Wage and Hour Division says shift supervisors who also bartend or help other staff may not share in employees' tips
As of our last check on November 2, 2026, this is agency guidance, not a rule. It explains how the agency reads the law and does not create a legal requirement on its own.
In short
- What changed
- The Wage and Hour Division (WHD) issued an opinion letter saying the Fair Labor Standards Act (FLSA) bars a supervisor whose duties match the executive duties test from taking any share of other employees' tips through a tip pool or "tip out." This holds even when the supervisor also bartends or helps other staff. The supervisor may keep tips customers give directly for service the supervisor alone provided.
- Who's affected
- Employers that run tip pools or tip-out arrangements and have supervisors or managers (by duties, whatever their title) who also do tipped work. Restaurants and bars are the main example, along with coffee shops and salons.
- What to do
- This letter creates no new duties for employers. It explains how WHD reads the existing ban on managers and supervisors keeping employees' tips, so consider checking that no one whose duties match the executive duties test receives pooled or tipped-out tips.
What changed
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From the sourceOpening paragraphs
3(m)(2)(B) of the FLSA prohibits a supervisor in your workplace from keeping any portion of other employees’ tips, regardless of whether the supervisor also works as a bartender or assists
WHD's opinion is that the FLSA's ban on managers and supervisors keeping tips (section 3(m)(2)(B)) stops a supervisor from keeping any portion of other employees' tips, whether or not the supervisor also works as a bartender or assists other employees.
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From the sourceOpinion
This includes receiving other employees’ tips from a “tip out,” such as you describe in your request, or from a tip pool to which the manager is otherwise required to contribute.
The ban covers tips received through a "tip out" and through a tip pool that the manager is otherwise required to contribute to.
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From the sourceGeneral Legal Principles, C. Defining a “Manager or Supervisor”
an employee’s actual duties and responsibilities (not his or her job title) determine
Also: Footnote 2
The salary requirements in 29 C.F.R. § 541.100 and Subpart G do not apply when determining whether
Whether an employee is a "manager or supervisor" for this ban depends on actual duties and responsibilities matching the executive duties test, not on job title. The salary requirements of the executive exemption do not apply to this question.
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From the sourceOpinion
The employee may, however, retain any tips received directly from customers for service the supervisor “directly and solely” provided.
Also: Opinion
that shift, and therefore it is not possible to attribute the tip solely to the supervisor, the supervisor is not permitted to take any portion of those tips.
A supervisor may keep tips received directly from customers for service the supervisor directly and solely provided, such as tips from the supervisor's own bar customers. If those tips are combined and split among all bartenders on the shift, the supervisor may not take any portion.
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From the sourceGeneral Legal Principles, D. When Managers or Supervisors Perform Tipped Work
does not prohibit an employer from requiring a manager or supervisor who receives tips directly from customers to contribute some portion of those tips to eligible employees
The letter says the law does not stop an employer from requiring a manager or supervisor who receives tips directly from customers to contribute part of those tips to eligible employees in a tip pool.
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From the sourceOpinion
WHD assumes for the purposes of this letter, based on the employee’s shifts working as a supervisor and a bartender, that the employee satisfies the “executive” duties requirements of
WHD did not have enough facts to decide whether the requester's shift supervisor meets the executive duties test, so it assumed that the employee does.
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From the sourceOpinion
These penalties not only include recovery of the tips the supervisor “kept,” but the concurrent disallowance of the tip credit (if applicable) for any affected tipped employees whose tips the supervisor improperly kept.
The letter says violations of this ban carry penalties that include recovery of the tips the supervisor kept and loss of the tip credit, where it applies, for the affected tipped employees.
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From the sourceClosing paragraph
This interpretation may be relied upon in accordance with section 10 of the Portal-to-Portal Act
The letter is an official WHD interpretation that the letter says may be relied on under section 10 of the Portal-to-Portal Act.
Who is affected
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From the sourceBackground
The restaurant where you are employed as a server has a tip pooling arrangement.
The question came from a server at a restaurant with a tip pooling arrangement.
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From the sourceGeneral Legal Principles, B. “Keeping” of Tips
amended it to prohibit an “employer,” regardless of whether it claims a tip credit, from keeping employees’ tips “for any purposes,” including allowing a “manager” or “supervisor” employed by the employer from keeping tips received by other employees.
The ban on keeping employees' tips applies to an employer whether or not it claims a tip credit.
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Our analysisOpinion, Example #2
An employee works at a coffee shop with a tip jar and point-of-sale system
Also: General Legal Principles, B. “Keeping” of Tips
For example, a salon manager may keep tips left by customers whose hair she personally styles.
Also: Footnote 1
Regardless of the terms used, when determining whether an employer’s tip practices comply with the FLSA, the analysis is the same.
Beyond restaurants and bars, the letter's examples show the same reasoning reaching coffee shops and salons, and any workplace where tips are shared among employees, whatever the employer calls the practice.
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Our analysisOpinion, Example #2
Although the employee does not have a formal title of a manager or supervisor,
Employees without a manager title can still be covered. The coffee shop example treats a worker called a barista as a supervisor because his duties meet the executive duties test.
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From the sourceNote
This opinion is based exclusively on the facts and circumstances described in your request
Also: Footnote 4
We do not address that situation in this opinion letter.
The letter answers only the requester's facts, and it does not address an employee who mainly bartends or serves but works occasional management shifts.
What it means in practice
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Our analysisGeneral Legal Principles, C. Defining a “Manager or Supervisor”
an employee’s actual duties and responsibilities (not his or her job title) determine
Also: Opinion
This includes receiving other employees’ tips from a “tip out,” such as you describe in your request, or from a tip pool to which the manager is otherwise required to contribute.
Tip pool and tip-out distributions may need to leave out anyone whose duties match the executive duties test, even on shifts when that person does tipped work, because a title such as "shift supervisor" or "barista" does not decide the question.
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Our analysisOpinion
that shift, and therefore it is not possible to attribute the tip solely to the supervisor, the supervisor is not permitted to take any portion of those tips.
A supervisor can keep tips only when they can be tied to service that person alone provided, so tip tracking that combines a supervisor's tips with other bartenders' tips would not let the supervisor take a share.
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Our analysisOpinion
These penalties not only include recovery of the tips the supervisor “kept,” but the concurrent disallowance of the tip credit (if applicable) for any affected tipped employees whose tips the supervisor improperly kept.
A mistake can cost more than the tips themselves: an employer that claims a tip credit could lose it for the affected tipped employees.
What to do
AmendSignal analysis sorts these by whether this document changes them.
Already required
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From the sourceGeneral Legal Principles, B. “Keeping” of Tips
amended it to prohibit an “employer,” regardless of whether it claims a tip credit, from keeping employees’ tips “for any purposes,” including allowing a “manager” or “supervisor” employed by the employer from keeping tips received by other employees.
Also: General Legal Principles, B. “Keeping” of Tips
further clarify that an employer may not receive tips from a tip pool and may not allow supervisors or managers to receive tips from the tip pool.
Under the FLSA, as the letter describes it, an employer may not keep employees' tips for any purpose, and may not allow a manager or supervisor to keep tips received by other employees. This applies whether or not the employer claims a tip credit.
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From the sourceGeneral Legal Principles, A. Tip Provisions of the Act
To claim the tip credit, an employer must inform the tipped employee of requirements of section 3(m)(2) of the Act and ensure that all tips received by that employee are retained by him or her, other than in a lawful tip pool.
Under the FLSA, as the letter describes it, an employer that claims the tip credit must inform tipped employees of the tip provisions of section 3(m)(2) and make sure each employee keeps all tips received, other than in a lawful tip pool.
Worth considering
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Our suggestionGeneral Legal Principles, C. Defining a “Manager or Supervisor”
an employee’s actual duties and responsibilities (not his or her job title) determine
Consider reviewing who receives money from your tip pool or tip-out arrangement, and identify anyone whose actual duties match the executive duties test, whatever their title.
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Our suggestionGeneral Legal Principles, C. Defining a “Manager or Supervisor”
the authority to hire or fire other employees, or his or her suggestions and recommendations as to
Consider reviewing the duties of shift supervisors, leads and similar roles, including whether they direct other employees' work and have hiring or firing authority or input, since these are parts of the executive duties test.
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Our suggestionOpinion
that shift, and therefore it is not possible to attribute the tip solely to the supervisor, the supervisor is not permitted to take any portion of those tips.
Consider checking whether your point-of-sale and payroll systems can keep tips a supervisor earns directly from their own customers separate from pooled or shared tips.
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Our suggestionFootnote 4
We do not address that situation in this opinion letter.
If you have employees who mainly bartend or serve but sometimes work management shifts, consider getting advice on how the ban applies, since the letter does not address that situation.
Open questions
The source leaves these open. We'll update this record if a later document answers them.
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Does the same ban apply to an employee who mainly bartends or serves but works occasional shifts as a manager?
Related changes
History
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FLSA2026-13: Whether the FLSA allows a restaurant supervisor who also works as a bartender to keep a portion of other employees' tips and the extent to which he may participate in a tip pool. Source (opens in a new tab)