Protecting the Tip Credit: Limits on Supervisor Tip Retention Under the FLSA

The Department of Labor (DOL) has issued a new opinion letter addressing tip-pooling rules for supervisors who also perform tipped work under the Fair Labor Standards Act (FLSA).

The issue: Whether the FLSA allows a restaurant supervisor who also bartends to keep any of other employees’ tips or participate in a tip pool.

Opinion Letter Explains Tip-Pool Eligibility

In Opinion Letter FLSA2026-13, the DOL’s Wage and Hour Division (WHD) considered a shift supervisor who periodically worked bartending shifts and assisted hosts and bussers while performing managerial tasks. The employee received a share of “tip outs” from servers, hosts and bussers through the restaurant’s tip-pooling arrangement.

WHD concluded that, if the employee meets the FLSA’s executive duties test, he is a “manager or supervisor” for tip purposes and may not keep any portion of other employees’ tips, even when bartending or assisting other tipped workers. The supervisor may keep only tips received directly from customers for service that he solely provides, such as tips from his own bar customers when he is the sole bartender serving them. If tips are pooled or shared among bartenders so they cannot be attributed solely to him, he may not take any share.

The letter notes that penalties go further than repaying the tips. Employers also risk losing the tip credit for any tipped employees whose tips were improperly kept.

More info: DOL Opinion Letter FLSA2026-13