means all tipped workers receive the full state minimum wage in cash plus tips. In those states, back-of-house staff can participate in a tip pool under the 2021 rule. Several states have even stricter tip-pooling rules; always check your state law.