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'Tip Pooling' and Wage and Hour Laws

By Neil V. McKittrick
September 26, 2007

In 2003, a Massachusetts Superior Court ruled that a restaurant may require its wait staff to share tips with other employees in a tip pool without violating the Massachusetts Payment of Wages statute. It was one of only a handful of reported cases in the United States that had dealt with this issue at that time. Since then, there have been numerous cases involving various challenges to employer 'tip-pooling' policies, particularly in Massachusetts and California, with wait staff and other restaurant employees claiming that such policies violate state wage and hour laws. This article describes this recent line of cases, which are of particular interest to employers and employees in the restaurant or hospitality industries, but which have extended to other industries as well. The article also suggests guidelines for employers in the restaurant and hospitality industries to adopt so that their tip pooling policies do not run afoul of state wage and hour laws.

Fraser v. Pears Co., Inc.

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