DOL Confirms Supervisors and Managers Who Also Work Tipped Shifts Cannot Participate in a Tip Pool

The U.S. Department of Labor’s Wage and Hour Division (WHD) issued Opinion Letter FLSA2026-13 addressing a common question in the restaurant industry: Can a supervisor who also performs tipped duties like bartending receive a portion of other employees’ tips through a tip pool¹ or tip-out arrangement? The WHD concluded that a restaurant “shift supervisor” who meets the applicable duties test for a manager or supervisor may not participate in a tip pool. This is the case even when the manager or supervisor also works bartending shifts or assists hosts and bussers.  

The opinion arose from a restaurant's tip-sharing arrangement, which required servers to tip out bartenders, hosts, and bussers. A “shift supervisor” regularly worked bartending shifts and performed managerial functions like scheduling employees, directing work, and determining when shifts ended. During those shifts in which the supervisor bartended, they received a share of tip-outs from servers and occasionally a share of amounts intended for hosts and bussers. The WHD concluded that if the shift supervisor satisfied the DOL's definition of a manager or supervisor, their participation in the tip pool violated FLSA section 3(m)(2)(B).²

The WHD’s opinion is significant because it emphasizes that managerial status depends on job duties, not job titles. An employee is a “manager or supervisor” for tip-pooling purposes when the employee's duties match the executive duties test found in the FLSA's white-collar exemption regulations. Relevant factors include whether the employee's primary duty is management, whether the employee regularly directs the work of at least two employees, and whether the employee has meaningful input into hiring, firing, promotion, and other employment decisions. Notably, the salary basis and salary threshold requirements applicable to the executive exemption do not apply when determining managerial status for purposes of the FLSA's tip pool provisions.

The WHD explained that a manager does not lose managerial status merely because the manager also performs the same work as frontline employees. A supervisor who tends bar, serves customers, hosts, buses tables, or otherwise assists staff remains prohibited from keeping any portion of tips that belong to other employees. 

While managers and supervisors cannot participate in a tip pool, they may keep tips that customers give to them for services they “directly and solely” provide. For example, a manager covering a table during a shift may keep tips left by those customers. Likewise, a supervisor working behind the bar may retain tips left directly for the supervisor's own bartending services. But if tips are pooled or combined with those earned by other employees such that they cannot be attributed solely to the supervisor's own service, the supervisor may not participate in the distribution.

Employers with tipped workforces should review tip-pooling policies and actual workplace practices, not just written job descriptions, to ensure compliance. For hospitality employers, the opinion serves as another reminder that hybrid supervisor positions present heightened compliance risks. Employees who both manage staff and perform frontline service work often fall into a gray area operationally, but under the DOL's interpretation, managers generally remain managers for tip-pooling purposes, regardless of how frequently they step behind the bar or assist service staff.  

The WHD also noted the significant consequences that are associated with violations of section 3(m)(2)(B). These consequences not only include recovery of the tips the supervisor “kept,” but also the disallowance of the tip credit (if the employer takes the credit) for any affected tipped employees whose tips the supervisor improperly kept.

Employers should also consider applicable state law requirements and review any state-specific tip pooling restrictions or notice obligations when assessing their current practices.