What happened
On September 7, 2026, the U.S. Department of Labor’s Wage and Hour Division issued opinion letter FLSA2026-13. A server asked whether a shift supervisor at the restaurant could take a share of the tip pool on nights when the supervisor also tended bar and helped the hosts and bussers.
The answer was no. The division wrote that section 3(m)(2)(B) of the Fair Labor Standards Act prohibits a supervisor in that workplace from keeping any portion of other employees’ tips, whether or not the supervisor also works as a bartender or helps other staff.
Why it matters
Congress amended the wage law in 2018 to say that an employer, including a manager or supervisor, may not keep employees’ tips for any purpose. That holds whether or not the employer counts tips toward the minimum wage. The common workaround, where a manager picks up a bar shift and then collects a share of the tip out, does not satisfy the rule when that person is still doing the scheduling and running the floor.
There is a narrow exception the letter leaves intact: a manager or supervisor may keep tips that a customer gives directly to them for service they themselves provided, for example their own table or their own bar customer. That is different from taking a cut of the pool the rest of the staff funds.
What it means for workers
If a manager, shift supervisor, owner or anyone with real authority over hiring, scheduling or discipline is taking part of the tip out, that money is likely owed back to the staff. The job title on the schedule matters less than what the person actually does.
What helps a claim: the written tip-out percentages, the schedules that show who was supervising, the point-of-sale reports, and the names of everyone in the pool. An unlawful pool can also cost the employer the tip credit, which means the full minimum wage is owed for those hours, not the cash wage.
State law adds more. New York bars anyone with authority over the staff from sharing in tips and reaches back six years. New Jersey and Pennsylvania have their own rules on deductions and tips. Florida’s constitution sets the state minimum and allows a tip credit of no more than $3.02 an hour.
What it means for employers
Look at who is in the pool, not at the titles. Anyone who schedules, hires, disciplines or directs the staff should be out of it, even on shifts when they work the bar. Keep the tip-out formula in writing, keep the records, and have counsel check the arrangement before a claim arrives.
An opinion letter is the department’s view of the law applied to the facts it was given. It is not a court decision, but employers who follow a letter in good faith get some protection, and workers’ lawyers cite them.
This summary is general information, not legal advice. Usher Law Group was not involved in this matter.
All developments