Catonsville, MD asked in Employment Law for Maryland

Q: Can employees who help supervise take part in tip pooling, when they are the ones working the floor and earning tips?

I’d like to add tipping to a service based diy art studio, but want to make sure it is fair to my whole staff. Staff help customers and potentially earn tips and do backroom work to finish customer creations.

Everyone is paid at or above state minimum wage, and I won’t be taking a tip credit. There is an assistant manager paid hourly who helps run the daily operations of the studio and helps manage staff, and while she may participate in the interview process she cannot hire or fire independently. I had intended to add scheduling to her duties.

There is often only one staff person working during slower times. If she is the only one who works the floor and and earns the tip, I’m concerned she actually won’t get to earn that with because her official title is Assistant Manager and my understanding is that managers or supervisors cannot participate in tip pooling. That doesn’t seem fair to her, but I want to make sure I’m on the up and up.

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1 Lawyer Answer
Joseph D. Allen
Joseph D. Allen
Answered
  • Hunt Valley, MD
  • Licensed in Maryland

A: Unfortunately, there is no clear definition of supervisor or manager in the 2018 amendment to the Fair Labor Standards Act (FLSA). Nor is there guidance on how an employer should handle a situation where a "manager" does not always act in that capacity. There are policies and practices that can reduce the risk to the employer of tip pooling/sharing (and make it equitable and reasonable for the employees), even in borderline cases like the one in the question.

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