September 28, 2026
Samantha Poole, NHLRA
The Department of Labor’s Wage and Hour Division issued a new opinion letter verifying that a restaurant supervisor is not entitled to a portion of other employees’ tips when also working as a bartender or assisting other tipped employees.
The opinion letter provides additional clarity on how existing tip requirements apply when managers and supervisors perform tipped work. DOL reinforced that an employee who qualifies as a manager or supervisor cannot receive other employees’ tips, including through a tip pool or tip-out, even while working a bartending shift. The employee may, however, keep tips from customers for services they provide directly and solely.
Managers & supervisors may not keep employees’ tips.
The Fair Labor Standards Act (FLSA) prohibits a manager or supervisor to keep any portion of other employees’ tips for any purpose. This includes not allowing a manager or supervisor to receive tips from a tip pool or tip jar, because tip pools and tip jars include other employees’ tips.
It does not matter how your employees are being paid.
This prohibition applies whether or not the employer pays tipped employees with a tip credit. This means that even if you are paying your tipped employees $20/hour, you still cannot allow for a manager to participate in a tip pool with tipped employees.
Who is a considered a manager or supervisor under the FLSA’s tip provisions?
A manager or supervisor includes any employee who meets the “executive duties" test. This means that the employee is considered a supervisor or manager under FLSA when they:
Customarily and regularly directs the work of at least two or more other full-time employees or their equivalent.
Has the authority to hire or fire other employees, and/or their suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.
Has a primary duty of managing the enterprise or a customarily recognized department or subdivision of the enterprise.
To review full list of criteria under the executive duties test, click here.
What does "primary duty of managing" mean? What if my managers also do other non-managerial tasks?
An employee’s primary duty is the main or most important duty that the employee performs. An employee’s primary duty is based on the entire workweek, not a day-by-day scrutiny of the tasks the employee performs. An employee whose primary duty is managing may also perform non-management duties, including tip-producing work, and still meet the primary duties test.
Some managerial tasks include:
Interviewing, selecting, and training employees
Setting and adjusting employee’s rates of pay
Setting and adjusting employee’s hours of work
Directing the work of employees
Handling employee complaints and grievances
Disciplining employees
Controlling the flow and distribution of materials or merchandise and supplies
Planning and controlling the budget
What happens when a manager or supervisor performs tipped work?
Managers and supervisors who are performing tipped work may retain tips that they have received directly and solely, but cannot be part of a tip pool or a tip sharing arrangement similar to a tip jar.
Have a compliance question?
Ask the NHLRA! We are here to help you get answers to pressing questions and understand complex issues pertaining to the hospitality industry.
Legal Disclaimer: This document is not intended to replace legal advice but to assist with an organization's ongoing training. Please review your legal obligations with your legal team and review the appropriate government agency for more resources and additional information. This document was prepared based on digital information available at that time.