What are the rules for tip-pooling?

Tip pooling is a way for businesses to pool tips earned by employees. In California, this practice is legal, so long as employees aren’t required to participate in the tip pool, and the pool is only shared among employees who regularly receive tips. According to the California Labor Code, these employees must be “directly involved in providing customer service,” like waitstaff, service bartenders, bussers, and food runners. Managers and supervisors are forbidden from participating in the tip pool. When it comes to distributing the pooled tips, each employee must receive a proportionate share of the money that’s appropriate for the amount of work they do. For example, a server will typically get a larger share of the pooled tips than a busser. In some cases, employers may choose to divide the tips according to hours worked, or some other type of equitable formula. It’s important to note that employers can’t take a cut of the pooled tips or impose any type of punishment for not participating in the tip pool. Tip pooling can be a great way for businesses to increase revenue and morale among staff members. However, it’s important to remember that the rules for tip pooling in California must be followed in order to avoid any legal issues. Employers must make sure that only eligible employees participate in the pool, and that they are all receiving a fair and equitable share of the money. Failure to comply with these rules can result in hefty fines or other penalties.

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What are the rules for tip-pooling?

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