I wait tables and we pool our tips at the end of the night. My manager takes a share out of the pool before it gets split. Is that legal?
Published October 19, 2026
The short answer
Under federal law an employer may not keep any part of its employees’ tips, and that bar runs to managers and supervisors as well — whether or not the business counts tips toward the minimum wage. The catch is that “manager or supervisor” is a defined term, settled by a three-part test about what a person actually does rather than by what the schedule calls them. Someone who meets that test and also waits tables may keep only the tips customers hand over for service they provide directly and solely, not a share of everyone else’s pool.
The rule is in the federal statute, and the Department of Labor’s fact sheet on tipped employees fills in who counts as a manager or supervisor. What follows quotes both whole.
What does federal law say about an employer keeping tips?
The rule sits in the Act’s own text. 29 U.S.C. 203(m)(2)(B), read on the United States Code 2023 Edition at govinfo on October 19, 2026:
“(B) An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees' tips, regardless of whether or not the employer takes a tip credit.”
What do the key phrases in that sentence mean?
Two phrases carry the weight. “For any purposes” leaves no purpose that makes it acceptable. And “regardless of whether or not the employer takes a tip credit” means the bar does not switch off because a business pays the full wage in cash instead of counting tips toward it.
Does the bar still apply when the employer takes no tip credit?
The Department of Labor’s Fact Sheet #15 has a section on this, headed Employers, Including Managers and Supervisors, May Not “Keep” Tips. Here it is whole, all three paragraphs, because the middle one is the part that decides most real cases.
Fact Sheet #15 prints no revision date, so the figure in its first paragraph is as the page stood when it was read on October 19, 2026. That first paragraph reads:
“Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees’ tips for any purpose, whether directly or through a tip pool. An employer may not require an employee to give their tips to the employer, a supervisor, or a manager, even where a tipped employee receives at least the federal minimum wage (currently $7.25) per hour in wages directly from the employer and the employer takes no tip credit.”
Who counts as a manager or supervisor?
The second paragraph of that section is the definition:
“Managers and supervisors include any employee (1) whose primary duty is managing the enterprise or a customarily recognized department or subdivision of the enterprise; (2) who customarily and regularly directs the work of at least two or more other full-time employees or their equivalent; and (3) who has the authority to hire or fire other employees, or whose suggestions and recommendations as to the hiring or firing are given particular weight. Business owners who own at least a bona fide 20 percent equity interest in the enterprise in which they are employed and who are actively engaged in its management are also managers and supervisors who may not keep employees’ tips.”
Does a job title settle whether someone is a manager?
The middle paragraph is why a job title settles nothing in either direction. The statute’s bar reaches “managers or supervisors”, and the Department fills in that term with a test about duties — primary duty, directing the work of at least two other full-time employees or their equivalent, and authority or real influence over hiring and firing. Plenty of people whose shirt says manager would not meet all three; some people with a different title would. Which way a particular job falls is a question of facts, not of what is printed on the roster.
Can a manager who works a section keep their own tips?
The third paragraph answers the obvious comeback. A manager who works a section of their own is not barred from the tips their own customers hand them for their own service — the words doing the work there are “only”, “directly” and “solely”. A share of what everybody else earned is a different thing. The paragraph reads:
“A manager or supervisor may keep only those tips that they receive directly from a customer for the service they directly and solely provide. For example, a restaurant manager who serves their own tables may keep their own tips from customers they served but would not be able to receive other employees’ tips by participating in a tip pool.”
Which other employees may be in a tip pool?
Which other employees may be in a pool does depend on how a business pays its tipped staff, and Fact Sheet #15 sets that out in two places, one for each arrangement. The manager and supervisor bar appears under both. For the parts that turn on a workplace’s own facts, the Wage and Hour Division is where to put the question: 1-866-487-9243. States can set their own tip rules on top of the federal ones, so a state labor office is the other call worth making.
Is the federal definition of a manager or supervisor being rewritten?
The Department’s regulatory agenda, published in the Federal Register on August 14, 2026 (https://www.govinfo.gov/content/pkg/FR-2026-08-14/pdf/2026-16599.pdf), lists “Tip Regulations Under the Fair Labor Standards Act (FLSA)”, RIN 1235-AA54, at the proposed rule stage, with a projected notice date of August 2026. The entry does not say what would change.
A regulation cannot change the statute quoted above, but the three-part definition of managers and supervisors is not in that statute — it comes from the Department. It is noted here because an undated fact sheet on a subject with a rulemaking open on it is worth re-reading sooner, which is why this answer is set to be re-read in three months rather than twelve.
What is worth writing down?
Three things. First, each shift: the date, the hours worked, and the tips that came in — card tips off the slips, cash counted at the end of the night.
Second, what came back out of the pool for that shift, and the figure the pool was split on if it is ever announced.
Third, the roles paid out of the pool — job titles, not names — written down the same night rather than remembered later. Alongside each, what that person actually does in a shift: who they direct, and whether they hire or fire.
What can this page not tell a reader?
Five things. It cannot say whether a particular job meets the three-part test quoted above. That gets applied to real duties by the Wage and Hour Division, and the Department has a fact sheet on that question alone — Fact Sheet #15B, Managers and Supervisors Under the Fair Labor Standards Act (FLSA) and Tips, at https://www.dol.gov/agencies/whd/fact-sheets/15b-managers-supervisors-tips-flsa.
It cannot say whether the federal rules reach a particular workplace or job in the first place. The Wage and Hour Division can say which rules apply.
It cannot say who else may be in a pool. That turns on a workplace’s own pay arrangement, which this page does not have.
It cannot say what a state’s own tip rules say. The Department keeps a list of state labor offices at https://www.dol.gov/agencies/whd/state/contacts.
And it does not answer mandatory service charges, or card-processing fees on tips left on a card. Fact Sheet #15 handles both away from the section quoted above.
Where this is decided
U.S. Department of Labor, Wage and Hour Division
Ask the Wage and Hour Division whether the hours or the deduction described are covered where the work was done. Contacting them does not require an attorney, and the division investigates complaints itself.
Contact detailsSources read for this answer
- 29 U.S.C. § 203(m)(2)(B) — Definitions (United States Code, 2023 Edition)
U.S. Government Publishing Office · United States Code, 2023 Edition · read October 19, 2026
https://www.govinfo.gov/content/pkg/USCODE-2023-title29/html/USCODE-2023-title29-chap8-sec203.htm
- Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA)
U.S. Department of Labor, Wage and Hour Division · read October 19, 2026
https://www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
About this answer
What is written above is general information about a rule that exists. It is not written about anybody's particular job.
It does not say what any particular employer owes anyone. That turns on facts this page has never seen — the hours, the agreement, the state the work was done in — and on how somebody with the authority to decide reads them.
Rules differ from one state to the next, and they change. Every quotation above says what that document said on the date printed beside it, which is not the same as saying what it says today.
Where anything on this page and the official source disagree, the official source is the one that counts. The office named further up decides; this page only points at it.
Whichever way that goes, the thing an agency, a union or an attorney asks for first is a dated record of what actually happened, written down while it was happening.
Keep your own record of it
The arithmetic worth doing is on your own shifts: tips in, pool share back out, hours worked, shift by shift. A record keeps those figures in one place in date order instead of in your head.
Start your own recordFree to start, and no account until you choose to keep it. Private to you — nobody is contacted or notified.