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Ask the Hotline | Tip Pools

July 12, 2017
Q. We have a deli/counter section of our business where we make sandwiches, salads and other food. The deli has several people working at the counter including the cashier, people making the sandwiches/salads and a lead (working manager).  The employees are paid well above minimum wage so they don’t rely on tips to reach minimum wage.  There is no table service as all the food is distributed at the counter but we have a tip jar at the register and customers leave tips for the team.  We want to divide the tips among everyone but are not sure what to do about the working manager. May we include the manager? 
A. Interesting question that is easily answered under Massachusetts state law (M.G.L.149, S 152A) and the tips advisory from the state attorney general’s office. (, search for tips advisory).
There are three classes of employees who may share tips or receive the proceeds of a service charge: wait staff, service employees and service bartenders. Managers are not on the list.
Wait Staff Employee
To qualify as a wait staff employee, a worker must meet all of the following criteria: 
  • The person must work in a restaurant, banquet facility, or other place where prepared food or beverages are served.
  • The person must provide service to customers by serving beverages or prepared food directly, or by clearing customers' tables; and 
  • The worker may not have any managerial responsibility. 
Service Employee
The law also covers the tips of service employees who do not work in the food or beverage industry. Service employees are people:
  • who work in occupations in which they customarily receive tips in the course of their work; 
  • who do not work in food and beverage service; 
  • who provide service to customers directly; and 
  • who have no managerial responsibility.
Examples of service employees are hairdressers, taxicab drivers, baggage handlers and bellhops.
In the case of a question the AG’s office will determine whether or not someone is a manager based on the person’s responsibilities and duties in the workplace. 
Service Bartender
The law permits service bartenders to be included in a tip pool or to receive gratuities from a
service charge, although they may not provide direct service to customers. To qualify as a service bartender, the worker must:
  • prepare "alcoholic or nonalcoholic beverages for patrons to be served by another employee." 
Tip sharing is permitted, provided that the distribution of the tips is limited to wait staff employees, service employees and service bartenders. Though employers are prohibited from retaining employees' tips, the employer may distribute tips that have been properly pooled. 
The law also makes it clear that the tips should be paid that business day or on the regularly scheduled payday.  
Finally, employers may not keep tips or demand, request or accept any portion of a tip given by a patron to a wait staff employee, service employee, or service bartender. Employers are also explicitly forbidden from distributing tips to anyone who is not a wait staff or service employee or service bartender. This includes employers, employees with managerial responsibility, and employees not serving patrons directly.
Please contact the AIM Employer Hotline at 800-470-6277 if you have any questions about this or any other HR related matter.
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