Can Salaried Employees Accept Tips?

Hourly employees, such as restaurant servers and baristas, often receive tips. Salaried employees, such as managers and chefs, usually don't interact with the customers and may not receive tips. In some cases, salaried employees may be able to accept tips. However, the legality of these tips depend on various factors, such as the work arrangement and tip distribution system.

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Salaried employees may not be able to share in tip pools.

Direct Tips

If a salaried employee receives tips directly from the customers, he can usually keep them. The U.S. Department of Labor states that "tips are the property of the employee" and "all tips received by the tipped employee are to be retained by the employee." If a salaried employee gets more than $30 in tips every month, the employer may be able to reduce his salary as long as it meets the minimum wage requirements.

Tip Pools

Some establishments require that employees who receive tips contribute them to the tip pool. The business then counts the tips and distributes them back to the employees. Generally, tips from the tip pool should only go to employees who usually get tips, including waiters and bartenders. Employees who don't customarily receive tips can't take anything from the tip pool. Such employees usually don't interact with customers and include chefs and janitors.

Grey Areas

Whether a salaried employee can accept tips from a tip pool usually depends on his responsibilities on the job. If he performs similar tasks as tipped, hourly employees, he has to add the tips to the tip pool and can usually take a portion of the tip pool distributions. For example, a restaurant manager may receive a regular salary. If he regularly interacts with the customers, he may be able to accept the tips. However, this depends on the state laws and the extent to which his tasks are similar to those of the hourly employees.

Case Study

In July 2011, five individuals who used to work as assistant store managers for Starbucks sued the company to demand a share of the tip pool. Although they were salaried employees, they claimed that they had similar responsibilities as hourly employees who received tips. A New York City judge dismissed the case because the former assistant managers did not sufficiently prove that they were entitled to the tips and the state law did not allow assistant managers to share in tip pools.