It was a busy Saturday evening at a luxurious resort restaurant. Brief-staffed and overwhelmed, the Assistant Restaurant Supervisor, Alex, rolled up his sleeves and began bussing tables, taking orders, and operating drinks. Friends had been glad, and the group appreciated Alex’s effort—however when ideas had been pooled on the finish of the shift, a server hesitated: “Can Alex actually take a part of the ideas? Isn’t he administration?”
This state of affairs isn’t distinctive. Within the hospitality business, the place staffing shortages are widespread and managers usually leap in to assist, it’s vital to know when supervisors and managers can legally share in tip swimming pools.
The Division of Labor – Wage and Hour Division (WHD) lately issued an opinion letter that addresses this very difficulty, clarifying who’s eligible to take part in tip swimming pools underneath the Honest Labor Requirements Act (FLSA). Right here’s what resort and resort managers must know to remain compliant.
Key Takeaways from the Division of Labor Opinion
The WHD’s Opinion Letter solutions a standard hospitality query: Can somebody with a supervisory title, like an Assistant Supervisor or Shift Lead, legally take part in a tip pool? The reply: It relies on how the worker is classed and what their main duties are.
Totally different Worker Classifications
- Hourly, Non-Exempt Supervisors Can Take part
Supervisors or shift leads who’re paid hourly and carry out primarily non-managerial duties (e.g., taking orders, cleansing tables) can take part in tip swimming pools—even when they’re probably the most senior worker throughout a shift. - Exempt/Salaried Managers Can’t Take part
Managers categorised as exempt—these whose main duties embrace managing workers, scheduling, and decision-making—can not take ideas from a tip pool, regardless of how a lot non-supervisory work they carry out throughout a shift. - Job Titles Don’t Decide Eligibility
Job titles like “Supervisor” or “Lead” don’t matter—what issues is what the worker really does throughout the workweek. Their classification underneath the FLSA relies on their main obligation over time, not the duties they carry out in a single particular shift. - No Supervisor-Solely Tip Swimming pools
Tip swimming pools composed solely of managers and supervisors are prohibited, as they’d violate the FLSA rule that managers can not hold parts of different workers’ ideas.
Sensible Implications for Lodges and Resorts
Now we have all seen it…F&B operations usually contain managers moving into non-supervisory roles throughout high-pressure instances. To make sure compliance, right here’s what Managers and HR teams ought to do:
- Audit Classifications: Evaluate the roles of managers and supervisors to make sure they’re accurately categorised as exempt or non-exempt primarily based on their main duties.
- Make clear Tip Pool Insurance policies: Talk clear tips about who’s eligible to take part in tip swimming pools.
- Practice Supervisors: Educate your management group about these guidelines so that they don’t inadvertently violate FLSA laws.
Alex’s Dilemma: Can the Restaurant Supervisor settle for ideas?
Let’s revisit Alex, the Assistant Restaurant Supervisor. Whereas he spent his Saturday shift performing line-level duties, his main obligation over the workweek includes managing workers and overseeing operations. Underneath the FLSA, Alex is classed as an exempt supervisor, that means he can not legally take ideas from the pool—even when he labored simply as laborious because the servers that evening.
However, if Alex had been an hourly Shift Lead and his function targeted primarily on customer support, he may take part within the tip pool. The excellence hinges on his FLSA classification, not the duties he carried out that night.
Why This Issues; It’s greater than Compliance
For hospitality leaders, that is greater than only a compliance difficulty—it’s about equity and defending your group from potential disputes. Missteps in tip pool insurance policies can result in monetary penalties and harm worker belief.
In regards to the creator
Chuck is an Expert HR Consultant & Coach specializing in transformative HR methods, interim management for hospitality, and complete HR audits and coverage improvement. His HR experience covers the total HR lifecycle together with specializing in HR audits for compliance, growing insurance policies and techniques for various enterprise wants similar to Coverage Manuals and Worker Handbooks tailor-made for all states. He’s adept in dealing with delicate areas like sexual harassment, by way of coaching and investigations. As a SHRM Authorized Recertification Coach, Chuck designs and delivers coaching in HR and Employment Legislation, Supervisory Abilities, and Administration Management, utilizing platforms like Zoom and Groups for each in-person and digital classes. Chuck’s strategy is pragmatic, targeted on sensible options and fostering a tradition of HR compliance and excellence. He’s an energetic member of Cayuga Hospitality Consultants.
