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What is Tip Pooling and Is It Legal?

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Individuals who work in the service industry often rely on tips for a portion of their income. Some of the workers who depend on tips include bartenders, servers, individuals who clear tables between customers, and counter staff. While all of these professions across the business may receive tips, how the tips are handled legally can vary from state to state.

In Ohio, it is legal to pool tips. So, for example, a business could have a rule in place in which all servers pool tips and those tips are distributed between those servers who contributed. However, management is not allowed to use the tip pool as a way to access a portion of the tips. A Columbus employment attorney can answer all of your questions regarding service industry wage laws.

Why Use a Tip Pool?

When pooling tips, a portion or all of the tips collected from tipped staff becomes one larger amount. Then, those tips are distributed in a manner that is fair for the entire shift of workers. It can be beneficial in some situations.

For instance, if there is a busy cafe that has one counter person talking to customers and running the cash register, they might be receiving an ample amount in tips. But, if there are two other people working the shift to make all of the lattes, cappuccinos, and hot cocoas, those people are also working hard but not interacting with the customers. Maybe occasionally they receive a small tip, but not the larger ones received at the register. With a tip pool in place, these three employees would place all of the tips, large and small, into one pool and divide them up fairly.

The practice is also common in bars when waitstaff needs to assist with multiple tables, so it makes sense to not make each table designated to one server. It can provide a better customer experience if any of the servers can help out customers as needed.

When There Are Violations

While putting tips in a collective pool can have benefits, there are cons to the practice. There are even times when laws are broken. Because, according to federal law, some service positions can receive tips as part of their incomes, but the following must be adhered to:

  • Employee pay must not fall below minimum wage.
  • Distribution of tips must be consistent and fair.
  • Tipped employees can not be forced to share tips with managers.
  • Employer compensation is not to come from the tip pool.

There are complexities with tip pools. If you feel your Ohio workplace has violated tip pool rules, it is possible you have been a victim of wage theft. Discuss your situation with a Columbus employment attorney to determine if there are legal options available to protect your rights.

Are you a tipped employee in Ohio? If you suspect your employer has violated tip pool laws, talk to an employment lawyer. The attorneys at Coffman Legal can protect your rights. Call 614-949-1181 for a free and confidential consultation.

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