---
title: "What Every Manager Should Know About Tip Pooling Laws"
url: https://burnaze.com/article/694353e1-260e-4338-ba2c-5701867fff86
source: "1851 Franchise"
original_url: https://1851franchise.com/what-every-manager-should-know-about-tip-pooling-laws-2713551
category: "Restaurants"
industry: "Restaurants"
published: 2020-07-22T15:10:01.000Z
modified: 2026-11-01T02:28:29.350Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/680d449d48d1d158a49866a60104b3c1617.jpg
---

# What Every Manager Should Know About Tip Pooling Laws

**TL;DR:** Tip pooling laws stipulate that employees who receive more than $30 in tips per month are eligible for this kind of structure. Managers should understand tip pooling and sharing laws to provide fair compensation to employees.

*originally published in 1851 Franchise on 2020-07-22. [Read the original](https://1851franchise.com/what-every-manager-should-know-about-tip-pooling-laws-2713551).*

## Story

If you’re a manager, knowledge of tip sharing and tip pooling laws is important. Which tipped employees are eligible for these tip structures? What is the eligibility status for back-of-house employees?

Tip pooling is when employee tips are collected into one fund and then distributed evenly among the staff. This method of tip distribution can be beneficial because it ensures that each employee receives the same amount in tips.

Tip pooling laws stipulate that employees who receive more than 30 dollars in tips per month are eligible for this kind of structure. Tipped employees such as waiters, bussers, and other employees working directly with customers can join in this kind of arrangement.

Employees who don’t regularly receive tips are eligible for tip sharing. These employees include dishwashers, cooks, and janitors. Putting a tip sharing system in place can potentially reduce the risk of resentment between those who work directly with customers and those who do not.

Often the amount of money made in tips by the waiters in the front of the restaurant is significant. By allowing the entire staff to benefit from tips, it can help with workplace relationships and foster a sense of egalitarianism.

In the end, entering into a tip pooling or tip sharing arrangement may or may not make sense depending on who you talk to. However, as a manager, you need to know what each structure entails so that you can stay current on your state’s tip pooling laws. Your non-tipped and tipped employees all matter and it’s up to you to provide them with the best opportunities for fair compensation.

## Entities

- 1851 Franchise (publication)
- Restaurants (sector)
- workplace relationships (topic)
- tip pooling laws (topic)
- fair compensation (topic)

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Originally reported by 1851 Franchise (https://1851franchise.com/what-every-manager-should-know-about-tip-pooling-laws-2713551). Summarized by Burnaze (https://burnaze.com/article/694353e1-260e-4338-ba2c-5701867fff86).