“Tip pooling” can be controversial in the service industry – but it’s not uncommon. It’s a system where everybody’s tips are combined and distributed among the entire service team.
The idea behind tip pooling is that everybody who contributes to a customer’s experience should benefit from any gratuities — not just the visible members of the staff. It also makes a server less reliant on the generosity of a specific patron, so if a server gets a “bad tipper” (or non-tipper), they aren’t deprived of fair compensation for their work. While not everybody likes tip pooling, it’s not illegal – as long as it is handled properly.
The total wage must meet the state minimum
Idaho has a “tipped minimum wage” of $3.35 per hour, as long as the tips that the employee receives bring their total minimum hourly earnings up to $7.25 per hour. That’s the current federal minimum wage. When there’s any shortfall, the employer is expected to make up the difference, so that the tipped employee has some financial security.
In addition, employees are the owners of the tips – not employers. Employers, managers and supervisors generally cannot include themselves in the tip pool, even if they are “part of the team” and working the floor. In addition, employers who use mandatory tip pooling must clearly communicate how the system works, including who participates, how the tips are divided and any other important details.
When tip pooling leads to conflicts between an employer and employee, the results can be serious. To avoid reputational damage and other consequences, legal guidance is wise.
